"We have created a success story in energy, the champion sector is also wind"

Organized by the Turkish Wind Energy Association (TÜREB) with the motto "Wind Energy, Hometown Issue", the 8. Speaking on the second day of the Turkish Wind Energy Congress, Garanti BBVA Corporate Loans and Project Finance Structuring Director Emre Hatem said that Turkey has compiled a success story in energy and that the champion sector is wind. "All of the 2,500 MW projects we have financed are paying their loans without any problems," Emre Hatem said, "So things are going well in the wind sector we finance. This means that banks will continue to look at the sector positively from now on."

The session, which was titled "Overview of the Post-YEKDEM Period", was moderated by TÜREB Board Member Tuna Güven. In addition to Emre Hatam from Garanti BBVA, Cem Aşık, President of the Electricity Producers Association EÜD, Enes Tatbak, Senior Financial and Commercial Analyst of RES Group, and Juan José Díaz Gonzalez, DNV-GL Energy Consultant, the session brought to the agenda the status of the power plants that will gradually be released from the YEKDEM application in the next 5 years, mainly wind.

"The most trouble-free sector in financing is the wind sector"

Garanti BBVA Corporate Loans and Project Finance Structuring Director Emre Hatem stated that thanks to the renewable energy projects implemented by YEKDEM, our import costs are lower in energy and our electricity bill is lower today, and that low prices due to supply-demand balance are an important factor behind the restructuring problems experienced in the energy sector, and that the main reason for this is that oil prices are unexpected and very fast, especially between 2015-2018. stressed that there are declines. Touching on the issue of excess supply, Hatem said, "We, as banks, predicted that there would be a surplus of supply and we were cautious because projects were raining on us for a while. So we were selective. If some projects need to be structured today, I think the biggest problem here is the decrease in oil prices rather than the supply-demand balance." Stating that although there are still problematic loans, most of them are being solved, Hatem said, "Nevertheless, we have created a success story in energy, and the champion sector here is the wind sector. The most trouble-free sector in financing is the wind sector. So things are going well with the wind projects we are funding. This means that banks will continue to look at the sector positively from now on." Emre Hatem, who stated that they do not think that there will be a large-scale and zero natural gas or thermal power plant investment from now on, said that they expect a total of 15 thousand MW of renewable energy investment to be activated for the next 6 years. "We can discuss the rates, but we believe that the economy will grow. Even if these investments are made, the current surplus situation may disappear until 2025 at the latest with increasing consumption."

"The surplus margin will melt rapidly after 2023, we should not wait but act now"

Pointing out that Turkey has an installed capacity of 90 thousand MW, Cem Aşık, President of the Electricity Producers Association EÜD, pointed out that there was a 1.4 percent decrease in electricity consumption compared to last year. Despite this, after 2023, this surplus margin will melt rapidly and it is necessary to act now instead of waiting, Aşık said: "There is no very serious project in the private sector other than the power plants that will catch up until the end of 2020, but there are serious figures that will not be underestimated even on the wind side alone, it seems that it will be activated in only 2 to 3 thousand MW wind. Apart from that, there are several state projects, there is also a nuclear project, totaling 4,800 MW. Secondly, there is the idea of tendering by developing domestic lignite fields. If these are done, there will be no decrease in supply. But the issue of where the prices will go is also very important."

"We expect a significant increase in wind that will exceed 10 thousand MW in the next 10 years"

Reminding that the share of renewable energy in Turkey is currently at the level of 44 thousand MW in total, Cem Aşık said, "We expect a serious increase in wind. In the next 10 years, at least 10,000 MW in wind, hopefully 15,000 MW may enter. We have several scenarios about what will happen to the wind farms coming out of YEKDEM." "First of all, the income of wind farms will suddenly decrease from $ 73 to $ 45-47," said Aşık, stressing that the state should be one of the parties in the dynamics of the formation of electricity prices and that the policy of subsidizing the industry through energy should be abandoned. "Of course, the industry should be supported, but this support should be direct. The support on these prices will soon be of interest to a much larger proportion of electricity producers. We also have other main topics such as lack of predictability, currency uncertainty and regulatory uncertainty," Aşık said, adding the following for the post-YEKDEM period: "There are various scenarios about the power plants that will come out of YEKDEM and what new investors can do. The first one will be companies that will make their own optimization according to their size, but in the market we see, there are companies that are established and developed to serve these companies. It seems that it will be possible to work with a deal on a fixed price purchase or an outgoing price. There are also two models for new investment, one YEKA model, for example the announced mini or maxi YEKAs, and the other is YEKDEM."