Escalated prices of YEKDEM FITs approach price cap

(Enerji IQ – Sept. 16, 2021) Turkey’s energy exchange EXIST announced the updated renewable energy supporting mechanism (YEKDEM) feed-in tariffs (FIT) that would be applied to renewable energy power plants that will start operation between July 1, 2021, and December 31, 2025. It was noteworthy that the FITs, which are escalated quarterly based on inflation and the currency basket, approached the price cap determined in $c/kWh for each resource.

According to Enerji IQ’s calculation, YEKDEM’s FITs for Q4 2021 are 15.7% below the price cap with the current exchange rate of 8.45 USD/TL. The base YEKDEM prices, published in the Official Gazette dated January 30, 2021, increased by 16.4% for Q4 2021 when escalated according to a formula. If the increases in the exchange rate and inflation continue, the prices will reach the ceiling price limit.

Turkey’s new TL-based renewable FITs, enacted by a Presidential Decree in January 2021, are escalated quarterly by a formula in which the share of the PPI and CPI is 52%, while the shares of the Dollar and Euro exchange rates are 48%. Ceiling prices varying between 5.10-8.60 $c/kWh are then applied to escalating prices.