Law and regulationEvent
Turkey: YEKDEM reworked — biogas at 0.54 TL/kWh, lira rates with a USD cap
Presidential Decision No. 3453 of 30 January 2021 converted Turkish YEKDEM support into lira: 0.54 TL/kWh for biogas and 0.32 TL/kWh for landfill gas, with a cap in US cents.
Other language versions: polski.
YEKDEM is the Turkish renewable energy support mechanism under which a generator receives a fixed price for energy for 10 years. At the start of 2021 Turkey changed its logic: rates previously expressed in dollars were converted into lira, with a cap in US cents.
The old dollar rates
The original system from 2011 had rates in US cents per kWh: 7.3 for wind and hydro, 10.5 for geothermal and 13.3 for solar and biomass. In September 2020 a presidential decision moved the commissioning deadline for new installations from the end of 2020 to 30 June 2021; plants operating from 1 January to 30 June 2021 could count on support until 31 December 2030.
Decision No. 3453
Published in Official Gazette No. 31380 of 30 January 2021, the decision covers installations commissioned from 1 July 2021 to 31 December 2025. The lira rates and the USD update caps:
| Source | Price | Update cap |
|---|---|---|
| biogas (anaerobic digestion) | 0.54 TL/kWh | 8.60 USD cents/kWh |
| biomass | 0.50 TL/kWh | 8.00 USD cents/kWh |
| landfill gas | 0.32 TL/kWh | 5.10 USD cents/kWh |
In the description by the law firm Legal 500, the "biomass" item appears as thermal disposal in biomass installations.
Update rules
Prices are updated every quarter (January, April, July, October), starting on 1 April 2021. The formula takes into account producer price indices (PPI) and consumer price indices (CPI) as well as average dollar and euro exchange rates; the weights are as follows. USD/TL: 24%. EUR/TL: 24%. CPI: 26%. PPI: 26%. An update may not exceed the caps in US cents, so in practice the dollar acts as a ceiling on the price.
Local content component
The supplement for using domestic equipment is 0.08 TL/kWh for all types of installation and applies for five years from commissioning; the details are to be regulated by a ministry regulation.
What follows from this
With high inflation in the lira, the indexation mechanism was meant to protect the real value of the rates, while the USD cap was meant to protect consumers. For an investor this means revenue that varies over time and a need to analyse exchange rates. A lira nominal figure without a date says little, because the lira–zloty rate changes quickly.
Sources
Questions and answers
How long is the support period in YEKDEM under Decision No 3453?
10 years from the start of operation of the installation. For the price with a local component, five years and a supplement of 0.08 TL/kWh are provided.
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