A consortium led by Siemens Gamesa Renewable Energy won the right to build 1 gigawatt of wind power in Turkey, outbidding competitors from China to the US in the country’s first wind power auction.
The group won with a low bid of 3.48 US cents a kilowatt-hour to sell electricity to Turkey’s government, according results distributed on Thursday at the auction in Ankara. Siemens Gamesa partnered with Turkey’s Turkerler and Kalyon at the auction, which needed 29 rounds to find a price.
“The aggressive bidding at 50% below the ceiling price shows that Siemens Gamesa really wanted to get into this market,” said Keegan Kruger, wind analyst at Bloomberg New Energy Finance. “This tender also shows there’s a shift in mentality among the turbine makers away from just being suppliers.”
Eight groups participated in the auction, which set out rules requiring the winning bidder to build a turbine factory in Turkey and agree to employ a mostly local workforce. Energy Minister Berat Albayrak estimated that development costs for the wind projects will be more than $1bn.
Capacity will be spread throughout Turkey. Before the auction, the government had selected seven regions for developers to choose from, including Eastern Thrace near Bulgaria, an area close to Ankara and the city of Sivas in central Turkey.
The participation of Siemens Gamesa, a Vizcya, Spain-based company majority owned by Germany’s Siemens, should improve ties with Berlin’s government, Energy Minister Berat Albayrak said after the tender, an apparent reference to months of diplomatic discord between Turkey and Europe’s biggest economy.
The win by a German firm is “really important in showing bilateral problems between the Turkish and German governments is not getting in the way of German business interests in Turkey,” Tim Ash, an emerging-market strategist at BlueBay Asset Management in London, said in an e-mailed note. “The Turkish government has been really keen to demonstrate this and re-assure German business.”