Glob.11 BuStn('\S Rcports where few of those that participated in the tender were able to successfully develop projects because of the framework that TEİAŞ had established to govern its bidding process. Though since 2007 the tender process for renewable projects has been restructured, again earlier this year TEİAŞ executed anothertenderwhich disconcerted investors, this time in solar. Gultekin Eranil, general manager of Boydak Energy, a recent participant in TEİAŞ' solar tender, which plans to expend near $1 billion by 2017 to build its portfolio of assets in generation, explained: "in calculating the final bid price for our projects, we realized that with our price the project stood at the borderline of our project feasibility according to our company assumptions and expectations. While we feel that we paid a relatively high amount for our project, there were many other participants that paid more, their bid prices for connection rights of 1 MW were as higher as cost of 1 MW PV Solar Power plant investment The critical question is, these projects can be realized within 2-3 years?" The effect of this has been to move investors to focus on unlicensed energy projects, which, though originally intended for cogeneration, have seen their desirability grow owing both to the ease with which they allow investors to enter into energy trading and their appeal as targets for license acquisition. Muzaffer Yosmaoğlu, former general manager of Koç Holding, one of Turkey's largest energy generators, and current CEO of BioConstruct, which has executed the country's largest investments in biomass energy projects, said: "Generation in Turkey can be divided into two categories of projects from a regulatory perspective; licensed and unlicensed projects. This latter categorywasorigi nally intended for cogeneration; there are no laws governing these unlicensed projects. They stand in a regulatory grey area. Our current problem is rooted in this. lmagine a farm that wishes to develop a 1000 kW power project, but only uses l/20th of this electricity for its own uses. Because it is connected to the grid, they are able to trade the remaining electricity they generate. Licensing is an onerous, time-consuming process - land must be rented, pre-licensing requirements must be met, and then these projects must undergo a public-bidding process, which, at least recently, has been characterized by exorbitant pricing. Unlicensed projects are not subject TURKEY POWER 201S I PRE-RELEASE to any of these conditions. Consequently, a situation has emerged whereby these projects, because they are subject to little governance, have become more attractive than larger scale licensed projects. An uneven competitive structure has emerged and, as a result, the original intent of these unlicensed projects -cogeneration - has been lost, and with it we have seen a great number of investors enter into the market either asa platform for establishing either energy trading businesses or later selling their license. 'This goes against the country's regulatory structure. Law 6446 bans license-trade. Through EMRA's failure to govern these unlicensed power projects, unlicensed power projects have now become so valuable that many project licenses are now being traded. This, of course, is not only unfair to those that undergo the process to receive project licenses but also directly goes against the country's regulatory framework.' "'"""�°' )..,., MITSU■ISHI -..vv INOUSTaıı:s. LTD. www.turboden.com Global Busıness Reports 1 e
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