New targets, old challenges in Turkish wind and solar tenders

In 2016, Türkiye launched the Renewable Energy Resource Zone (YEKA) auctions to develop large-scale solar and wind projects, simplify the allocation of suitable lands, and encourage local manufacturing of renewable energy equipment. 

Through this model, the Ministry of Energy and Natural Resources (MENR) identifies suitable sites, announces them as candidate YEKA areas, and gathers views from relevant institutions to see if there are any obstacles to build a power plant. MENR then auctions these sites through a competitive bidding process based on the electricity sale price, offering long-term power purchase guarantees to attract investors and assist them in navigating permitting processes.

The first YEKA tender was held in 2017 with a 1 GW solar auction in Konya’s Karapınar district. Since then, a total of 5.8 GW has been tendered by the end of 2024, consisting of 3 GW of solar and 2.8 GW of wind capacity. The most recent tenders in early 2025 added 800 MW of solar and 1.2 GW of wind capacity, bringing the total tendered capacity to 7.8 GW. 

The new 2035 Renewable Energy Roadmap targets announced by MENR in October 2024 set an annual goal of 2 GW for YEKA tenders, with an additional 2 GW planned by the end of 2025. Türkiye also raised the wind and solar capacity targets from the National Energy Plan by 45%, aiming to nearly quadruple the current capacity from 32 GW to 120 GW by 2035. If MENR meets its goal of auctioning 1 GW each for solar and wind through YEKA tenders every year, these projects could contribute one-fifth of the required solar and one-third of the wind capacity targets.

Solar and wind capacity awarded under YEKA

The first YEKA tenders in 2017 included a requirement to establish manufacturing facilities in Türkiye and the employment of R&D personnel for the domestic production of components for solar and wind power plants. The solar panel production factory entered operation in 2020 and the Karapınar YEKA solar plant was fully completed by the end of 2023. On the other hand, the wind project was completely cancelled in May 2024.

Later, 1 GW solar capacity was announced for Hatay, Şanlıurfa and Niğde provinces. Called the Solar-2 auction, this was cancelled in 2019 before the competition date. This capacity was then announced again under the Solar-4 auction in 2022 and successfully tendered, this time with a provision allowing electricity generated from these projects to be sold on the free market for the first time.

For solar, a total capacity of 3.8 GW has been tendered between March 2017 when the first YEKA auction was held and February 2025 when the latest auction took place, of which 1.5 GW has been completed and 1.6 GW is under installation and 630 MW has been cancelled. For wind, out of 4 GW of tendered capacity, 319 MW has been installed, 2.5 GW is under development and 1.2 GW has been cancelled.

Offshore wind

Although Türkiye has a target of 5 GW of offshore wind capacity in 2035 and a total potential of 75 GW, the country has not yet built any offshore wind. 

In 2018, the first offshore wind auction was announced with 1.2 GW capacity for the Gelibolu, Saros, Kıyıköy areas,. However, due to insufficient technical measurement data, this received no bids. After this incident, in 2023 MENR announced candidate YEKA offshore wind zones in Çanakkale and Balıkesir provinces and has been carrying out projects aimed at collecting and analysing data in advance. The Ministry then plans to hold tenders in areas that prove feasible.

Barriers to YEKA

Although YEKA projects are an important step for large-scale wind and solar investments, the fact that only less than a quarter of the total capacity has been commissioned indicates that there are problems in the realization of the projects. YEKA projects have had a relatively modest impact on increasing installed capacity, contributing approximately 9% to solar and only 5% to wind power growth as of February 2025. If the entire tendered capacity were commissioned, these rates would rise to 18% for solar and 47% for wind, highlighting that the YEKA model has not fully realized its potential, especially in wind energy. 

A major bottleneck has been the excessive bureaucracy in permitting processes and the delays experienced during these procedures. Obtaining the necessary technical approvals, licenses for land use, environmental impact assessment, and building permits can take years, causing significant setbacks. These bureaucratic hurdles not only delay project timelines but also increase total projects costs, as investors are forced to bear additional expenses during the extended development phase.

Local production commitments imposed by YEKA tenders introduces another critical challenge. While these requirements aim to promote domestic manufacturing and reduce reliance on imports, they have placed additional financial and supply chain pressures on investors. Recent tenders have set high local content thresholds, with solar projects requiring at least 75% and wind projects requiring 55%. The number of factories capable of meeting the local production requirements is limited. This situation significantly narrows the options for winning bidders, effectively tying them to a select few companies. 

Additionally, macroeconomic factors such as currency fluctuations, inflation and rising interest rates have further complicated the financial environment for YEKA projects. These factors increase the cost of borrowing and make long-term financial planning more difficult.

Recent improvements and opportunities

At the end of 2024, Türkiye amended the YEKA regulation and project specifications to enhance investor appeal. This includes an exemption from transmission fees, battery storage up to the capacity and active support from MENR in securing approvals and permits. Also, through the “super permit” initiative, Türkiye aims to reduce the permitting process from four years to under two years. Additionally, following the contract between the bidders and the MENR, a free-market electricity sales period of 72 months for wind projects and 60 months for solar projects has been granted. In January 2025, the average free market price was $71 per MWh, approximately twice the auction price, serving as an incentive for investors to accelerate the implementation of their projects.

Additionally, tapping into Türkiye’s floating solar potential estimated at 53 GW, offers a substantial opportunity for growth within the YEKA model. A regulatory change in May 2024 further supports this potential by allowing the development of renewable energy facilities on seas, reservoirs and lakes. Under this amendment to the Coastal Law, these areas can be designated as YEKA zones and tendered for projects without a zoning plan.

Building on these opportunities and addressing past challenges, Türkiye has the potential to ensure the swiftest possible deployment of projects by shortening bureaucratic processes and permit timelines, offering flexible electricity sales options, and setting practical domestic production requirements. The 2025 YEKA auctions will be a key test for the revised model and could shape the future of Türkiye’s renewable energy landscape.

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Header photo

Solar panels on field for solar energy near Sanliurfa, Turkey

Credit: Ihsan Gercelman / Alamy Stock Photo