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Turkey extends state incentive periods for businesses engaged in renewable energy

September 21, 2020
Posted in Energy
Presidential Decision 2949 dated September 17, 2020, extended previously announced feed-in rates for renewable energy.

Law no. 5346, the law on the Use of Renewable Energy Resources for the Purpose of Generating Electric Power (the “Renewable Energy Law”), defines renewable energy resources as including hydraulic, wind, solar, geothermal and biomass among others. The Renewable Energy Law, along with other applicable legal framework, established a Renewable Energy Resources Support Mechanism, known as YEKDEM, whose purpose is to encourage businesses to invest in energy generation from renewable resources. Presidential Decision 2949 extended the main two government incentives provided under YEKDEM as follows:

(1) Producers are able to sell the electricity generated from renewable resources at a rate based on a fixed price in US dollars per kWh. The fixed price varies according to the type of renewable energy used in generating the electricity. Some renewables, such as geothermal, biomass and solar, have fixed higher prices assigned to them than other types.

For renewable energy businesses that begin operations between January 1, 2021 and June 30, 2021, Presidential Decision 2949 provides this incentive until December 31, 2030. Previously, only companies that began operations until December 31, 2020 were eligible for this incentive.

(2) To encourage the production and use of domestically manufactured components to generate renewable energy, an additional subsidy (in US dollars) per kWh may be added to the fixed prices mentioned under (1) if the energy is produced using domestically manufactured components.

Presidential Decision 2949 extends this subsidy for a duration of five years, commencing from the date when the business starts operations.