Wind & Solar Overtook Domestic Coal in Türkiye—But a $8.7B Coal Subsidy Pulls the Other Way

Context: 2024 marked a structural shift in Türkiye’s power mix

Recent reports shows a decisive turn: in 2024, wind and solar permanently overtook domestic coal, exceeding coal’s historic annual peak.

The underlying momentum was solar. Solar generation jumped 39% year-on-year, lifting wind+solar’s share to over 18% of total electricity. In absolute terms, wind+solar reached 62 TWh, outpacing 47 TWh from domestic coal and beating the 53 TWh domestic coal record set in 2019—evidence this is not a one-off.

A second, important nuance: 61% of coal-fired generation relied on imported coal in 2024, underscoring how local demand growth has been increasingly backfilled by fossil imports rather than domestic lignite.

The policy contradiction: a USD-denominated coal subsidy amid cheaper solar

A purchase guarantee above market levels

According to the analysis, Türkiye plans a USD-denominated purchase guarantee of $75/MWh for 60% of domestic-coal generation until 2030, set ~12% above the past year’s average sales price.

Scale and opportunity cost

Across the 2026–2030 incentive window, $8.7 billion would be paid to domestic-coal plants—53% more than Türkiye’s entire five-year grid renewal budget—raising the question of whether resources would be better directed to grid readiness for renewables.

Cost curves favor wind & solar

Over the last decade, installation costs fell 77% for solar and 40% for wind in Türkiye, driving the LCOE of new solar to $43/MWh (–69%), now the cheapest generation source. A new domestic-coal plant would deliver power at ~$90/MWh—more than twice new solar.

Auctions signal the price gap

Recent YEKA (the abbreviation for areas designated by the Ministry of Energy and Natural Resources as areas for the use of renewable energy sources) auctions set purchase guarantees for wind and solar at less than half the domestic-coal incentive, with developers also paying $220M in total contributions—another market signal that low-cost renewables can stand on their own.

Grid readiness, hybridization and storage: what the data says

Connection capacity is the bottleneck

Türkiye’s 2035 roadmap envisions HVDC lines, +90,000 km of new grids and 942 new substations: critical to unlock new wind and solar connection capacity.

Rooftops, hybrids and floating PV can accelerate build-out

• Rooftops: Potential exceeds 120 GW, with a solar target of 76.9 GW by 2035. Meeting it requires ~5.2–5.3 GW/year of new solar—consistent with the country’s recent cadence.
• Hybrids: Solar-as-auxiliary capacity exceeded 1 GW by end-2024; adding solar at existing wind/hydro sites optimizes scarce interconnection without waiting for new grid build.
• Storage-integrated projects: Türkiye has a 33.1 GW pipeline of wind/solar with storage—valuable for frequency/voltage balancing—but deployment is hampered by maximum price policy constraints.
  

Hydropower flexibility

With ~24 GW of dammed hydro, Türkiye can use hydro like a battery, time-shifting generation to complement variable wind and solar while pumped-storage options expand flexibility.

What this means for technical teams operating wind & solar fleets

The data points to rapid renewable growth, but also to grid and operational complexity as portfolios diversify. Technical teams can get ahead by doubling down on high-fidelity monitoring, analytics and reliability practice.

From monitoring to action

• Real-time monitoring across wind, solar and hydro assets to surface anomalies and performance deviations quickly.
• Data Studio & KPI analytics to correlate drivers (e.g., irradiation, wind profile, temperature) with underperformance, supporting root-cause analysis.
• Event & alarm management (aligned with EEMUA 191, ISA 18.2, IEC/BS 62682) to triage occurrences, external limitations and service orders in a unified view.
• Reliability metrics (MTTF/MTTR/MTBF) and failure prediction to transition from reactive to predictive maintenance as fleets scale.
• Energy-loss quantification and forecasting to prioritize corrective actions and align with grid constraints.
  

Align capital with the new reality

Türkiye’s power market is now defined by a clear paradox—and a clear path. On the one hand, 2024 marked a structural break: wind and solar permanently overtook domestic coal, even surpassing coal’s historic peak, while a majority of coal generation relied on imports. At the same time, official 2035 targets envisage wind and solar providing roughly half of electricity and fossil generation falling below one-fifth—an ambition that is coherent with the observed trend. Yet the announced $75/MWh USD purchase guarantee for 60% of domestic-coal output through 2030 would channel $8.7 billion—53% more than the five-year grid renewal budget—into a technology that the system is already outgrowing.

Economics sharpen the contradiction. New utility-scale solar sits at an LCOE near $43/MWh, while a replacement-scale domestic coal plant would be about $90/MWh—more than 2× solar. Recent YEKA auctions reinforced the price signal, with purchase guarantees for wind and solar at less than half the coal incentive and developers paying $220 million for awarded capacity. In short: policy is pushing against both market prices and system needs.

The solution space is practical and near-term. Türkiye’s roadmap already points to the right bottleneck—connection capacity—and specifies HVDC lines, ~90,000 km of new grids and 942 new substations. Meanwhile, proven accelerators can deliver energy and flexibility before all grid works complete: rooftop solar (potential >120 GW) to help reach the 76.9 GW by 2035 target (~5.3 GW/year needed), hybrid solar at existing plants (already >1 GW auxiliary capacity), and a 33.1 GW pipeline of storage-integrated wind/solar—if market rules stop holding these assets back. Finally, ~24 GW of dammed hydro can operate like a “battery,” time-shifting generation to complement variable renewables.

For technical teams, the implication is to execute as if the transition were already here: design portfolios for higher renewable penetration, tighter grid constraints, and faster operational cycles. That means rigorous real-time monitoring, flexible data exploration, disciplined alarm/event management, and reliability, prediction and forecasting workflows to convert targets into dependable MWh. 

Bottom line

‍ Türkiye’s system is already tilting toward wind and solar; aligning capital and market design—by prioritizing grids, rooftops, hybrids and storage over coal subsidies—would lock in that trajectory at the lowest system cost while improving security and reducing import exposure.