- Incentives for Waste-To-Energy Plants in Turkey
- November 18, 2013
- Law Firm: HERDEM Attorneys At Law - Istanbul Office
Accordingly, some price and tariff incentives and simplifications regarding facility location are stipulated.
As is known, waste-to-energy is an incineration process in which solid waste is converted into thermal energy to generate steam that drives turbines for electricity generators. In other words, renewable energy plants burn household and similar waste that remains after waste prevention and recycling and no additional fuel is needed to maintain the combustion process. Waste-to-Energy is also a hygienic method of treating waste and reducing its volume by about 90%.
Waste-To-Energy Plants in General
Biomass basically identifies resources obtained from agricultural and forestry products including vegetable oil wastes, agricultural harvesting wastes as well as from organic wastes, and from the by-products formed after their processing. Every year almost 250-400 kg waste is produced by humans and these wastes are accumulating at landfills. Following the accumulation of the wastes, chemical and bacterial processes start accordingly. Organic wastes fragmentize itself and cause methane gas release which is actually a biogas. That biogas is the resource of waste to energy plants to convert electricity.
Waste to energy plants which built on a landfill; generally start with coverage of the waste and biogas occurs after 3 months of aerobic decomposition following the coverage. In order to collect the biogas, wells should be set on landfill for the transmitting of biogas to refinement unit. After the refinement process, biogas shall become ready for combustion and electrical energy can be produced by generators. However, waste to energy plants in general may differ from plants on landfill in some processes. After waste is taken on to refinement place it divides into organic and non organic wastes. Organic wastes are left in decomposing tanks to produce methane gas. Non organic wastes are burn and releases syngas which can also provide electricity during the combustion process. Furthermore, the heat that occurs during the combustion process is started to use to gain greenhouse effect for growing tomatoes and strawberries.
Several renewable energy plants are recently activated in Turkey especially; foreign direct investors from Switzerland and Germany have renewable energy plants in Adana, Ankara and Antalya. In Ankara, 4000 metric ton of waste is produced on daily basis, which provides 17 megawatt electricity per year. In Adana it is 500 metric ton. For the purpose of doing that the legal entity should hold "Renewable Energy Resource Certificate" (RES Certificate) which shall be granted by Energy Market Regulatory Authority (EMRA) for the purpose of identification and monitoring of the resource type in purchasing and sale of the electrical energy generated from renewable energy resources in the domestic and international markets.
Pricing Incentives on Waste-to-Energy: RES Support Mechanism
The Law provides feed-in tariffs to the waste to energy plants and under the context of the law the figures applicable to waste to energy plants, which are generally for biomass plants including landfill gases and pricing tariffs will be 13.3 US dollar cents per kWh. Those prices shall be applicable for a period of ten years for production licenses subject to the Renewable Energy Resources (RES) Support Mechanism that are or will be commissioned as from 18/5/2005 until 31/12/2015. However, in line with other developments with the foremost being the supply security, the amount, price and times and resources shall be determined by the Council of Ministers, provided that they do not exceed the prices for RES certified production facilities that will be commissioned after 31/12/2015.
The Law provides that suppliers of electricity must pay into a pool that the Market Financial Reconciliation Centre (MFRC) manages. The MFRC shall announce the RES total amount for each invoice period and determine the payment obligation rate of each supplier. The amount that each supplier providing consumers electrical energy is obliged to pay its calculated and invoiced amount and the collections made are paid pro rata to the entities that are subject to the RES Support Mechanism. The annual production amount is affixed on the licenses of facilities producing electrical energy from RES which is the maximum annual amount that such facilities can produce with their existing installed capacity and with their resources. Entities generating electrical energy from RES are allowed to make sales in the market within the scope of their licenses. In the event that real person and entities generating electrical energy from RES shall export their surplus productions to the distribution system, they can benefit from the prices stated on the Law for a term of ten years. To this end, the electrical energy given to the distribution system must be purchased by the relevant distribution company holding the retail sales license. Electrical energy purchased by relevant companies shall be deemed to be produced and given to the system by the said distribution companies within the scope of the RES Support Mechanism.
The support mechanism is extended to the use of domestic products for entities. In the event that, the mechanical and/or electro-mechanical equipment used in the production facilities of license holder entities based on the RES are manufactured domestically; additional prices shall be added to feed-in tariffs of 13.3 USD, for a term of five years as from the commissioning of the production facility for electrical energy produced and given in such facilities and given to the distribution system. The prices added generally are for fluid bed steam tank 0,8 (US Dollar cent/kWh) liquid or gas fuel steam tank 0,4; gasification and gas cleaning group 0,6; steam or gas turbine 2,0; internal combustion engine or Stirling engine 0,9; generator and power electronics 0,5; cogeneration system 0,4. Entities licensed to produce electrical energy from RES may install additional capacities provided that they do not go beyond the areas specified in their licenses and they do not exceed the installed capacity specified in the licenses of the capacity given to the system during operation.
In addition, under the terms of RES Support Mechanism, entities establishing an isolated or grid connected power plant with a maximum installed capacity of 1.000 kW for meeting solely their own needs, shall not pay service fees for these projects whose final project planning, master-plan, pre-reviews or first studies have been prepared by DSI or EIE. Investments in relation to;
- Establishing energy generation facilities;
- Provision of domestically manufactured electromechanical systems;
- Research and development facilities for the generation of electric energy or fuel by utilizing biomass sources; shall be eligible for incentives, based on a resolution determined by the Council of Ministers.
Among the real estate with the nature of forest or under the private ownership of the Treasury or under the disposal of the state in its entirety, those which shall be utilized for the purposes of the facility, roads for transportation and energy transmission lines up to the grid connection point, a permission shall be granted, lease, easement right could be established or a utilization permit could be granted by the Ministry of Environment and Forestry or the Ministry of Finance in exchange of a remuneration. Permission, lease, easement and usufruct permission fees shall be 85% discounted during the initial ten years of investment and operation of power transmission lines including those under operation as of the date of publication hereof, for production facilities based on RES, transportation roads and including those to be transferred to the TEIAS and distribution companies until the point of connection to the system specified in their licenses.
Analysis of the Incentives and RES
As it is previously mentioned, waste-to-energy plants help to avoid the methane, a very potent greenhouse gas which would have been created if the waste was land filled, by treating household and similar waste.
In Kemerburgaz, Istanbul renewable energy plant is built for 6 million USD, which produces 4 megawatt electricity per month. With this plant it is possible to provide electricity in Istanbul to 20 thousand residences for a period of 15 years. By evaluating this outcome, it is eligible to produce 500-600 megawatt electricity on annual basis by using waste to energy plants considering the amount of waste production in Turkey, which reaches 70000 metric ton daily. That amount is basically 2,5% of total electricity consumption in Turkey totally. This system can provide electricity for 500 thousand residents when it is run in full capacity. Considering current situation of Turkey’s energy needs, waste to energy can provide 5% reduction of natural gas imports essentially.
Because of the fact that waste to energy is very advantageous, the government uses its way of incentives by awaken investor’s interest on renewable energy plants. RES support Mechanism provides efficient off take guarantee for renewable energy generators that involves in the system since it guarantee the purchase of that generator's electricity by the suppliers. Moreover, these incentives shall be applicable to all suppliers which include retailers, wholesalers and generators. This way of incentives, which enables consumers choosing to buy electricity from sources other than retailers, will not ease the effectiveness of the off take guarantee provided by the law.
 Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy Article. 5
 Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy Article.6
 Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy Article. 7