Towards a higher share of distributed generation in Turkey

In 2006, there is 8.5% distributed generation (DG) in Turkey which are generation units connected to the low and medium voltage distribution network. Out of this, 56% is industrial combined heat and power production (CHP) and 20% are renewables (RES-E), mainly runoff small scale hydro. Various technical and economical barriers have kept the DG share relatively low. This paper assesses how Turkey could increase the DG share. The methodology employed in this paper consist of a survey of the literature and legislation, combined with interviews with regulators, transmission and distribution system operators. Scenarios for DG are developed, barriers to increase the DG share are identified, DG and central generation (CG) are compared economically and regulatory measures are identified. The addition of long-run marginal transmission costs to the investment cost of new power generation units could close the long-run marginal cost difference between DG and CG. However, the share of DG is likely to stay low unless regulatory measures are taken. Moreover, a specific policy and regulation on DG is needed, the distribution grid needs strengthening, local dispatch centres need to become active and RES-E limits are needed for Turkey.