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Open Access Open Badges Original article

Impact of the Clean Development Mechanism on wind energy investments in Turkey

Murat Tunç and Ruhan Pak*

Author Affiliations

Systems Engineering Department, Engineering Faculty, Yeditepe University, Kayisdagi Cad, Istanbul, 34755, Turkey

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Energy, Sustainability and Society 2012, 2:20  doi:10.1186/2192-0567-2-20

Published: 15 October 2012



As carbon trading continues to be implemented on both a national and an international scale, it is becoming an important factor in renewable energy investment decisions. Turkey, with continuous growth of carbon dioxide emission and energy consumption since 2001, ratified the Kyoto Protocol in 2009 and began registration of projects with greenhouse gas reductions in 2010. In light of these developments, wind energy resources with a potential of 48,000 MW are among the most efficient and effective solutions for clean and sustainable energy in Turkey. The aim of our study is to reveal the importance of the Clean Development Mechanism (CDM) of the Kyoto Protocol on wind energy investment decisions.


A broad review of wind energy in Turkey is given, and then, a comprehensive feasibility study of a wind energy firm with a valuation model including Certified Emission Reduction (CER) prices is applied to a case study, the Mega Metallurgy Power. With a holistic and interdisciplinary system engineering approach, results are obtained using comprehensive analysis of technology, emission, and power generation of a wind energy firm linked to a valuation model.


This comprehensive model sets the investment decision-making criteria, the enterprise value comparison with total financing. Finally, a sensitivity analysis is run to show that the enterprise value is positively correlated with CER prices.


Based on these results, it is concluded that if the world's largest carbon offsetting program, the CDM, prevails after 2012, CER prices will have a positive impact on wind energy firm valuations and related investment decisions.

Wind energy; Clean development mechanism; Valuation