【SMM Analysis: Turkey Signs Agreement on Its First GWh-Scale Energy Storage Power Station Project Scheduled for Operation in 2027 with Chinese Companies】

SMM News on February 23:

Recently, Turkey's Progresiva Energy Investments company signed an agreement with Harbin Electric International Engineering Co., Ltd. (HEI), a Chinese power plant equipment manufacturer, for the construction and financing of power storage facilities and wind farms.

Turkish Vice President Fuat Oktay said at a ceremony in Ankara that the project will include Europe's largest energy storage facility with a total investment of $600 million. Oktay said the initial phase of investment has reached $375 million. About $300 million will be obtained from China through Harbin's company, and the remaining part will be financed by Progresiva through equity financing.

The financial advisor for the agreement is OMG Capital Advisors, headquartered in Istanbul. According to a statement the company submitted to the public disclosure platform, HEI will be the main contractor for engineering, construction and procurement of the project. Kontrolmatik will be responsible for electrical engineering, while its subsidiary Pomega will serve as a subcontractor for battery procurement. The energy storage facility is located in Tekirdağ in northern Marmara region, which is known for its intensive industry and energy consumption. It is scheduled to be operational in 2025 and the wind farm will be operational in 2027. Ahmet Burak Dağlıoğlu, President of the Turkish Investment Office, also attended the investment signing ceremony. He said currently 55% of Turkey's power generation comes from renewable energy, with a target to increase this proportion to 65% by 2035.

Previously, Turkey announced a 30% tariff on imported lithium iron phosphate (LFP) batteries, and the increased import tariffs apply not only to batteries, but also to battery packs and battery energy storage systems. This is a very positive move for Turkey's domestic battery energy storage industry, and has also accelerated the pace at which Chinese companies build overseas capacity. On January 15, 2024, EVE Energy announced that its subsidiary EVE Power signed a memorandum of understanding with Aksa. The announcement shows that EVE Power and Aksa plan to jointly establish a joint venture company in Turkey, which aims to manufacture and market battery modules, outdoor cabinets, containers, and implement energy storage system projects in Turkey as the main contracting party for engineering.

Although there are not many battery energy storage systems deployed in Turkey at present, with the determination for energy transition, the demand for renewable energy construction and energy storage facilities is expected to continue in the long run. Against this backdrop, the overseas expansion progress of Chinese companies in 2024 may be further accelerated.