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Türkiye’s $8.7 billion in guaranteed payments to domestic coal power plants risks stalling the country’s green transition, even as solar energy now offers the lowest electricity generation cost, London-based energy think tank Ember said in its latest report.
The analysis suggested that if Türkiye were to redirect coal subsidies toward improving the electricity grid and removing bureaucratic hurdles for renewable projects, the country could meet its 2035 renewable capacity target of 120 gigawatts without compromising energy security.
Ember warned that the move could undermine Türkiye’s renewable energy transition and divert critical funds from grid modernization and solar expansion efforts, as the four-year purchase guarantee sets a price of $75 per megawatt-hour (MWh) for electricity generated from local coal.
The report highlights that the cost of producing electricity from solar energy has dropped by 69% over the past decade, while wind power installation costs have fallen by 40%. As a result, solar power now provides the cheapest source of electricity in Türkiye, with a generation cost of about $43 per MWh — less than half that of coal-fired power, which stands at $90 per MWh.
Despite this, the government’s guarantee offers coal producers a dollar-based purchase rate 12% higher than the current average market price and 36% above production costs. This incentive is notable given that the operational expenses of domestic coal plants are largely paid in Turkish lira, while the guaranteed payments are in U.S. dollars.
The total subsidy of $8.7 billion earmarked for coal-fired power over four years surpasses the $5.7 billion budget allocated for nationwide grid renewal over the next five years — a 53% difference. The report argued that prioritizing grid and renewable infrastructure would yield greater long-term benefits, helping Türkiye expand renewable generation while maintaining supply stability.
Energy analyst Caglar Celikoz, who authored the report, emphasized that channeling resources into modernizing Türkiye’s transmission network would unlock new capacity for wind and solar plants to connect to the grid.
He noted that investments in rooftop, floating, hybrid, and battery-integrated solar systems could accelerate Türkiye’s clean energy transition.
As of September, Türkiye’s solar power capacity reached 24 gigawatts across more than 35,000 plants, accounting for 12.4% of national electricity generation. The country also plans to add 28.9 gigawatts of storage-integrated solar capacity by 2035 to support its clean energy goals.
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