
Breadcrumbs
Turkey: Wind and solar saved $7 bn in 12 months
As fossil gas prices skyrocketed globally, Turkish electricity prices took off. Wind and solar have already saved Turkey billions of dollars on fossil fuel imports, but they could do more with the right policy.
Available in: Türkçe
Highlights
x5.9
The rise in monthly wholesale electricity price in a year
x7.4
The rise in gas price for power generation in a year
$7 bn
The gas imports replaced by wind and solar generation in a year
About
Ember’s analysis reveals that the recent surge in electricity prices in Turkey has been led by globally high gas prices, with wind and solar power generation lowering electricity bills by replacing fossil gas imports. Accelerating wind and solar power in an effort to lower electricity bills will require a significant expansion in auctions and reserved capacities for wind and solar, and removal of the obstacles against the free market disrupting new investments.
Executive summary
Key findings
Ufuk Alparslan Electricity & Climate Data Analyst, Ember
Gas prices and the weak currency lead to high electricity prices in Turkey, while renewables prevent billions of dollars of fossil fuel imports. Renewable energy could do more with the right policy. After the end of feed-in tariff, the free market and the auctions will be the main routes towards new renewable deployments in Turkey. However, the capacities reserved for wind and solar power need to be scaled up dramatically and the market interventions damaging the investment appetite in the country should be avoided. The energy crisis needs quick solutions, like solar power, which can be deployed very fast.

Power prices on the rise
Fossil gas prices led to high electricity prices
Like many countries, Turkey has recently suffered from soaring electricity prices. The monthly wholesale power price has risen by almost sixfold in a year, with fossil fuel prices playing a significant role.
Turkey is vulnerable to changes in gas prices, as the country generated almost one third of its electricity from gas last year. Its annual gas consumption set a new record in 2021, 45% of which was imported from Russia. Dependency on fossil gas raised the country’s import bills and caused the Central Bank of Turkey to sell a record amount of US dollars to the state owned gas importer BOTAŞ.
Rising global fossil gas prices last year were driven by a mix of supply-and-demand driven reasons, together with geopolitical disputes. This year, the Russian invasion into Ukraine exacerbated the gas crisis even further. With prices soaring across the world, Turkey is intervening in the market to limit the rising cost of electricity.
Renewables to lower bills
Wind and solar saved 7 billion dollars in the last 12 months
While fossil fuel prices are on the rise, wind and solar power generation helped to dramatically reduce fossil fuel imports. Without wind and solar, electricity bills would have been even higher.
Wind power plants, with their 32.2 TWh generation between May 2021 – April 2022, own the lion’s share in the import savings with 5 billion USD. Solar power plants account for 2 billion USD import savings, with 86% of that from unlicensed solar power plants.
The Russian invasion of Ukraine deepened the fossil fuel crisis across the world, keeping prices high, with correspondingly painful fossil gas import bills for Turkey. Between the beginning of the war on 24th February and the end of April, 2 billion USD of potential fossil fuel imports were replaced by wind and solar power generation in Turkey. As long as the escalation continues, the contribution from wind and solar power in lowering these bills will continue rising at the same speed. We expect roughly 700 million USD savings in gas imports thanks to wind and solar generation every month, if the price of gas remains at these levels.
Market interventions to lower prices
Turkey's market interventions do not lower the costs
Interventions in both retail and wholesale energy markets help to some extent, but do not lower the cost of electricity generation and the total cost burden on the country
Renewables in the feed-in tariff scheme and unlicensed power plants are exempted from the newly introduced price caps. Hence the renewables capacity subject to the new design is slightly higher than 5 GW— mostly hydro (3.2 GW) and wind (1.8 GW), and not including any licensed solar power plants.
In six months, which is the initial planned duration of new market design, an estimated 6 TWh of wind power generation will be affected by the new price cap. Estimated revenue collected from wind power in that time frame is slightly less than 300 million USD, using April’s parameters. A drastic change in the market design only for monthly 50 million USD saving may not be the best solution to rising bills.
The way forward
Tapping into wind and solar potential
Accelerating wind and solar power in an effort to lower electricity bills would need a rise in wind and solar capacities and removal of obstacles disrupting new investments.
The energy crisis needs quick solutions. Solar panels especially can be deployed quickly and play a key role in the fight against the rising fossil fuel prices and high electricity bills. Turkey has the highest solar panel manufacturing capacity in Europe with 8 GW annual capacity. However, Turkey adds less than 1 GW solar power plants every year. By fully utilizing its domestic solar panel manufacturing capacity, Turkey can reduce the electricity bills further by replacing costly fossil fuel imports.
Supporting Material
Methodology
Gas import savings by wind and solar power generation
Continuous day ahead TTF prices were first converted into USD/MWh from EUR/MWh by using Central Bank of Turkey’s EUR/USD daily forex rates. Then these prices were used to calculate the generation cost of a gas-fired power plant with 55% efficiency. The generation cost is then multiplied by the wind and solar generations of that period.
Windfall tax estimation to be collected from the wind power plants
The wind power plants that completed the ten year term to participate in the feed-in tariff scheme were filtered out of the energy regulator’s annual lists of feed-in tariff participants. Half of their annual generations (to find their expected six monthly generation) mentioned on these official lists were multiplied by the difference between average monthly April power market price and the price cap applied to renewables.