Impact of the Clean Development Mechanism on wind energy investments in Turkey
As carbon trading continues to be implemented on both a national and an international scale, it is becoming an important factor in renewable energy investment decisions. Turkey, with continuous growth of carbon dioxide emission and energy consumption since 2001, ratified the Kyoto Protocol in 2009 and began registration of projects with greenhouse gas reductions in 2010. In light of these developments, wind energy resources with a potential of 48,000 MW are among the most efficient and effective solutions for clean and sustainable energy in Turkey. The aim of our study is to reveal the importance of the Clean Development Mechanism (CDM) of the Kyoto Protocol on wind energy investment decisions.
A broad review of wind energy in Turkey is given, and then, a comprehensive feasibility study of a wind energy firm with a valuation model including Certified Emission Reduction (CER) prices is applied to a case study, the Mega Metallurgy Power. With a holistic and interdisciplinary system engineering approach, results are obtained using comprehensive analysis of technology, emission, and power generation of a wind energy firm linked to a valuation model.
This comprehensive model sets the investment decision-making criteria, the enterprise value comparison with total financing. Finally, a sensitivity analysis is run to show that the enterprise value is positively correlated with CER prices.
Based on these results, it is concluded that if the world's largest carbon offsetting program, the CDM, prevails after 2012, CER prices will have a positive impact on wind energy firm valuations and related investment decisions.
- United Nations framework convention on climate change.
- Hamilton, K, Sjardin, M (2009) Fortifying the foundation: state of the voluntary carbon markets 2009. Ecosystem marketplace and new carbon finance.
- Ambrosi, P, Kossoy, A (2010) State and trends of the carbon market 2010.
- 10-Year electricity production capacity projection of Turkey (2010–2019). Turkish Electricity Transmission Company Research Planning and Coordination.
- Yüksel, I (2010) Energy production and sustainable energy policies in Turkey. Renewable Energy 35: pp. 1469-1476 CrossRef
- Kühn, M A tailwind for sustainable technology. In: Bührke, T, Wengenmayr, R eds. (2008) Renewable Energy - Sustainable Concepts for the Future. Wiley-VCH, Weinheim
- Akova, I (2008) Renewable energy resources. Nobel Yayın Dagitim, Istanbul
- Akova, I (2011) Development potential of wind energy in Turkey.
- Çamdali, U, Parmaksizoğlu, C, Tunç, M (2006) Comparison of Turkey's electrical energy consumption and production with some European countries and optimization of future electrical power supply investments in Turkey. Energy Policy 34: pp. 50-59 CrossRef
- Fairley, P (2010) Wind turbines shed their gears.
- National inventories submissions 2010 (TUR-2010-2008-v1.2.xls/Table1s1). UN framework of climate change.
- Annual development of installed capacity and generation in Turkey.
- Sustainability report.
- National inventories submissions 2010 (TUR-2010-1990-v1.2.xls/Table1s1). UN framework of climate change.
- 32003L0087: EU directives 2003/87/EC and 96/61/EC.
- Carbon trading price rise predicted.
- Rosenbaum, J, Pearl, J (2009) Investment banking: valuation, leveraged buyouts, and mergers and acquisitions. John Wiley & Sons, Inc, Hoboken CrossRef
- Impact of the Clean Development Mechanism on wind energy investments in Turkey
- Open Access
- Available under Open Access This content is freely available online to anyone, anywhere at any time.
Energy, Sustainability and Society
- Online Date
- October 2012
- Online ISSN
- Additional Links
- Wind energy
- Clean development mechanism