Two Turkish CCGTs Stop Work
Turkey's Enka has ended power generation at two of its three combined-cycle gas turbine (CCGT) power plants that were built in the late 1990s. It told the stock exchange that the shut-downs followed the expiry of the 20-year power purchase guarantees from the state.
The two plants are the 1.540-GW Gebze plant, and the 770-MW Adapazari plant, both in north west Turkey and supplying the country's main industrial and residential region. The Gebze plant operated at an average 78% capacity in 2016 and 2017, while the Adapazari plant operated at between 72%-74% capacity then.
Turkey's energy regulator EPDK renewed generating licences for both in November last year, with the new licences running for 49 years to 2068. However it seems unlikely that either will restart generation in the near future. Owners of CCGTs built without supply guarantees have long complained that newer, more efficient plant were losing market share to older less efficient plant with offtake guarantees.
More recently operators have seen their operating capacity fall to as low as 30% as a result of a combination of government pressure to reduce gas burn, to combat a soaring trade deficit, and overcapacity in the power generating sector.
Speaking to NGW recently one operator suggested older plant with offtake guarantees could hardly compete in the current tight market without their guarantees, and would be taken offline and either mothballed for future emergency use; or dismantled and sold overseas as cheap "off the peg" generating units.
The operator also suggested that the ending of the offtake guarantees for CCGT plant would offer only limited respite for other CCGT operators as there is a surplus generating capacity and CCGTs lose out to renewables plant, and to plant burning locally produced coal.
When it was elected to power in 2002, Turkey's governing AK party attempted to renegotiate the offtake guarantees awarded by previous administrations which it claimed were likely to affect plans to transition to a liberalised power market. However it was unsuccessful with operators of all plant, including eight CCGTs totalling 6 GW, preferring to keep the contracts they held. These all run for 20 years, plus incremental additions for short periods when either gas was unavailable or grid failures meant the plant had to come offline.
So far guarantees for three plants have ended, with those awarded to a third 1.520-GW plant belonging to Enka due to end in August and those held by another four plants totalling 1.908 GW due to end over the coming 18 months.