In Turkey, one solar tender(YEKA 3) has been concluded and two other solar tenders notices(YEKA 4 and YEKA 5) has been published in 2021. Currently in Turkey, If you do not take the self-consumption or hybridization models into account, there are no SPP investment options other than YEKAs. Each YEKA has its own rules. So, many people ask which model is more suitable and evaluable for us?
Although there are many differences between YEKAs, the most important difference is the deadline of Feed In Tariff(FIT). Chronologically, YEKA-3 winners earn income from the bid price for first 15 years and market price for last 15 years(total license term is 30 years). For first 15 years, the price is revised every 3 months with a formula that includes PPI, CPI, EUR and USD. In YEKA-4 and YEKA-5 respectively, FIT does not finish after 15 years. Instead; the FIT is valid for the first 23GWh/MWe that has been produced. Once the 23GWh/MWe benchmark has been passed; remaining income is from the market.
The reason of this change is that there are some cases in which license rights can be exercises for 8 years the period they were given for. The price of the first 15 years(hence the bid price) is lower than the market price. Once the delays in project is accepted; the project benefits from decreasing CapEx. If 8 years extension can be applied for YEKA-3, it would have been observed that IRR and NPV are affected positively. Increase in IRR and NPV are respectively %30 and %60. However with the new rules introduced, revenue will be fixed for the first 23GWh/MWe produced, so this strategy will not work. Moreover, SPPs will be optimized by utilizing the latest technologies in order to reach market price quickly.
We can analyze the effect of technology by comparison. For example, consider SPPs that used fixed system with a specific yield of 1700 MWh/MWe/Year. In this case, the SPP reaches to 23GWh/MWe in 13.5 years. Than consider a SPP that uses tracker system in same location and the specific yield is 2.000 MWh/MWe/Year. In this case, the SPP reaches to 23 GWh/MWe in 11.5 years. This difference affect %20 of IRR and %50 of NPV. That’s the reason that investor should think about the technology to get more production from SPPs.
Another issue will be the location of SPPs. We can mention the major difference of YEKA-4 and YEKA-5 with this example. All project areas are announced by the ministry in YEKA-4 in contrast to YEKA-5. It means, all bidders will contest with the same irradiation value in YEKA-4. In this situation, investors will evaluate only design and financial options. In YEKA-5, investors will be prepare the same structure with YEKA-3 and they will find their project area in 23 cities. So we will see different FIT terms that change between 11 years and 16 years and this seems to confuse financial institutions.
Each Solar YEKA is shaped on its own dynamics.
So, which YEKA is for you?
You can find the Turkish version of the article here.