 A law on renewable energy resources would contribute to government coffers rather than burdening the country, as the Turkish Treasury has suggested, a member of one of Turkey’s leading unions said Sunday.
Alpay Ünal, an energy-sector assembly member of the Union of Chambers and Commodity Exchanges, or TOBB, said that he had requested an appointment on behalf of 16 sector representatives with Prime Minister Recep Tayyip Erdoğan and President Abdullah Gül about the Renewable Energy Resources, or YEK, draft becoming a law. “We have been waiting for this law for 12 months,” he said.
Turkey has hydroelectric power plant projects with a total installed capacity of 25,000 megawatts set to start operating within the next 10 years, said Ünal, who is also the chairman of the ALBE Group, a Turkish energy company. Should the YEK law come into effect, $12.5 billion will flow into the turbine market – 38 percent of which will be transferred to the government’s cashbox as value added tax, or VAT, and income tax, he said.
“If the incentive is introduced, production centers will be built within one or two years. The capacity of wind turbines is expected to be 10,000 MW and the equipment for these turbines is worth $10 billion,” Ünal said, noting that Turkish industrialists can produce every kind of machinery and equipment. “All of the investment is to stay in Turkey. Solar-energy investments are expected to total 20,000 MW within 20 years and the solar-energy equipment market is worth $60 billion.”
Unless the government takes the necessary actions, China and Europe will dominate the market for renewables, Ünal said. “There are 200 projects, each employing 300 to 400 people in construction. The government should look at the big picture,” he said, noting that construction can create jobs for a total of 60,000 people, and adding, “I believe that this figure can increase to 100,000 people.”
Many investors in Turkey have been disillusioned by the suspension of the YEK law, the TOBB representative added. “Both international and national companies, as well as large scale and small firms are ready for the investments,” Ünal said. “The doctor should arrive before the patient dies.”
Relationship between banks, energy sector
Commenting on banks’ role in energy investments, Ünal said: “The smallest investment in energy is worth $10 million. It is hard to find financing.” Noting that bank and sector relations are currently in a good position, he added that these relationships might be threatened if the law does not come into force.
Unless the law takes effect, Ünal said, electricity prices will increase and both energy and international investments will come to a halt. “As a result, it will be very hard for the sector to stand again and trust the government,” he added.
In November 2007, the Energy Market Regulatory Authority, or EPDK, received applications for a tender to construct a 74,000 MW wind turbine, and it did not take any license cost, Ünal said. In spite of this fact, investors who received letters of guarantee paid commissions to the banks and continued to do so even though the tender processes did not start. “It has been a very long time and the government has done nothing,” he added. “We are waiting and hoping that the law will take effect and the bureaucracy will work faster.”
The European Union, which aims to allocate 20 percent of its energy investments to renewable sources by 2020, will support investments with 443 billion euros, Ünal said.
Noting that Turkey has more renewable-energy resources than many EU countries, he said, “In order to meet the energy demand, the country needs $130 billion in investments by 2020.” If the YEK law takes effect, 55,000 MW may be added to the current 42,080 MW of capacity.
Many foreign investors would like to be involved in energy investments in Turkey, said Ünal, who urged the country not to allow neighboring countries to snatch them up.
The YEK law will contribute to current account deficit figures, employment and production, said Ünal. “It will boost innovation and research and development activities while reducing electricity prices, creating support for domestic producers and industrialists,” he added. “In terms of the foreign market, it will reduce dependence on imported items and prevent foreign exchange loss.”
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