To achieve its renewable energy targets1, the Turkish government has embarked on the development of renewable energy resource area projects (“RERAs”) on privately owned as well as public lands. The projects are awarded by the Ministry of Energy and Natural Resources (the “Ministry”) through a tender process. The Ministry recently announced that the tender process for the allocation of 74 solar energy-based RERAs in 36 different regions will proceed next month. Applications by interested bidders are being accepted between March 8 and 12, 2021.
To date, there have been three large-scale RERA tenders awarded for solar and wind power projects, each having an installed capacity of 1 GW. In addition to large scale projects, the government has long planned for smaller RERAs, distributed in different regions in Turkey. The current tender for mini solar RERA projects, originally announced in July 2020 with an application deadline in October 2020, is the first such mini-tender to move forward.
The connection capacity of RERAs in this round of tenders range from 10MWe to 20 MWe with a total allocated capacity of 1,000 MWe. The offtake period is 15 years from the execution of the usage right agreement. Tenders will be organized through an underbidding procedure, where the applicant offering the lowest rate over the Ministry’s announced ceiling will win the tender. The rate announced by the Ministry is 35 kuruş/kWh.
The general tender announcement outlines the following participation criteria: (1) bidding is limited to joint stock or limited companies established under the Turkish Commercial Code; (2) companies must be able to provide the Ministry with letters of guarantee, amount of which will depend on the relevant connection capacity; and (3) no specific financial criteria or technical capability is required. Further tender requirements are detailed in the tender specifications document to be purchased by the interested bidders.
1 According to the Ministry’s Strategic Plan (2019-2023), the annual targets (in MWe) for electricity generation from renewable energy resources for 2023 are as follows; (i) 10,000 for solar, (ii) 11,883 for wind, (iii) 32,037 for hydraulic and (iv) 2,884 for geothermal and biomass. Note that according to the Ministry’s Performance Report (2020) electricity generation from renewable energy resources in 2019 is reported to be (in MWe) (i) 5,750 for solar, (ii) 7,633 for wind, (iii) 29,748 for hydraulic and (iv) 2,319 for geothermal and biomass.