Models of Solar Deployment: Decentralised Versus Centralised Generation

Abstract

This paper discusses the potential models for solar deployment in Turkey with a particular focus on the pros and cons of distributed versus centralised solar electricity generation. In the first part, the paper analyses the current state of the Turkish electricity market, demand and supply patterns and the expected future development and evaluates the role photovoltaics (PV) can take within this market. The large electricity consumption growth rate of Turkey requires opening up additional resources in order to continue to facilitate economic growth. With the set condition of the current feed-in tariff and the requirements for local content production, Turkey has started exploiting its PV potential comparably slowly despite its favourable preconditions of comparably high irradiation levels. To evaluate the economic attractiveness of solar, the second part of the paper compares the levelised cost of electricity (LCOE) of PV to current and expected future electricity prices and puts the Turkish situation in conjunction to other PV markets. Analysing the different key market segments from utility-scale ground-mounted solar parks to commercial and industrial rooftop applications to residential systems based on their individual role in distributed versus centralised PV power generation prepares the base for exploring how the combination of different systems allows to optimise the exploitation of Turkey’s solar potential. The question of distributed versus centralised generation requires also a look into the business models for the use of the generated solar electricity, which can be feeding into the grid to receive the benefits of the feed-in tariff, and independent power purchase agreements (PPAs), which are particularly interesting to industrial and commercial users, who have the (roof) space available but prefer concentrating on their core business to owning and operating a PV system themselves to own consumption and its requirements for balancing generation with demand, storage capabilities, or combination with other forms of electricity generation. Approach: comparing the Turkish PV market to other more development PV markets and analysing the Turkish energy system to develop a role model for solar adaption. Result of the work: solar is an attractive form of energy generation in Turkey even at low subsidy levels. It offers additional benefits to the Turkish society by reducing dependence on costly imported fossil fuels and allowing the development of a further industry segment in an industry with a long-term global growth perspective.