Estimating the cost of capital for wind energy investments in Turkey

Simone Tagliapietra, Georg Zachmann and Gustav Fredriksson

Energy Policy, 2019, vol. 131, issue C, 295-301

Abstract: Wind power represents a key component of Turkey's energy strategy. Increased investment will be required to meet Turkey's wind power target and, as such, there is a need to understand the viability of wind power projects there. The cost of capital is a crucial element in wind power investment decisions owing to the high capital intensity of wind power plants. A reduction in the cost of capital through support policies can lower overall project costs and increase investment. We estimate the cost of capital for wind power projects in Turkey using data on 138 installations that participated in the Turkish feed-in tariff scheme in 2017. Our estimates indicate an upper bound of 12% for the cost of capital. This suggests the cost of capital for wind power projects in Turkey is not higher than in south-eastern European Union countries. However, because of adverse macroeconomic conditions, the cost of Turkey's main renewable support scheme increased by 46% between 2016 and 2017 in Turkish lira terms. We argue that continued commitment to the current support schemes by the Turkish authorities is crucial for the development of the Turkish wind power sector.

Keywords: Wind power; Turkey; Cost of capital; Renewable energy (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421519303076
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Estimating the cost of capital for wind energy investments in Turkey (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:131:y:2019:i:c:p:295-301

DOI: 10.1016/j.enpol.2019.05.011

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().