Postponements in wind damage investments
Turkey gives great importance to renewable energy sources to reduce its foreign dependency on energy. In this regard, solar, biomass, geothermic and wind investments have been encouraged through the YEKA processes, because there is no excuse when you can’t meet power demand. New energy investments are, in principle, generated by the private sector and have been primarily supported by the private sector since the early 2000s.
Energy investments, however, suffer from long periods in terms of return on investment. Therefore, although a part of those investments are financed with equity capital, it is always necessary to find foreign funds (credit, debt securities issuance, angel investor support, etc.) to establish power plants.
To find foreign funding, it’s crucial to have a viable project. But regardless how good the project is, if you don’t have an attractive investment, there’s nothing you can do.
Why am I writing about something so plainly obvious? Well, in mid-March, it was announced that the issuance of wind license applications would be postponed again for two years. It was the third time this decision was made and came only weeks before the process of issuing licenses was set to resume in early April.
Whether this was a right or wrong decision is debatable, and dependent on many technical details. But obviously the timing is wrong, because receiving and assessing applications is a very long process and to eventually establish and run these power plants takes time. So, what you do in practice is postpone a pre-license application date which was announced three years ago twice.
As you want to focus on the YEKA auction and projects from previous application processes, the first two postponements may be understandable. But what’s the justification for the postponement for another two years?
If you claim that Turkey has a 50,000 to 150,000 megawatt wind power potential and your target is to have 20,000 megawatts installed by 2023, no offence but it won’t be easy to make it happen with such postponements. For those preparing for the April application process - planting wind measurement masts, accruing expenses – it was like a last minute goal: there is no coming back from it.
These kinds of last-minute goals not only discourage energy investments but also inflict a heavy blow on the attractiveness of the overall investment atmosphere. Hence, they damage the efforts of the Prime Ministry, Ministry of Development, Ministry of Energy, Ministry of Science and Energy and many other agencies.
Therefore, we need to review the decision of EPDK, the regulatory authority of energy and oil prices, once more and we should find a way to collect all pre-license applications as soon as possible. Moreover, we should develop a new and robust roadmap.