 Tuesday, September 1, 2009 ISTANBUL – İhlas News Agency
Turkey’s renewable energy potential has been turning a lot of heads lately, however there are some deficiencies in regulations.
Delays, uncertainties and problems with the incentives system are also causing foreign investors to get cold feet when it comes to entering the market, according to a report by international supervising, tax and advisory firm PricewaterhouseCoopers, or PwC.
With its report titled “Opportunities and Difficulties in Renewable Energy Market of Turkey,” PwC hopes to provide an efficient guide to both local and international investors seeking opportunities to invest in the country’s renewable energy market.
In line with the contraction of loans in the first half of the year, a very convenient acquisition environment has emerged for the investors who have cash, said PwC Turkey Energy Industry Leader Faruk Sabuncu.
“However, the race for attracting investors has entered a new dimension as investors have also become more selective. Now, incentives to satisfy the investors’ appetite and demand, as well as a reliable law supporting these incentives, are very important,” he said.
The report analyzes the resource potential in this field, developments in the investment climate and novelties that would be brought about by the planned changes to the Renewable Energy Act 5346, which is expected to be adopted by Parliament before the end of this year. The report provides detailed information on renewable energy sources, such as hydroelectric, wind, solar and geo-thermal as well as the basic problems of the industry and suggestions for solutions.
The purchasing-guarantee system is not working properly and the draft act aiming to solve this issue should be enacted as soon as possible, the report said. According to the report, many of the licenses do not turn into real projects and this causes major errors in supply forecasts.
"There was a lot of interest in producing electricity from renewable sources before the global financial crisis. However, the licenses that were granted became goods sold for high prices instead of turning into real projects,” said PwC Turkey Advisory Services Manager and Energy Expert Fulya İlbey, who wrote the report. “The amendment to the law in 2008 brought a more serious approach to the completion of projects by strengthening sanctions on obeying project completion dates,” she said. “Consequently, firms need to use technical and financial feasibility services in order to better determine investment risks. In other words, earnings acquired in other industries should not be used for investments in the energy sector aiming to obtain high revenues in the short term.”
The investor companies should change their perspectives to long-term with the support of expert companies, İlbey said. “Additionally, decision-makers who are obliged to form a healthy market structure have a big responsibility to enact the required legal amendments. In this context, we hope our report will contribute to the communication between current and potential investors and decision-makers.”
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