Turkey Renewable Energy Market, By Type (Hydroelectric Power, Wind Power, Bioenergy, Solar Energy, and Geothermal Energy) and End Use (Residential, Commercial, Industrial, and Others), By Region, Competition, Forecast and Opportunities, 2028

Market Overview

The Turkey Renewable Energy Market achieved a value of USD 11.36 Billion in 2022 and is poised for robust growth in the foreseeable future, with an expected Compound Annual Growth Rate (CAGR) of 13.26% through 2028. Renewable energy encompasses energy sources that naturally replenish themselves and remain sustainable over time. Unlike finite fossil fuels, renewable energy derives from abundant resources such as sunlight, wind, water, and organic matter. These sources harness the Earth's natural processes, converting them into usable power without depleting finite reserves or causing lasting environmental harm.

Solar energy involves capturing sunlight through photovoltaic cells or solar thermal systems to generate electricity or heat. Wind energy harnesses the kinetic energy of moving air via wind turbines, converting it into electrical power. Hydropower utilizes the gravitational force of flowing water to turn turbines and produce electricity. Biomass energy derives from organic materials such as wood, crop residues, and waste, which can be burned or converted into biofuels for energy production. Geothermal energy taps into the Earth's internal heat, using steam or hot water from underground to generate power.

Renewable energy technologies offer a multitude of benefits, including reduced greenhouse gas emissions, improved air quality, and decreased reliance on fossil fuels. As technology advances and economies of scale improve, renewable energy is becoming increasingly affordable and efficient, playing a pivotal role in the global transition toward a more sustainable and resilient energy future.

Key Market Drivers

Turkey's proactive efforts to develop its renewable energy market are influenced by a blend of factors that align with its economic, environmental, and energy security objectives. Here are some of the principal drivers shaping Turkey's renewable energy market

1. Energy Security and DiversificationTurkey's substantial dependence on imported fossil fuels has instigated a drive to diversify its energy sources and reduce reliance on external suppliers. The development of renewable energy enhances energy security and mitigates supply risks.

2. Abundant Renewable ResourcesTurkey boasts favorable natural conditions for various renewable energy sources, including solar, wind, hydroelectric, and geothermal. Its geographical location provides ample opportunities for harnessing clean energy.

3. Government Policies and IncentivesThe Turkish government has implemented supportive policies like feed-in tariffs, incentives, and investment guarantees to encourage private sector participation and attract both domestic and foreign investments in renewable energy projects.

4. Renewable Energy TargetsTurkey has set ambitious renewable energy targets to increase the share of renewables in its energy mix, acting as a driving force for investment and project development in the renewable sector.

5. Environmental Concerns and Climate CommitmentsAddressing environmental challenges and aligning with global climate goals motivate Turkey's transition to renewable energy. Reducing greenhouse gas emissions and minimizing environmental impact are critical considerations.

6. Economic Growth and Job CreationThe renewable energy sector contributes to economic growth by attracting investments, creating jobs, and stimulating local manufacturing of renewable energy components and equipment.

7. Rural Electrification and Energy AccessRenewable energy projects, such as small-scale solar installations and mini-grids, play a role in providing electricity to remote and rural areas, improving energy access and supporting socio-economic development.

8. Foreign Investment and PartnershipsTurkey has attracted foreign investment and established partnerships with international organizations to accelerate renewable energy development. These collaborations bring expertise, technology, and financing to the market.

9. Energy Market LiberalizationMarket reforms and liberalization efforts in Turkey's energy sector have created opportunities for private sector participation and competition, facilitating the growth of renewable energy projects.

10. Technology Advancements and Cost ReductionsAdvances in renewable energy technologies have led to cost reductions, making renewables more competitive with conventional energy sources. This encourages project development and increases overall efficiency.

11. Infrastructure Development and ModernizationInvestments in renewable energy contribute to modernizing energy infrastructure and enhancing grid stability, aligning with Turkey's overall development objectives.

12. Local Content RequirementsTo stimulate domestic industry growth, Turkey has launched local content requirements for renewable energy projects, encouraging the manufacturing and deployment of renewable energy technologies within the country.

Collectively, these drivers shape Turkey's renewable energy landscape and provide a compelling business case for the expansion and diversification of its energy sources.

Supportive policies and Regulations are Likely to Propel the Market

Turkey has implemented several supportive policies and regulations to promote the growth of its renewable energy market. These measures aim to attract investments, encourage renewable energy deployment, and contribute to the country's sustainability and energy security goals. Here are some key supportive policies and regulations in Turkey's renewable energy market

Feed-in Tariffs (FiTs) and Renewable Energy Support Mechanism (YEKDEM)

Renewable Portfolio Standard (RPS) and Renewable Energy Quotas

Licensing and Permitting Simplification

Incentives for Local Manufacturing and Content

Grid Connection Priority and Guarantees

Long-Term Power Purchase Agreements (PPAs)

Tax Exemptions and Incentives

Capacity Increase Auctions

Renewable Energy Resource Zones (YEKA)

Energy Efficiency and Conservation Measures

Investment Guarantees and Dispute Resolution

Support for Research and Development

Key Market Challenges

The renewable energy market in Turkey faces several challenges that can impact its growth and development. These challenges reflect a combination of technical, economic, regulatory, and market-related factors. Here are some of the key challenges faced by the renewable energy market in Turkey

Grid Integration and Infrastructure

Permitting and Bureaucratic Processes

Licensing and Land Availability

Financing and Investment

Bankability and Project Viability

Market and Price Uncertainty

Technological and Technical Expertise

Access to Information and Data

Dependency on Imported Equipment

Competitive Pricing with Fossil Fuels

Local Opposition and NIMBYism

Environmental Considerations

Transparency and Corruption

Market Design and Regulatory Framework

Segmental Insights

Solar Energy Insights

The Solar Energy segment established its dominance in the renewables energy market in 2022 and is projected to maintain the position throughout the forecast period. Turkey has experienced substantial growth in solar capacity over the years. Large-scale solar power plants, as well as smaller rooftop installations, have contributed to the expansion of solar energy generation. Turkey has implemented feed-in tariffs (FiTs) and premium incentives for solar energy projects, making them financially attractive to investors. These incentives provide stable revenue streams and encourage project development. The Turkish government has used competitive tender and auction mechanisms to allocate solar energy projects, ensuring transparent and cost-effective project development. Challenges related to grid integration and stability have been addressed through regulatory measures, ensuring that solar power can be efficiently integrated into the electricity grid. Efforts to raise public awareness and educate consumers about the benefits of solar energy have contributed to its increased adoption.

Residential Insights

The residential segment established its dominance in the renewable energy market in 2022 and is projected to maintain

Regional Insights

Central Anatolia is the most promising region for renewable energy development in Turkey. The region has abundant solar and wind resources, and the government has identified it as a priority region for renewable energy development. Also, Aegean Region holds the second-largest market share in renewable energy. The Aegean Region is a promising region for renewable energy development. The region has good solar and wind resources, and it is also home to a number of geothermal power plants.

Recent Developments

• In July 2022, the European Bank for Reconstruction and Development (EBRD) announced that it was investing USD 109 million in a renewable energy fund in Turkey. The fund will invest in solar and wind power projects in Turkey.
• In June 2022, the International Finance Corporation (IFC), a member of the World Bank Group, announced that it was investing USD 54.56 million in a renewable energy fund in Turkey. The fund will invest in solar and wind power projects in Turkey.
• In May 2022, the Turkish government announced that it was awarding contracts worth USD 1.09 billion for solar and wind power projects. These projects will be developed by a consortium of companies, including Engie, Siemens Gamesa, and ACWA Power.
• In April 2022, the Turkish government announced that it was setting up a USD 5.46 billion fund to invest in renewable energy projects. This fund will be managed by the Turkish Sovereign Wealth Fund.

Key Market Players

• IC Ictas Energy Investment Holding
• Statkraft Enerji A.Ş
• Poyry PLC
• Sanko Energy Group
• Axpo Turkey Enerji A.Ş.
• STEAG Solar Energy Solutions
• Kalyon Holding
• Enerjisa Enerji A.Ş
• GAMA Enerji