TURKEY WIND MARKET

Outlook 2013 ÷ 2018

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TURKEY WIND MARKET: OUTLOOK 2013 ÷ 2018

INEA CONSULTING LTD. | 3

This market report offers an incisive and reliable overview of the wind sector of the country

for the period 2013 ÷ 2018. In view of recent cuts in FIT’s announced in Germany, Spain,

France, UK, Czech Republic, Slovakia, Bulgaria and Italy, Turkey represents a stable

investment environment in South-East Europe with clear rules and green certificates

support scheme. Current cumulative installed wind capacity in the country is growing fast

and Turkey is one of the best performers amongst SEE countries for 2011 and 2012. Turkish

market has good chances to reach more than 4,700 MW in the next 2 years. The report

provides a complete picture of the market situation, dynamics, current issues and future

prospects. You will find more than 60 pages of valuable information in this unique in-depth

analysis of the Turkish wind market. With comprehensive market data this report brings

clear and concise insights, to help investors in their decision making process. As 2011 and

2012 were challenging years for wind industry, the time for taking right decisions during

2013 and the next few years is limited. Fast changing market environment, requires

relevant and accurate information. For your convenience we offer opportunity for orders

with customized report content. Reasons to buy this market report are, but no limited to:

Brief overview of the Turkish political and economic environment Wind resource potential in Turkey Overview of Turkish wind market development 2000 ÷ 2018 Grid connected wind installations for 2012/2013 Future market trends and planned wind projects for 2013 ÷ 2018 Current market prices of fully permitted and operational wind projects Turkish legal and energy regulatory framework for renewable projects Key companies and competitive landscape in wind sector Review of most relevant financing and supporting incentives SWOT Analysis

At next pages you will see the full table of content of this report. To order the report

just fill in and send us the enclosed at the last page order form. If you have any other

questions please do not hesitate to call us on ++359 887 342 475 or write an e-mail to

orders@ineaconsulting.eu

TURKEY WIND MARKET: OUTLOOK 2013 ÷ 2018

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TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................................... 3

FOREWORD ..................................................................................................................... 7

1 METHODOLOGY .................................................................................................... 9

2 EXECUTIVE SUMMARY......................................................................................... 11

3 TURKEY POLITICAL AND ECONOMIC ENVIRONMENT ............................................ 13

Basic country data ................................................................................................... 13 3.1 Political Climate and Ruling Party ........................................................................... 16 3.2 GDP and Economic Growth ..................................................................................... 17 3.3 Electricity Imports and Exports. Electricity prices for business and households .... 19 3.4 Taxes ........................................................................................................................ 21 3.5

3.5.1 VAT ....................................................................................................................... 21 3.5.2 Income and Corporate Taxes ............................................................................... 21

4 TURKEY WIND ENERGY MARKET .......................................................................... 22

General electricity market information .................................................................. 22 4.14.1.1 Electricity Consumption and Production ............................................................. 24 4.1.2 RES targets ........................................................................................................... 25 Wind market ............................................................................................................ 26 4.2

4.2.1 Why invest in wind energy in Turkey? ................................................................ 27 4.2.2 Turkey wind resource potential .......................................................................... 28 4.2.3 Overview of Turkey wind market ........................................................................ 29 4.2.4 Market prices for wind energy projects in Turkey .............................................. 31 4.2.5 Key development projects and operational wind power plants in Turkey ......... 31

5 EUROPEAN RENEWABLE ENERGY POLICY LANDSCAPE .......................................... 34

RES Regulations and EU Directives.......................................................................... 34 5.15.1.1 Precedent EU regulations .................................................................................... 34 5.1.2 Most recent EU renewable energy policy developments ................................... 35

6 TURKEY RES LEGAL AND REGULATORY FRAMEWORK ........................................... 36

Main laws and regulations ...................................................................................... 36 6.1 Support schemes ..................................................................................................... 37 6.2 Mandatory wind measurements ............................................................................. 39 6.3 Competition regulation (tender procedure) ........................................................... 39 6.4 Zoning, planning and construction related authorizations ..................................... 40 6.5

6.5.1 Zoning plans procedure ....................................................................................... 41 6.5.2 Building permit (construction license) procedure ............................................... 41 6.5.3 Operation License Procedure .............................................................................. 42 Environmental related authorizations .................................................................... 42 6.6

TURKEY WIND MARKET: OUTLOOK 2013 ÷ 2018

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6.6.1 Natura 2000 Network .......................................................................................... 43 6.6.2 Clean Development Mechanism (CDM) and Joint Implementation (JI) .............. 43 Energy law authorizations ....................................................................................... 44 6.7

6.7.1 Power Generation Licensing ................................................................................ 44 6.7.2 Grid Interconnection ........................................................................................... 45 6.7.3 Power Off-Take .................................................................................................... 45 6.7.4 Feed-in tariff (FIT) ................................................................................................ 46 6.7.5 RES Certificates .................................................................................................... 48 Financial Incentives and Support for RES electricity ............................................... 48 6.8 Future market pricing mechanisms......................................................................... 49 6.9

Key Co-financing opportunities ............................................................................... 49 6.106.10.1 Turkey Sustainable Energy Financing Facility (TURSEFF) .................................... 49 6.10.2 Green for Growth Fund ....................................................................................... 53

7 KEY ORGANIZATIONS AND INSTITUTIONS ........................................................... 54

Government ............................................................................................................ 54 7.17.1.1 The Ministry of Energy and Natural Resources (MENR)...................................... 54 7.1.2 Energy Market Regulatory Authority (EMRA) ..................................................... 54 7.1.3 General Directorate of Electrical Power Resources Survey and Development Administration (EIE) ........................................................................................................ 54 7.1.4 Ministry of Environment and Forestry (MoEF) .................................................... 55 7.1.5 Energy Efficiency Co-ordination Board (EECB) .................................................... 55 7.1.6 State Planning Organization (SPO) ...................................................................... 56 Electricity GENERATION AND ELECTRICITY Distribution Companies ...................... 56 7.2

7.2.1 TEIAS .................................................................................................................... 57 7.2.2 EUAS and PP’s ...................................................................................................... 58 7.2.3 TETAS ................................................................................................................... 60 7.2.4 TEDAS and Private DisCos .................................................................................... 60 Key wind companies operating on TURKEY market ................................................ 61 7.3

8 SWOT ANALYSIS ................................................................................................. 63

9 CONCLUSIONS .................................................................................................... 66

10 LIST OF ABBREVIATIONS ..................................................................................... 69

11 REFERENCES ....................................................................................................... 71

12 DISCLAIMER ........................................................................................................ 74

APPENDIX I. WIND MAPS OF EUROPE AND TURKEY ....................................................... 75

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LIST OF MAPS, CHARTS AND TABLES

Map 1: Where is Turkey on the world map .............................................................................. 13 Map 2: Major transport corridors passing through Turkey ...................................................... 14 Map 3: Turkey regions .............................................................................................................. 15 Map 4: Wind potential of Turkey at 50 m ................................................................................ 28 Map 5: Turkey Wind Speed and Power Density Map at 50 m .................................................. 29 Map 6: Electricity grids network of TEIAS ................................................................................. 57 Map 7: Hydro Power Plants of EUAS ........................................................................................ 59 Map 8: Thermal Power Plants of EUAS ..................................................................................... 59 Map 9: Districts covered by TEDAS and DisCos ........................................................................ 60 Map 10: Turkey Mean Wind Speed at 80 m, 3TIER Inc. 2009 .................................................. 75 Map 11: Mean 80-m wind speeds in Europe for year 2000 from Stanford University ............ 75 Map 12: Global Mean Wind Speed at 80 m, 3TIER Inc. ............................................................ 76 Map 13: European Wind Atlas, Risø DTU National Laboratory, Denmark ............................... 77

Chart 1: Real GDP growth for the period 2000-2018 (including estimates) ............................. 18 Chart 2: Turkish GDP growth compared to EU-27 for the period 2002-2018 .......................... 19 Chart 3: Electricity imports and exports for the period 2000-2018 (in million MWh) including estimations ................................................................................................................ 20 Chart 4: Corporate tax income in selected CEE and SEE countries .......................................... 21 Chart 5: Historical Structure of Turkish electricity market from 1983 to 2012 ........................ 23 Chart 6: Share of RES electricity in gross energy consumption 2012 ....................................... 24 Chart 7: Turkish RES targets for 2023 in % set by the State Planning Organization ................ 25 Chart 8: Cumulative developments of wind power plants in Turkey in MW from 2000 to 2018, including estimates ........................................................................................................ 33 Chart 9: TURSEFF Structure ...................................................................................................... 51 Chart 10: Market Shares by Sales of the Major Electricity Distribution Companies in Turkey in 2012........................................................................................................................... 56 Chart 11: Share of power producers in Turkey by installed capacity ....................................... 58 Chart 12: Unrestricted technical potential for onshore wind energy up to 2030, based on estimated 80 m. average wind speeds 2000 – 2005, EEA 2008 .......................................... 78

Table 1: Electricity prices for business and households ........................................................... 20 Table 2: Support schemes for RES generation in the EU countries and Turkey ....................... 26 Table 3: Market prices for wind projects in Turkey for 2012 ................................................... 31 Table 4: Selected operational, under construction and planned wind projects in Turkey ...... 32 Table 5: Feed-in-tariffs for electricity from renewable sources in Turkey ............................... 47 Table 6: Additional incentives to Feed-in-tariffs for electricity from wind sources in Turkey for domestic procurement ............................................................................................ 48

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