February 2021 – On 30 January 2021, Presidential Decision No. 3453 (the “Decision”) was published in Turkey’s Official Gazette and entered into force on the same date. The Decision is based on the authority granted to the Turkish president on 2 December 2020 pursuant to the Law on Renewable Energy Resources for the Generation of Electric Energy (No. 5346) to set feed-in tariffs and local-component usage bonuses available under the “RER Support Mechanism” for renewable energy plants commencing operations after 30 June 2021 on a Turkish-lira basis.
As per the Decision, the following terms apply for renewable energy projects commencing operations as of 1 July 2021:
For feed-in tariffs, the Decision also envisages ceiling prices for the escalated prices, in order not to exceed a ceiling amount based on USD. Where an escalated price would exceed the ceiling price, the ceiling price as converted into Turkish liras (based on average of daily buying rates for USD announced by the Turkish Central Bank for the second, third and fourth months prior to the first month of the relevant quarter) shall apply. The relevant ceiling prices determined by the Decision are listed below:
The most striking change under the Decision—and one that has long been flagged since the enabling legislation in December 2020—is the conversion of the feed-in tariff and bonus for the local-component use from a USD-priced scheme to a Turkish-lira priced scheme. Indeed, USD pricing now sets a maximum price ceiling for incentives. The Decision will only apply to plants commencing operations as of 1 July 2021.
This new scheme under the Decision is also different to the current scheme in that the same price applies for local-component bonuses irrespective of the component type and envisages different prices for biomass-based generation facilities, based on the specific characteristics of the facility.
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 The letter of the provision is not clear; therefore, it is reflected as written in the Decision. Nevertheless, our interpretation is that, for the escalation to be made on 1 April 2021, the ceiling price will be calculated by converting it into Turkish liras based on the average of the daily buying rates of December 2020, January 2021 and February 2021.