Turkey on January 28 finalized tenders for 1,200 megawatts (MW) of wind power plants that are expected to attract $1.2 billion in investment, according to a senior energy official.

The tenders under the Renewable Energy Zone Auction (YEKA) mechanism cover five zones in northwestern Edirne and Kirklarli, as well as central Sivas provinces, and attracted 100 bids from 40 companies.

Minister of Energy and Natural Resources Alparslan Bayraktar said that demand was 18 times higher than the available allocations after the tenders.

The YEKA scheme was introduced in 2016 to make it easier to allocate land for investors, facilitate the deployment of large projects, and encourage domestic production of renewable energy technologies.

The new wind projects will be implemented with an investment of $1.2 billion, Bayraktar said.

According to the minister, they will produce 4.5 billion kWh of electricity annually, providing electricity to about 2 million households.

The new plants will prevent imports of 800 million cubic meters of natural gas per year. This means savings of $400 million a year and $8 billion over the next two decades, Bayraktar said.

In 2024, the government released an update to the YEKA model to attract more investor interest. The main improvements include simplifying post-tender procedures for obtaining permits and introducing financial incentives, such as exemptions from transmission fees.

The companies will pay a total of $120 million to the government, or an average of $100,000 per megawatt, through the Renewable Energy Support Mechanism (YEKDEM) within one month of signing the contract.

The updated YEKA scheme provides for a minimum price and long-term power purchase guarantees, which Bayraktar says will make it easier to finance investments.

The companies that win the tenders will be guaranteed a 49-year grid connection, a minimum price during the six-year open market sales period, and a guaranteed price of 3.5 cents per kWh for the next 20 years.

«We will be buying this electricity at almost half the current market price for 20 years, and we will reflect this cheap energy to our citizens,” Bayraktar said.

He said that the focus is not only on energy production from renewable sources.

“At the same time, we have created a new model that ensures that the equipment to be used is manufactured in Turkey, which promotes employment, production, and exports and reduces the current account deficit,” Bayraktar said. “We have realized an example of this model today.”

According to the minister, thanks to the support of local production of machinery, the number of manufacturers has increased from 27 to 500. This has provided employment for 50,000 people, he added.

Turkey has limited oil and natural gas resources, making it a major energy importer vulnerable to fluctuations in energy markets.

Since 2005, it has been encouraging private sector investment in renewable power plants to reduce high import costs and protect against geopolitical risks.

Although electricity consumption in Turkey has tripled over the past two decades, it is expected to grow even faster in the coming years. This is due to the long-term energy transformation, which involves replacing fossil fuel energy with electricity.

“While we are working to meet this growing demand, we are also taking steps to reduce our dependence on external sources,” said Bayraktar.

Turkey boasts 33,000 MW of installed wind and solar power capacity. It plans to increase this figure to 120,000 MW by 20235, in line with the government’s goals.

“To achieve this goal, we are developing storage capacity allocation as well as self-consumption projects for our industrialists and traders. In addition, we continue to implement the YEKA model to enable domestic and foreign investors to develop larger-scale projects,” Bayraktar added.

Next week, tenders will be held for 800 megawatts of solar power plants, which is expected to bring in about $600 million in investment.

“Our goal is to organize YEKA auctions for 2,000-2,500 megawatts every year, and thus reach our goal of 120,000 megawatts,” Bayraktar said.

About 5850 MW of solar and wind energy has been produced under the YEKA project to date. Some of the YEKA projects have been canceled, some have been completed, and some are under investment.