An easy win for Turkey: leaving behind imported coal
New wind and solar power now cheaper in Turkey than running existing coal plants relying on imports
About
Ember analysis reveals rising prices for imported coal, and falling costs for installing new wind and solar in Turkey.
This means that it is now cheaper to build new wind or solar for power generation in Turkey than running even the most efficient hard coal power plant that relies on coal imports.
Executive summary
Key findings
Rising coal prices in the world now make it cheaper to build a new wind or solar park for power generation in Turkey than running even the most efficient hard coal power plant that relies on coal imports.
- In Turkey, new wind power installation costs are 32% lower than five years ago, and new solar power installation costs are 50% lower
- International hard coal prices are 3 times higher than a year ago
- In Turkey, new wind and solar power are now cheaper than existing imported coal power generation costs, even without a carbon price.
- Turkey has 9 GW of coal power installed capacity that relies on coal imports, which makes up 45% of its total coal power capacity
- Turkey can dramatically lower its multi billion dollars coal import bill and potential carbon border levy by switching to cheaper green alternative
Imported coal is costing Turkey
Renewables are now the more economic option
In Turkey, unlicensed power generation legislation allows consumers to install power generators of less than 1 MW at their consumption points to supply their own consumption without the obligation of setting up a company and on-site solar measurement etc. This type of power plant is managed by the relevant distribution companies and has 10-year power purchase guarantees under the renewable feed-in tariff scheme.
Conclusion
Win-Win-Win
Lower import bills, lower emissions, lower carbon levy by the EU
Turkey could see several advantages from switching from imported fossil sources to local alternatives for power generation. It will not decrease the import bills only, but decrease the carbon intensity of power generation as well. A possible implementation of a carbon border tax including indirect emissions from the goods imported by the EU from Turkey may cause an economic loss between 2.7-3.6% of Turkey’s GDP by 2030. A switch into wind and solar from imported coal is not only economically more viable and keeps a huge amount of money inside Turkey, but it will also reduce air pollution. Despite their young ages, some imported coal power plants in Turkey rank highly for air pollution among all European coal power plants.
The transition from imported coal to domestic wind and solar is also in line with the energy strategy of Turkey established on using local and renewable energy sources in electricity production. The feed-in tariff appears to have accelerated the energy transition recently by enabling it to reach 13% wind and solar share in power generation. However, now the country enters into a new era without generous subsidies. The fate of this new era will depend on Turkey’s level of ambition to curb its import bill.
