UK & Europe
Turkey has a significant potential for offshore wind and provides favorable conditions for solar, hydro and geothermal as well.
Our joint kick-off webinar on “Renewables in Turkey – Realising Potential and Mitigating Risks” took place on 6 May 2021 and was organized in collaboration between Clyde & Co and CETINKAYA with a line-up of speakers consisting of external speakers of the Turkish Energy Industry, Industry Associations and several colleagues from the energy and disputes teams of Clyde & Co and CETINKAYA.
The webinar started with an introduction by Georg Scherpf (Head of Arbitration Germany at Clyde & Co) and Orcun Cetinkaya (CETINKAYA). They moderated the webinar and introduced the distinguished speakers and the topics.
Batu Aksoy of Turcas Petrol A.Ş gave a keynote speech on the Energy Landscape in Turkey. He provided interesting insights on the energy transformation in Turkey from an operational, financial and legal perspective. In particular, he recommended to phase down the price subsidization of day ahead market and consecutively, of the end consumer tariff thanks to the state-owned companies such as EUAS and BOTAS, rather define long term targets for the development of the renewable sector to strengthen the incentives of the market mechanisms and provide easier access to financing for large scale energy projects.
In the following, Murat Durak of DÜRED (Turkish Offshore Wind Energy Association) provided further insights on Turkey’s Potential for Offshore Wind. He explained that both the Aegean Sea and the Marmara Sea have high potential for offshore capacity in Turkey. The most attractive areas for offshore wind lie in the northwest in the Aegean Sea where wind speeds rise to 9 m/s. In total, Turkey has an overall offshore wind potential of 75 GW. Murat Durak further elaborated that there are some important issues when it comes to the planning phase of offshore wind farms in Turkey such as: wind speed, territorial waters, tourism, military areas, civil aviation, maritime traffic, pipelines and underground cable routes.
Özgür Altintas of CETINKAYA gave an overview on the applicable legal framework for renewable energy in Turkey. She elaborated that Turkish law sets the main foundation for the designation and protection of the renewable energy resources (such as wind, solar, geothermal, hydraulic, biomass, wave, current and tidal – “YEK”), certification and subvention of electricity generated from renewable resources and the use of renewable resources.
She continued to give useful guidance on dealing with the competent Turkish authorities, i.e. the Ministry of Energy and Natural Resources (“MENR”), the Energy Affairs Directorate under the MENR and the Energy Market Regulatory Authority (“EMRA”). The relevant energy resource areas in Turkey (“YEKA”) are determined by the MENR on public/ treasury or private lands. Further, she elaborated on the mechanisms to incentivize renewable energy production in Turkey (“YEKDEM”).
Habib Babacan of Nordex Enerji A.Ş shared some of his experience from the Industry: The Turkish government recently declared a new incentive system on 30 January 2021. It includes feed-in tariffs in Turkish Lira, quarterly price adjustments and additional feed-in tariffs for the usage of local components. He particularly focused on explaining the investment cycle between 1998-2007 which raised awareness regarding renewable energy among energy professionals in Turkey. During this time, supporting regulations were introduced by the government.
Georg Scherpf started by providing insights on Clyde & Co’s capabilities in the power and renewables sector. Clyde & Co regularly advises on all issues that might arise during the project lifecycle of large-scale energy projects starting from the tendering phase, continuing with the execution/installation phase and litigation or arbitration. Further, he provided various insights on resolving disputes during and after the construction phase. Moreover, he explained that Turkey has signed over a hundred Bilateral Investment Treaties (“BITs”) of which 76 are currently in force. In case of non-compliance with necessary obligations to protect foreign investments, most treaties signed by Turkey allow the investor to file an arbitration directly against the host state before an international arbitral tribunal. Awards in favor of the investor can be enforced pursuant to the New York Convention or the ICSID Convention. In the last years, Europe has seen a large number of successful claims which invoked a breach of legitimate expectations of foreign energy investors resulting from a radical and unforeseeable change to the underlying legislation (e.g. a revocation of feed-in tariffs). Foreign investors ought to ensure that they are covered by existing protections under international law before investing abroad.
Anna-Sophie Waldmann and Dilara Kamphuis provided an overview on the different legal issues which might arise in offshore construction with a focus on force majeure due to COVID-19, liabilities and indemnities, warranties and passing of risk, risk allocation, variation procedure, scope of CAR insurance, claims handling as well as termination and suspension. They provided some viable options for project management teams to manage the different challenges that arise during the installation phase of an offshore wind farm and how to resolve disputes at an early stage or during the project itself.
The webinar ended with Volkan Öztürk of YILSAN Yatırım Holding A.Ş. giving some concluding remarks on “Renewables in Turkey in 10 years”. He explained that Turkey has the cheapest wind supply prices worldwide and that solar is a very important resource in Turkey with massive projects and forecasts of fastest growth in Turkey by 2025 – increasing by 208% to 16.9 GW in total. As of now, there are already some solar tenders ongoing such as mini solar YEKA competitions with a capacity of 1000 MW.