March 2021 - On 3 March 2021, a decision of Turkey's Energy Market Regulatory Authority ("EMRA") dated 25 February 2021 was published in the Official Gazette ("Decision") to announce that the allocation of 2000 MW for wind projects will be made through Renewable Energy Resource Areas ("RERA(s)") tenders instead of by licensing.
Prior to the Decision, it was planned that a capacity of 2000 MW would be allocated by licensing for wind power plants; however, the dates on which the license applications for this capacity would be accepted have been postponed many times since its allocation.
With the Decision, EMRA has decided not to accept license applications for this capacity as it is now being reserved for auction as RERAs-large-scale areas suitable for renewable energy investment-by Turkey's Ministry of Energy and Natural Resources ("MENR").
RERAs were introduced in 2016 as a new investment model to support renewable energy investments, to ensure efficient and effective use of renewable energy, and to facilitate R&D activities and domestic manufacturing of technological equipment used in renewable energy-based power plants. As per the Regulation on Renewable Energy Resource Areas enacted on 9 October 2016, there are two methods for the designation of RERAs: (i) designation of RERA by MENR prior to the RERA tender, and (ii) capacity allocation by MENR through RERA tender and designation of RERA by the winner of an RERA tender together with MENR.
RERA Usage Right Tenders are announced occasionally in the Official Gazette. The bidding process for RERA projects is on a Dutch-auction basis starting from the price ceiling that is determined in the contest specifications and taking into consideration the feed-in tariff and local component bonus set forth in Turkish renewable energy legislation. The lowest bidder wins the tender, is granted the right to sign an RERA Usage Right Agreement with MENR, and also benefits from a purchase guarantee for a fixed term, while being obliged to either establish an equipment manufacturing company as well as an R&D Centre or to use domestically manufactured or supplied equipment, up to certain ratio.
While there has not yet been any announcement made by MENR regarding an RERA tender for wind projects for 2021, the Decision signals that a new RERA tender is on the horizon.
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