Turkey aims to increase its 7,000MW current installed wind power to 20,000MW by 2023. The number of wind power plant and equipment investments in Turkey is increasing daily thanks to the policies implemented in order to achieve this goal. These investments are mostly clustered in Izmir, a city located on the west coast of the country, which acts as a logistics centre. The wind power equipment manufacturers making domestic market-oriented investments in Izmir are increasing their production capacities in the city along with the new demand from neighbouring countries in Eastern Europe and central Asia. New producers are also chasing opportunities to enter the Turkish market through Renewable Energy Resource Area (YEKA) tenders to increase the wind power investments in the country. With Izmir as a hub where wind-equipment manufacturers are clustered, as well as quality labour, production infrastructure and easy access to suppliers, Turkey is an advantageous location for investors.
A wise investment
Taking a major step towards improving the investment environment by going up 17 places on the World Bank Doing Business 2019 Index, Turkey offers major opportunities for investors in the field of wind energy. Turkey has a significant wind power potential with 48,000MW onshore and 18,000MW offshore capacity. While Turkey has transformed around 7,000MW of this potential into installed power through effective policies implemented in recent years, the country ranked fourth in Europe and eight overall in terms of most wind power plants going into operation in a year, with 766MW wind power plants in 2017.
To achieve the goal, Turkey regularly announces YEKA tenders and creates large-scale investment potentials ranging 250- 1,000MW. While Siemens-Gamesa was awarded the 2017 tender, four new 250MW capacity YEKA tenders were announced in November 2018. Applications will be received until March 2019. Turkey also plans on announcing tenders for offshore areas in the upcoming periods. Prioritising wind for energy production from renewable sources, Turkey also states wind power energy- equipment production as a priority investment area. Investors can benefit from exceptions and discounts on corporate tax, customs duty, VAT and social-security premium payments.
The production of wind power equipment in Turkey is mainly clustered around the second-largest trade centre in the country, Izmir, which has become a hub integrated with international value chains in wind energy, with advanced production facilities, logistic infrastructure and high-quality labour. Companies investing in Izmir can conduct exporting activities easily through the ports in the city, while also enjoying the benefits of the domestic market. Also hosting the first wind power plant in Turkey, established in 1998, Izmir was chosen as a production hub by international companies such as Enercon, Siemens-Gamesa, LM Wind Power and TPI Composites. In addition, a strong supply chain consisting of many local companies, such as Ates¸ Wind Power, Ege Towers, Dirinler Foundry and Tibetler Machinery, is established in Izmir.
There are four wind blade, one nacelle and three wind tower factories in Izmir, and the number of employees in the wind energy equipment sector exceeds 4,000. One in every 120 employees in the industrial sector is employed in the wind energy equipment production field. Izmir was named as one of the most competitive cities in Eastern Europe and Central Asia in the field of energy on the ‘world’s most competitive cities’ report published by site selection, one of the most prestigious publications for FDI.
While Izmir offers significant advantages for the wind power equipment manufacturers, Izmir Development Agency (IZKA) conducts effective activities for the improvement of this strategic sector. Invest in Izmir, operating within IZKA, provides consultancy and support in every step of the investment process free of charge.
