INTECOBUILD RENEWABLE ENERGY IN TURKEY Erdal Kabatepe Chairman, MERKAT second Workshop First Interna

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INTECOBUILDRENEWABLE ENERGY IN TURKEYErdal
KabatepeChairman, MERKATsecond Workshop(First
International Workshop)12 June 2008, Nantes,
France
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• DATA ON RENEWABLE ENERGY IN TURKEY

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A. INTRODUCTION

• Turkey, being a Mediterranean country, is known
  for her plenty of sunshine. The availability of
  solar energy is more than 2 500 sunshine hours
  per year and in some regions this figure reaches
  to 3000 hours per annum. A similar situation
  exists for wind and hydraulic energies as well.
  Turkey has more than 1 of the world potential in
  both of these renewable resources.

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• A brief look at the Turkish energy picture
  clearly brings the importance of the renewable
  resources for this country. The total demand for
  energy was approximately 99.6 million tons of
  petroleum equivalents and the domestic supply was
  only 26.8 million tons in 2006. The same year
  about 73 of the energy demand is met by
  imported oil, natural gas and some clean coal.
  According to near and midterm forecasts this
  trend will continue. The demand for electricity
  is increasing at a much higher rate than the
  demand for thermal energy. The average increase
  rate for the last 20 years is almost 10 . Being
  accepted as a quality and a clean energy
  resource, planning for electricity production is
  considered to be vital for the development of
  this country. Renewable energy resources
  including solar energy is expected to play an
  important role in the electricity production as
  well.

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• According to the experts, the priority list among
  the renewable sources is as follows
• Wind energy utilization
• Small hydraulic plants of less than 50 MW with or
  without (preferably) reservoirs
• Solar thermal
• Direct electricity production using solar cells
• Geothermal.

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• Turkey has ample sources of renewable energy and
  solar energy is one of the leading candidates to
  play an important role in the future. A sizeable
  flat plate collector based industry has been
  developed in Turkey over the last 25 years.
  Although the exact number of manufacturers is not
  known, it is estimated that there are over 150
  companies of various sizes operating within the
  sector and the number of persons employed in
  these establishments exceeds 2500.
• Turkey should place very high priority for the
  encouragement of renewable energy technologies
  for the following essential reasons
• Renewable energy is available everywhere.
• Turkish industry is expected to expand in the
  food, agricultural goods and textiles sectors all
  of which involve processes with low end-use
  temperatures.
• Turkish tourism sector is expected to expand at
  much higher rates than the average of the
  Mediterranean tourism and there is a wide variety
  of renewable assisted applications in this
  sector.

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• With its distributed character, the
  implementation of renewable
• technologies countrywide will create more jobs
  than any other
• conventional energy investments.
• Turkey builds more than 300.000 new dwellings
  every year, which is an
• additional boost for renewable energy
  applications.
• This document covers the following renewable
  resources
• Solar Energy,
• Biomass Energy,
• Hydraulic Energy,
• Geothermal Energy.
• In addition data on the wind energy is also
  provided for future reference.

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• B. SOLAR ENERGY POTENTIAL
• Turkey is one of the Mediterranean countries
  with the highest solar energy potential levels in
  Europe as shown in Figure 1. The State
  Meteorological Institute of Turkey (DMI) is the
  organization responsible for measurement,
  collection and evaluation of all pertinent data.
  The Institute has a network of over 300 ground
  stations scattered all over Turkey with eleven
  major regional and over eighty provincial
  stations capable of measuring a wide range of
  meteorological data. However, the long time
  averages on solar radiation data and solar maps
  are produced by another government agency, namely
  The General Directorate of Electrical Power
  Resources Survey and Development Administration
  (EIEI).

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Figure 1- Availability of Solar Radiation for
The Eastern Mediterranean and Turkey (Source EC
JRC Institute for Environment and Sustainability,
2003)
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• Since the concentration is low and the presence
  of diurnal variation is quite important for
  design and thermal sizing considerations, the
  accuracy and reliability of the solar data is
  quite important. Among all the weather parameters
  measured by the State Meteorological Institute,
  solar radiation measurements are found to be most
  unreliable because the infrastructure of the
  Institute on such measurements is not sufficient
  and not all the ground stations are equipped with
  proper instrumentation. Figure 2 and 3 show the
  long term averages of the yearly distribution of
  maximum, minimum and average daily temperatures
  and sunshine hours data for Turkey. This data is
  more reliable and it clearly indicates the solar
  potential.

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• Figure 2- Long term Averages of
• Maximum, Average and Minimum Temperatures for
  Turkey
• (Source DMI, 2003 Statistical Data)

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Figure 3- Long Term Average Sunshine Hours for
Turkey (Source DMI, 2003 Statistical Data)
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• Total solar radiation data and sunshine hours are
  given in Tables 1 and 2. The immediate reaction
  to data is that the solar radiation figures are
  low and they do not match the high sunshine
  figures and the satellite related data given in
  Fig. 1.
• Unreliability of the solar data has prompted
  several researchers to look into the matter and
  find other means to evaluate and/or measure the
  solar data. In 1982, NATO backed Utilization of
  Solar Energy in Turkey program tackled the
  problem in a special sub-project entitled
  Assessment and Measurement of Solar Radiation in
  Turkey and reference stations were installed at
  several strategic locations in Turkey to measure,
  record and store reliable solar data. Although
  the efforts can by no means described as
  adequate, it has revealed the fact that while
  long term temperature and sunshine hours data
  available from DMI are acceptably accurate, long
  term solar radiation data is much lower than
  actual readings.

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Table 1- Total Monthly Solar Radiation and
Sunshine Hours (EIEI, 2006)
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• This fact has been later verified by satellite
  measurements as given by Fig. 1. An estimate of
  total solar radiation data is given by Fig. 4.
  The solar radiation data presented closely
  matches with reliable data of similar locations
  within the Mediterranean Region.

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Table 2- Regional Distribution of Yearly Total
Solar Radiation and Sunshine Hours (EIEI, 2006)
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Figure 4- Long Term Average of Daily Solar
Radiation for Turkey (Ozil, E, 2003)
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• C. BIOMASS ENERGY POTENTIAL
• Turkey also possesses a variety of biomass
  resources such as forests, agriculture and
  animals. Although traditionally animal dung has
  been used for heating and cooking purposes for
  many years, it is slowly being converted to
  modern uses of biomass energy. In 2006 wood and
  other types of traditional biomass accounted for
  less than 10 of the total consumption. Some
  data is shown on the biomass potential in tables
  3 to 6. It should be noted that forest related
  biomass is concentrated in Black Sea and
  Mediterranean Regions whereas most of the animal
  population is found in The Central and Eastern
  Anatolia Regions and the west of the Marmara
  Region. Agricultural products are found in all
  regions.

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Table3- Total and Recoverable Potential for
Animal Waste in Turkey
tons of petroleum equivalent 1000 tons of
petroleum equivalent
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Table 4- Total and Recoverable Bio-energy
Potential in Turkey
1000 tons of petroleum equivalent.
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Table 5- Overall Bio-energy Potential in Turkey
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D. HYDRAULIC ENERGY POTENTIAL

• Turkey has about 1 of the total world technical
  hydroelectric potential.
• There are many rivers in Turkey and five separate
  watersheds.
• The Persian Gulf watershed in eastern Turkey
  includes the Tigris River (Dicle River) and the
  Euphrates River (Firat River) which flow
  southwest into Iraq and eventually merge and
  reaches the Bay of Basra at the northern end of
  the Persian Gulf.
• The Aras/Caspian watershed in eastern Turkey
  includes the Aras River which flows eastward and
  reaches the Caspian Sea.

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• The Black Sea watershed covers much of northern
  Turkey and includes Turkey's longest river,
  Kizilirmak.
• The Mediterranean watershed covers much of
  southwestern Turkey where rivers either flow
  south to the Mediterranean Sea or west to the
  Aegean Sea.
• The fifth watershed covers the region around the
  Marmara Sea which includes several smaller
  rivers.
• Thus, major hydraulic potential is located at the
  Eastern Anatolia, Blacksea and Mediterranean
  regions. The priority is given to Small hydraulic
  plants of less than 50 MW with or preferably
  without reservoirs (river type plants).

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Table 6 Hydraulic Energy Potential of Turkey
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E. GEOTHERMAL ENERGY

• Turkey possesses rich geothermal resources. There
  are nearly 1000 hot springs and mineral waters.
  Studies show that almost all the fields are
  suitable for thermal use such as space or
  greenhouse heating. There are at least 10 fields
  with a potential for electricity generation.
• Estimated geothermal power production is 2000 MW
  and thermal energy production potential is around
  31500 MWt. At present only 1000 MWt is being
  utilized.

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F. WIND ENERGY

• Turkey has a very high wind energy potential
  (Table 7) especially on the Aegean Coast, in
  Marmara and the Eastern Mediterranean regions.
  (The wind atlas of Turkey is given in the
  Appendix). However, it should be noted that, this
  atlas was derived from wind measurements at 10 m
  height. The new version with measurements at 50 m
  is given in the next Appendix. It is important to
  note that there are at least 500 locations in
  Turkey which has reliable wind measurements made
  mainly by the private sector. On the atlas, red
  colored areas represent the regions with the
  highest energy potential. The yellow regions fall
  in the areas of wind potential.
• The lower estimates in Table 7 are given by the
  government agencies. However, it is most likely
  the higher range is more reliable.

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Table 7. Wind Potential of Turkey
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APPENDIXWind Atlas of Turkey (EIEI, 2006)
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WIND ENERGY POTENTIAL ATLAS OF TURKEYAnnual
Average at 50 m Height
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TURKISH NATIONAL STRATEGIES, LEGAL AND
ADMINISTRATIVE FRAMEWORK ON RENEWABLES
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ADMINISTRATION OF ENERGY MARKET AND ENERGY POLICY
ISSUES

• With a young and growing population, low per
  capita electricity consumption, rapid
  urbanization and strong economic growth, for
  nearly two decades Turkey has been one of the
  fastest growing power markets in the world. Prior
  to Turkey's economic difficulties in 2001 and
  immediately after, during the recovery period and
  present growth period, projections indicated that
  the rapid growth in energy consumption would
  continue over the next 15 20 years.
• The main objective of the Turkish Energy Policy
  is primarily focused on meeting the national
  energy demand in a reliable, sufficient, timely,
  economic and environmentally sound manner so as
  to realize and sustain the economic and social
  development targets.

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• In this respect, the main strategies are outlined
  below
• Increasing domestic production and optimal use of
  indigenous resources
• In view of the increasing rate of import
  dependency, assigning due consideration to
  diversifying energy sources by fuel and imports
  for ensuring energy supply security
• Promoting energy efficiency/decreasing energy
  intensity
• Increasing efficiency, ensuring transparency and
  creating competition in the energy market through
  liberalization of the sector
• Pursuing the functional role of "Energy Corridor"
  in transmitting the rich energy resources of the
  East to European and world markets
• Assigning due consideration to prevention of
  environmental damages and pollution in the
  National Environmental Policy for pursuing
  sustainable development
• Promoting RD activities on energy technologies
  for optimum utilization of alternative energy
  sources

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• In realization of these objectives, motivating
  the participation of private/foreign investments
  has been adopted as the basic strategy.
• In this respect, the main objective of the
  reforming/liberalization activities in the
  national energy sector with particular reference
  to electricity and gas sectors is to create an
  efficient, stable and competitive energy market
  through encouraging private/foreign involvement
  in the sector. The Electricity Market Law (No.
  4628) and the Natural Gas Market Law (No. 4646)
  which were put into force in March 3, 2001 and
  May 2, 2001 respectively are in full compliance
  with the EU Electricity and Gas Directives.
• The main objectives of the reforming activities
  in the electricity and gas sectors which are
  outlined in the Electricity Market Law and
  Natural Gas Market Law can be summarized as
  follows

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• Introducing a new legal framework for the energy
  sector where private investors will participate
• Establishment of an independent regulatory
  authority in charge of regulation and supervision
  of the electricity and the gas markets. (The
  Energy Market Regulatory Authority, EMRA has been
  established on 19 November 2001
• Liberalization of the electricity and gas markets
• Unbundling of market activities, i.e.
  transmission, distribution, generation, trading
  and import
• Providing regulated non-discriminatory third
  party access
• Decreasing the liabilities of the State resulting
  from BOT investments and take or pay obligations
  in natural gas agreements
• Ensuring implementation of the necessary measures
  for protecting consumers and the environment.

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• Consequently, as regards the functioning of the
  national energy market, the Ministry of Energy
  and Natural Resources is solely be responsible
  for determining policies at macro-level while the
  Energy Market Regulatory Authority carry out
  monitoring, regulating and supervising activities
  in accordance with national energy policies as
  well as within the framework of the provisions of
  the Electricity and Natural Gas Market Laws
  (EMRL). The main functional responsibilities of
  the Energy Market Regulatory Authority are
  centralized on

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• The main functional responsibilities of the
  Energy Market Regulatory Authority (EMRA) are
  centralized on
• - Granting licenses (transmission, distribution,
  generation, auto production, wholesale and
  retail)
• - Approving tariffs
• - Ensuring non-discriminatory access to grids
• - Issuing secondary legislation
• - Ensuring fair and effective competition
• - Determining eligibility thresholds
• For securing the energy supply and diversifying
  the energy resources, optimum utilization of
  domestic resources (coal and hydro) and expanding
  the use of alternative and renewable energy
  sources have been given due priority. In this
  context, a Renewable Energy Law was enacted in
  2005.

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LEGISLATIVE ENVIRONMENT

• When the United Nations Framework Convention on
  Climate Change (UNFCCC) was adopted in 1992,
  Turkey, as a Member of the OECD, was included
  among the countries of the Convention Annexes I
  and II. Therefore, Turkey did not sign the
  Convention because of the obligations of the
  Convention to reduce emissions to the level of
  1990 and to provide technological and financial
  support to the non Annex I countries. On the
  basis of main economic indicators, Turkey's
  degree of industrialization is not yet comparable
  with that of the most of the OECD countries.
  Accordingly, Turkey requested to be deleted from
  the Annexes of the Convention so as to become a
  party to the UNFCCC. In 2001, it has been decided
  during at the seventh meeting of the Conference
  of Parties COP7 in Marrakech to exclude Turkey
  from the Annex II list and recognize her special
  circumstances as an Annex I Party on the basis of
  the "common but differentiated responsibilities"
  principle of the Convention. This implies that
  special circumstances of Turkey would be taken
  into consideration for other additional
  obligations that are defined for Annex I
  countries.

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• This led to an official acceptance of the UNFCCC
  by the Turkish Grand National Assembly in October
  2003, followed by its enactment in May 2004. This
  new position of Turkey will bring her some
  advantages, such as utilization of foreign
  financing assistance for energy efficiency and
  clean technology projects. However, Turkey has
  not signed the Kyoto Protocol to this date but in
  June 2008 the Ministry of Environment and Forest
  recommended the Cabinet of Ministers to sign and
  the Cabinet took the decision to sign even
  probably without any condition.

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• Following the ratification of the UNFCCC, a
  number of working groups were set up with the
  objective to define a climate change mitigation
  strategy and compile the countrys first national
  communication to the UNFCCC. These included a
  working group on mitigation in the energy sector
  and a working group on mitigation in the
  transport sector. However, it remains unclear as
  to when the strategy and national communication
  will be completed. The strategy aims to reduce
  GHG emissions through the implementation of
  appropriate measures and the development of
  climate-friendly technologies. Energy efficiency
  and the development of renewable energy sources
  are two important components of the strategy.
  However, the strategy will not include any
  policies that directly target GHG emissions, such
  as carbon taxation or emissions trading. It also
  does not include a specific target for emissions
  reductions. Nevertheless, Turkey has formally
  been accepted as an applicant to join the
  European Union and has begun a process of
  screening and approximation, where domestic
  legislation is aligned with that of the EU but
  without full compliance. The Kyoto Protocol is a
  part of the EU's acquis communautaire and as such
  may lead Turkey to consider some form of
  emissions reduction requirement in the
  foreseeable future.

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• Throughout this process, the government carried
  out a number of studies on the implications of
  climate change and its mitigation. The first
  efforts were undertaken by the National Climate
  Coordination Group in preparation for the 1992
  Rio Earth Summit. Following this, a National
  Climate Program was developed in the scope of the
  UNFCCC. In 1999, a Specialized Commission on
  Climate Change was established by the State
  Planning Organization (SPO) in preparation of the
  Eighth Five-Year Development Plan (2001-2005).
  The Five-Year Development Plan was the first
  planning document to contain proposals for
  national policies and measures to reduce
  greenhouse gas (GHG) emissions and funding for
  climate-friendly technologies.

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• In Turkey, there is an Environmental Protection
  Law which is strictly imposed. The law functions
  as the legal basis for the enactment of many
  other specific environment regulations.
• The overall objective of reconciling energy and
  environmental policies in Turkey is focused on
  ensuring sufficient, reliable and economic energy
  supplies so as to support sustainable economic
  and social development while protecting and
  improving the environment. Reconciling energy and
  environment policies is addressed both in the
  National Environmental Action Plan (1998) and in
  the National Agenda 21 (2001) which are the most
  recent environmental policy documents. Policies
  on improving energy efficiency and introducing
  clean energy forms and technologies are also
  specified. The National Environmental Policy
  considers that energy policy should take into
  account environmental issues and a rational
  balance should be sought in securing energy
  demand propelled by socio-economic development
  and environmental concerns.

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• Under the Energy Market Regulation Law (EMRL),
  the state-owned Turkish Electricity Generation
  and Transmission Corporation (TEAS) was split
  into separate generation, distribution, and trade
  companies with the eventual privatization of the
  generation and trade companies where the
  transmission of electricity will continue to be
  run by the State. The new law also set the stage
  for the Energy Market Regulation Agency (EMRA) to
  oversee the power and natural gas markets,
  including setting tariffs, issuing licenses and
  assuring competition.
• Main features of the new energy market structure
  encompass
• - A new licensing framework for market
  participants- An energy market comprised of
  bilateral contracts between market
• participants which is completed by a residual
  balancing market in
• electricity
• A cost reflective price structure (no cross
  subsidies are allowed)- Eligible consumer
  concept which means eligible consumers to be
  free to choose their suppliers
  

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• The generation, transmission and distribution of
  electricity in Turkey had been conducted
  predominantly by large-scale public enterprises.
  In 1993, by the Cabinet Decree No 93/4789, the
  Turkish Electricity Authority has been divided
  into two the General Directorate for Turkish
  Electricity Generation and Transmission Inc
  (TEAS), and the General Directorate for Turkish
  Electricity Distribution Inc. (TEDAS).
• An Environmental Impact Assessment Report for
  energy related industrial investments or a
  large-scale energy-related commercial investment
  is required which should be submitted to the
  Ministry of Environment and Forest. For most
  renewable investments, such as wind turbines,
  only a pre-feasibility study is required.

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INVESTMENT OPPORTUNITIES AND AVAILABLE INCENTIVES

• The Turkish Government has had regulations to
  encourage industrial and commercial investments
  for the last 20 years. However these incentives
  are being phased out. It is expected that the new
  legislature which is to replace the existing
  Encouragement Law will only have incentives for
  strategically important and large scale
  investments. There are no incentives available
  for commercial enterprises and households. There
  are no regional differences in the application of
  these incentives. Import tax exemption,
  investment reduction from taxes, VAT exemption,
  other taxes, tariffs, duties, etc., and
  amortization advantages are some of the major
  incentives.
• There are some incentives available for renewable
  energy investments. The Electricity and Natural
  Gas Market Laws and some of the circulars
  prepared and enforced by EMRB includes, although
  limited, certain incentives for new and renewable
  technologies for the investing companies.
  Although these incentives directly apply to
  producers of large scale electrical energy at
  regional levels, they may be applicable to large
  scale renewable applications too.

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• According to the circular issued in July 2003 by
  EMRB, the incentives
• worth mentioning are as follows
• Those investors who apply to EMRB for obtaining
• Production License for projects aimed at
  utilizing
• renewable resources to produce energy
  (electrical) will
• pay only 1 of the regular license fee.
• - The energy plants utilizing renewable energy
  resources
• will not pay the operation license fee for the
  first eight
• years following the investment completion
  date.- These plants will have priority in
  getting connected to the
• national grid by the national transmission
  organization.- Depending on various conditions
  distribution companies will have to
• purchase the energy produced by these plants.-
  The plants utilizing the renewable resources will
  be exempt from the
• standard load acquiring practices as stated
  by EMRB directives.

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BUILDING REGULATIONS AND CONDITIONS

• The Building Codes were last revised in 2004.
  Generally speaking, solar gain is not considered
  in space heating calculations. There are no
  limitations imposed on the size of windows,
  quantity and the directions that the house faced.
  According to the Regulation 25699 Turkey is
  divided into three zones all with different
  insulation requirements and degree day approach
  is no longer being used.
• The new Energy Efficiency Law which is adopted
  on 18.04.2007 covers the energy efficiency
  requirements in industry, in commercial buildings
  and large residential buildings and it transposes
  the European Directive on energy performance of
  buildings. The Law also creates ESCO companies
  and refers to renewable resources. The law also
  brings energy rating and certification of the
  buildings.
• There are several standards in use on heating the
  buildings, related appliances and equipment. The
  number of standards exceeds 200.

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• Since there is a sizeable solar production
  capacity within the country, the need to
  discipline the market has been long realized. The
  Turkish Standards Institute have prepared and put
  into force quite a number of standards at a
  national level, most of which are mandatory. It
  should be noted that there are over thirty
  additional standards on environmental conditions,
  simulation techniques and secondary materials
  used in solar systems. As it is clearly
  understood from the standard numbers, most of the
  recent standards are in full conformance with EN
  Standards. TS 3680 is the primary standard for
  testing the performance of flat plate solar
  collectors. The TSE certificates are based on
  this standard. For solar water heaters the
  majority of tests are carried according to TS ISO
  9459.
• Although there are no viable standards for
  biomass using equipment some work is in progress
  for this purpose.

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OBSTACLES TO RES UTILIZATION

• The main obstacles to wide deployment of RES
  utilization for space and water heating are
  identified as follows
• - Political- Administrative- Economic-
  Informative
• The political obstacles could be determined as
  follows
• - Inadequate legal framework- Lack of investment
  promotion mechanisms from the State-
  Insufficient standardization
• The administrative obstacles find expression in
  the bureaucratic behavior of the administrative
  systems in relation to the investment process.

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• The economic barriers are the following
• Low income of the targeted families living
  mainly in the rural
• areas- High investment costs of efficient
  combustion equipment and
• solar collectors- Relatively low price of
  electrical energy as a competitive source
• These three groups of obstacles combined with
  insufficient education and information about the
  advantages of some categories of highly efficient
  heating equipment and about the possibilities for
  combination of biomass and solar energy with
  fossil fuels make the investment process risky
  and the investors look for another field for
  their activities.
• In spite of the presented obstacles, the review
  of existing strategies, legislature and the
  changing attitude both in the public and industry
  are promising for RES deployment in residential
  heating systems.

50
BARRIERS AND PROPOSALS ON RENEWABLES IN TURKEY
51
MAJOR OBSTACLES TO THE BIOMASS AND SOLAR ENERGY
USE FOR DOMESTIC PURPOSES

• With a young and growing population, low per
  capita electricity consumption, rapid
  urbanization and strong economic growth, Turkey
  has been one of the fastest growing power markets
  in the world for nearly two decades. The main
  objective of the Turkish energy policy is
  primarily to focus on meeting the national energy
  demand in a reliable, sufficient, timely,
  economic and environmentally sound manner, so as
  to realize and sustain the economic and social
  development targets. Renewable energy resources,
  including wind energy, solar energy and biomass,
  are expected to play an important role in the
  near future.
• According to the experts, renewable sources
  priority list includes wind energy utilization,
  small hydraulic plants of less than 50 MW with or
  without (preferably) reservoirs, and solar
  thermal. For securing the energy supply and
  diversifying the energy sources, optimum
  utilization of domestic resources (coal and
  hydro) and expanding the use of alternative and
  renewable energy sources have been given due
  priority. In this context the Renewable Energy
  Law was put into force in 2005.

52

• According to the most of the energy and planning
  experts, renewable energy resources are quite
  important for Turkey for the following reasons
• They are available everywhere in the country and
  the potentials are quite high
• Turkish tourism sector is expected to expand at
  much higher rates than the neighboring countries
  and renewable based applications are common for
  this sector
• With its distributed character, the
  implementation of renewable technologies
  countrywide will create more jobs than any other
  conventional energy investments. Wider use of
  renewable energies will result in creation of
  local jobs which will in turn slow the migration
  to cities and industrial centers.
• Wider utilization of renewable energies will help
  reducing greenhouse emissions.
• There is a considerable annual demand for new
  housing which is estimated to be well above 300
  000 unit each year.

53

• Turkey, being a Mediterranean country, is known
  for her plenty of sunshine and the availability
  of solar energy which is higher than 2 500
  sunshine hours per year. In some regions this
  figure reaches to 3 000 hours per annum. A
  similar situation exists for wind and hydraulic
  energies as well. Turkey has more than 1 of the
  world potential in both of these renewable
  resources.
• Turkey also possesses a variety of biomass
  resources such as forests, agriculture and
  animals. Although traditionally animal dung has
  been used for heating and cooking purposes for
  many years, it is slowly being converted to
  modern uses of biomass energy. Wood and other
  types of traditional biomass accounts for less
  than 10 of the total consumption. It should be
  noted that forest related biomass is concentrated
  in the Black Sea and Mediterranean Regions,
  whereas most of the animal population is found in
  Central and Eastern Anatolia Regions and west of
  the Marmara Region. Agricultural products are
  found in all regions.
• Although the picture is quite bright for the
  solar energy and biomass, only solar energy
  technologies have been quite advanced.
  Unfortunately, biomass utilization has not been
  as fortunate.

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MAJOR OBSTACLES TO THE WIDER BIOMASS UTILIZATION

• Major obstacles to the wider biomass utilization
  or to the renewable resources utilization can be
  classified under three major headings
• Governmental policies on the renewable
  energies2. Public Awareness on the environmental
  issues and their
• knowledge on renewable resources3. Lack of
  financial mechanisms and high initial investment
  levels
• Governmental policies on the Renewable Energies
• The main objective of the Turkish energy policy
  is primarily focused on meeting the national
  energy demand in a reliable, sufficient, timely,
  economic and environmentally sound manner so as
  to realize and sustain the economic and social
  development targets. Although this has been the
  official policy of all the governments formed in
  the last decade, renewable resources have been
  intentionally overlooked.

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• The reasons for the lack of official support are
  given below
• Governments prefer single large projects such as
  nuclear plants or long term natural gas treaties
  to solve the macro problems of energy of the
  country simply because the financial resources
  are limited and they need swift results. Low
  concentrated and distributed characters of the
  renewable resources despite being a remedy to
  creation of new jobs usually drive the policy
  makers away from them.
• Turkey is yet to sign the Kyoto Protocol and
  therefore environmental awareness is not the
  driving mechanism in energy related decisions
  yet.
• Turkeys priorities lie essentially in
  electricity production and distribution. Thermal
  energy production is a distant second.
• For large scale energy investments such as
  nuclear plants the foreign and/or domestic
  investors come with their own financial credits.
• There have been no financial mechanisms offered
  to individual investors for renewable
  investments. As a matter of fact, the only
  financial incentive available is for electricity
  production at large scale.

56
Public awareness on the environmental issues,
knowledge about RES

• Biomass has been used in the form of animal dung
  for decades and it represents one of the
  primitive uses which can be linked to poverty.
  This form of use has been one major road blocks
  to a wider biomass utilization. Thus, it is
  essential that this wrong impression be corrected
  as a first step to a wider use of biomass in
  Turkey. People are unaware of possible modern use
  for domestic heating purposes.
• Although, the introduction of solar energy in its
  modern form to Turkey is more than 30 years old,
  it is not wrong to say that publics knowledge
  and awareness on the new and renewable energy
  resources are not at the desired level.
  Especially, on the biomass utilization, despite a
  huge number of national and local conferences,
  symposiums and meetings, the knowledge is
  limited. It can be safely said that the coverage
  in the printed and visual media which directly
  affects the general public has been very low.

57
Lack of financial mechanisms and need for high
initial investment

• There are no financial incentives available in
  Turkey either for the individual buyers or for
  potential producers of biomass utilizing
  equipment. Thus, as a result, there are neither
  biomass utilizing equipment manufacturers nor
  biomass fuel producers (in solid, liquid or
  gaseous form) in Turkey at present although many
  of the producers said that they were interested
  in biomass, none of them expressed interest to
  invest in the field soon.
• Still the high investment costs and choosing the
  right technology option were the major problems.

58
IDENTIFICATION OF BEST AVAILABLE FINANCIAL
INSTRUMENTS

• Fiscal incentives for
  individual buyers of
• Renewable Thermal
  Equipment
• Incentives available for energy related
  investments of any size can be taken up at three
  different levels. These are
• Incentives available for manufacturers of
  renewable equipment
• and/or systems- Incentives for users of
  renewable systems at large scales- Incentives
  for individual consumers who benefit from
  renewable
• energy such as biomass and solar energy at
  their homes or work
• places at small scale

59

• There are no fiscal incentives for individual
  buyers of renewable equipment for domestic
  heating purposes. Since 1970s, subsidies and
  incentives are available for large scale
  industrial investments, especially if the
  investments are to be made at preferred provinces
  appearing on the official Priority Regions List
  and Organized Industrial Zones. However, there
  are no specific programs for renewable thermal
  applications.
• Although there are no specific incentive or
  subsidy programs designed for large scale users
  of renewable thermal equipment, it may be
  possible to get government subsidies and sizeable
  incentives. If it is possible to classify the
  intended investment as part of a hybrid system
  (auto producer of energy) aimed at producing
  large scale thermal or electrical energy from a
  renewable resource thus replacing the use of
  conventional fuels then a number of incentives
  will be available at all stages of the
  investment.
• Similarly, for large scale housing investments in
  High Priority Provinces, it may be possible to
  obtain certain incentives which can be passed on
  to the individual home buyer if a central heating
  option is chosen. At present, for retrofit
  applications no fiscal incentive is available.

60
Third party financing

• Third party financing is not possible in Turkey
  for domestic heating purposes. There is a very
  limited number of industrial scale attempts to
  implement such a system in the industry through
  the annual energy savings. However, because no
  company has real energy audits and algorithms
  available for their company and the legislature
  at present is not suitable for such applications
  due to lack of ESCOs or similar independent
  organizations for arbitration purposes third
  party financing is not available.

61
Operation of ESCOs

• There are no ESCOs currently in Turkey. However,
  the Energy Efficiency Law calls for the
  establishment of ESCOs. It is expected that the
  Energy and Electricity Survey Administration of
  the Ministry of Energy will grant licenses for
  the ESCOs. It would not be wrong to assume that
  it would take at least two years to fully
  establish the ESCO system.
• One of the major hurdles to the establishment of
  ESCOs is the need for the complete privatization
  of energy distribution in the country. Only then,
  the public sector can assume its true role as the
  policy and regulation maker and macro inspector.
  The privatization process has recently been
  delayed to 2008.

62
FINAL REMARKS

• The main objective of the Turkish Energy Policy
  is primarily focused on meeting the national
  energy demand in a reliable, sufficient, timely,
  economic and environmentally sound manner so as
  to realize and sustain the economic and social
  development targets. In this respect, the main
  strategies are outlined below
• Increasing domestic production and optimum use
  of indigenous
• resources- Diversifying energy sources by fuel
  and imports for ensuring energy
• supply security- Promoting energy
  efficiency/decreasing energy intensity-
  Increasing efficiency, ensuring transparency and
  creating
• competition in the energy market through
  liberalization of the sector- Pursuing the
  functional role of "Energy Corridor" in
  transmitting the
• rich energy resources of the East to European
  and world markets- Assigning due consideration
  to preventing environmental damages
• and pollution in the national environmental
  policy for pursuing
• sustainable development- Promoting RD
  activities on energy technologies for optimum
• utilization of alternative energy sources

63

• The Electricity Market Law (EMRL, No. 4628) and
  the Natural Gas Market Law (No. 4646) were put
  into force in 2001. Both laws are in full
  compliance with the EU Electricity and Gas
  Directives. By the enforcement of the EMRL an
  independent Energy Market Regulatory Authority
  (EMRA) which is run by Energy Market Regulatory
  Board (EMRB) is established.
• The main functional responsibilities of EMRA are
  centralized on
• - Granting licenses (transmission, distribution,
  generation, auto
• production, wholesale and retail)
• Granting
• Approving tariffs
• Ensuring non-discriminatory access to grids
• Issuing secondary legislation
• Ensuring fair and effective competition
• Determining eligibility thresholds

64

• Since its limited conventional energy resources,
  Turkey is heavily dependent on imported oil and
  gas. There are major oil and gas pipelines going
  through Turkey from Asia to Europe and additional
  pipelines are being constructed or are being
  planned. There is some production of lignite
  which is used in power plants and industry.
• For securing the energy supply and diversifying
  the energy resources, optimum utilization of
  domestic resources (coal and hydro) and expanding
  the use of alternative and renewable energy
  sources have been given due priority. In this
  context Renewable Energy Law was put into force
  in 2005.
• The Electricity and Natural Gas Market Laws and
  some of the circulars prepared and enforced by
  EMRB include, although limited, certain
  incentives for new and renewable technologies for
  the investing companies. Although these
  incentives directly apply to producers of large
  scale electrical energy at regional levels, they
  may be applicable to large scale renewable
  applications too.

65

• According to the circular issued in July 2003 by
  EMRB, the incentives worth mentioning for related
  applications are the following
• Those investors who apply to EMRB for obtaining
  Production
• License for projects aimed at utilizing
  renewable resources to produce energy
  (electrical) will pay only 1 of the regular
  license fee.
• The energy plants utilizing renewable energy
  resources will not pay the operation license fee
  for the first eight years following the
  investment completion date.
• These plants will have priority in getting
  connected to the national grid by the national
  transmission organization.
• Depending on various conditions, distribution
  companies will have to purchase the energy
  produced by these plants.
• The plants utilizing the renewable resources will
  be exempt from the standard load acquiring
  practices as stated by EMRB directives.

66

• As it stands, there are no incentives available
  for renewable resources, with the exception of
  large scale electricity production. The only
  instrument that seems to be available is the
  small bank credits given by most banks but the
  interest rates are high.