Türkiye's $8.7bn in guaranteed payments to domestic coal power plants could impede the country's transition to green energy, according to a report by London-based energy think tank Ember.

Ember proposes that by reallocating coal subsidies to enhance the electricity grid and streamlining bureaucratic processes for renewable energy projects, Türkiye could successfully reach its goal of achieving a renewable energy capacity of 120GW by 2035. This approach would not jeopardise energy security.

The four-year purchase agreement establishes a fixed rate of $75 per megawatt-hour (MWh) for electricity produced using locally sourced coal.

The report notes that the cost of producing electricity from solar energy has dropped 69% since 2015, making it the cheapest source of electricity in Türkiye at $43 per MWh. In contrast, coal-fired power costs $90 per MWh.

Coal producers also benefit from a dollar-based purchase rate, even as their operational expenses are paid in Turkish lira.

The $8.7bn subsidy for coal over four years surpasses the budget for nationwide grid renewal up to 2030 by 53%.

The report states that prioritising grid and renewable infrastructure would yield greater long-term benefits, helping Türkiye expand renewable generation while maintaining supply stability.

It further noted that investments in rooftop, floating, hybrid and storage-integrated solar systems could accelerate Türkiye’s clean energy transition.

The report emphasised the importance of modernising the country’s grid to enable new capacity for wind and solar plants.

Caglar Celikoz, author of the report, stated, "Although Türkiye has made significant progress in electricity generation from solar energy, there is still a long way to go before the country can fully realise its potential."

“In a time when access to finance has become increasingly difficult, it is crucial for Türkiye to focus its resources and efforts not on supporting coal, but on removing bureaucratic barriers to renewable energy investments, strengthening grid infrastructure, and supporting new technologies. With these steps, Türkiye can meet its energy needs securely while also achieving its 2035 targets.”