The encyclopedia · Strategy & Leadership · Strategic decision · 2017–2023
Turkey's YEKA auction bundled a 1 GW solar plant with a local module factory
Kalyon-Hanwha won Turkey's 1GW solar tender at $0.0699/kWh and had to build a 500MW module factory with local content and R&D.
Turkish Ministry of Energy and Natural Resources · Kalyon Enerji · Hanwha Q Cells
The solution
Turkey's solar boom was an import boom: panels came from Asia, leaving little manufacturing or engineering value at home. The energy ministry wanted the country's first large-scale solar plant to build an industry, not just generate power.
The YEKA-1 tender for 1,000MW in Karapınar was run as a reverse auction with a $0.08/kWh ceiling. The winning consortium also had to build a 500MW module factory within 21 months, use 60–70% local content, staff 80% of engineering jobs with locals, and maintain R&D for ten years.
Four consortia bid through 18 rounds; Kalyon Enerji and Hanwha Q Cells won at $0.0699/kWh, with a 15-year power purchase guarantee without currency risk — a record-low tariff at the time and a project expected to power about 600,000 homes.
Why it worked
- Bidders competed on price for the plant while the factory obligation was non-negotiable
- The 15-year guaranteed tariff made the bundled factory bankable
- Local-content and R&D clauses built skills, not just megawatts
- One auction replaced years of scattered incentives with a single contract
What can be applied
A procurement auction can buy two things at once: the price-clearing bid can carry industrial policy if the obligation is in the auction's terms.
Aftermath
The factory proved harder than the power plant: Hanwha Q Cells left the partnership in 2019 and the government extended deadlines, eventually committing TRL1.99bn (about $333m) in 'super incentives' to get the 500MW fab built. The Karapınar plant itself became one of Turkey's largest solar farms, and later YEKA tenders repeated the plant-plus-factory formula.
Sources
- Kalyon-Hanwha Co. to build Turkey's biggest solar plant
- Turkey's 1 GW Konya solar PV tender concludes at $0.0699 per kWh
- Big money for Turkey's 500 MW solar factory
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