FDI Update reports on recent legislation, international arbitration cases and enforcement decisions. It also brings news and insights from Turkey, the Middle East, Africa and CIS to guide investors that target foreing markets for expansion.
New Feed-in Tariff Rates for Renewable Energy Generation Facilities Have Been Announced
As discussed in our note of January 2021, feed-in tariff (FiT) guarantees under the YEKDEM scheme were amongst the issues subject to amendments in the Renewable Energy Law No. 5346.
As per the amendments, the President of the Turkish Republic was expected to determine the applicable tariffs and terms for the generation facilities that will commence operations after 31 June 2021.
To that end, President’s Decision on the applicable tariffs and terms as well as the escalation methods of the said tariffs for the generation facilities based on renewable energy with YEK certificate was published in the Official Gazette No. 31380 on 30 January 2021.
With the mentioned Decision, the FiT rates that will be applied for a period of 10 years to the generation facilities holding YEK certificates commissioned between 1 July 2021 and 31 December 2025 were determined.
YEKDEM tariffs determined in Turkish Liras depending on the types of facility are listed below:
Solar: 32 kr/kWh
Wind: 32 kr/kWh
Hydropower: 40 kr/kWh
Geothermal: 54 kr/kWh
Landfill gas/waste: 32 kr/kWh
Biomethanization: 54 kr/kWh
Thermal Disposal: 50 kr/kWh
On the other hand, the contribution fee applicable to the generation facilities using domestic components is determined as 8 kr/kWh. The term for the domestic production incentive is determined as 5 years.
The President’s Decision further sets forth an escalation method to be applied on the above-mentioned rates. Pursuant to this method, the prices will be reviewed every three months, the first of which will be on 1 April 2021.
Furthermore, the Decision sets forth upper limits in US Dollars for the FiT rates based on each type of facility. The upper limits are provided below:
Solar: 5.1 cent/kWh
Wind: 5.1 cent/kWh
Hydropower: 6.4 cent/kWh
Geothermal: 8.6 cent/kWh
Landfill gas/water: 5.1 cent/kWh
Biomethanization: 8.6 cent/kWh
Thermal Disposal: 8.0 cent/kWh