Turkcell ploughs $240 million into solar energy

Turkcell is investing US$240 million in solar energy production as part of an effort to use solely renewable energy by 2030.

The Turkish telco revealed that it is planning to install solar power plants with a total installed capacity of 300 megawatts, purely for its own consumption – nothing will go back to the grid – within three years. As it stands, state-owned electricity transmission company the Türkiye Elektrik İletim and the relevant regional electricity distribution companies have authorised it for up to 213 MW, but it is working towards obtaining permits for the full capacity.

The solar plants should help Turkcell hit its interim target of drawing around 65% of its electricity from renewable sources in 2026.

“Considering the current economic and macro indicators, the investment amount for the respective energy projects is expected to be around $240 million,” the operator said, in a statement.

The wording of the statement suggests that that figure refers to the new solar power plants only, but Turkcell also outlined a number of other renewable energy initiatives it is undertaking which might draw cash from the same pot.

With that goal of 100% renewable energy by the end of the decade in mind, and a commitment to become carbon neutral by 2050, the operator has already rolled out some solar energy projects to power – or part-power – its data centres and offices and in 2021 it acquired Boyut Grup Enerji, owner of the Karadağ Wind Power Plant, with 18 MW of installed capacity; the deal valued Boyut Grup Enerji at US$29.6 million, but factoring in debt, Turkcell agreed to pay $11.5 million.

In addition, to date it has integrated solar panels into around 735 base stations, although it did not comment on the extent to which the panels actually power the sites in question.

Nonetheless, like its international peers, Turkcell is really starting to push the sustainability agenda. Others are further ahead though.

In mid-2021 Vodafone famously announced that its entire European network is now powered by renewable energy and pledged to extend that feat to its African operations by 2025. It has made numerous energy-efficiency announcements since then, including last month’s power purchase agreement with renewable energy firm Iberdrola, which added the telco’s operations in Portugal and Spain to an existing deal in Germany for the provision of solar energy.

Vodafone aims to be net zero by 2030 in terms of its own carbon emissions and from energy it buys and uses – that’s scopes one and two – and says it will have eliminated scope three emissions, from the whole supply chain, by 2040. Last week its UK business claimed to have reduced carbon emissions from its own operations by 92% in the 2020-2023 period.

Comparisons with Vodafone are perhaps a little unfair, since the UK-based group is pushing especially hard on sustainability. But it’s important to note that while Turkcell is clearly making great efforts in this area, it is hardly in the vanguard when it comes to renewables.

Turkcell did not share figures on its energy usage when it published its second quarter results last week, but it’s safe to say that the rising cost of power is affecting its business as much as it is that of other telecoms players. Be that as it may, the operator turned in a solid set of numbers though.

The telco raised its full-year guidance for revenue and earnings by a fair amount on the back of a strong performance in the first half of the year. It now expects revenues to grow by around 71% year-on-year, having previously guided for 55%-57% as recently as March this year, while it predicts EBITDA will come in at around 37 billion lira (US$1.4 billion), ahead of its earlier TRY34 billion estimate.

In Q2 it posted a 73.5% revenue hike to TRY21.7 billion ($795 million), while earnings grew by more than 89% to TRY9.5 billion and net income rose by 70% to TRY3.2 billion.

“Our performance in the quarter improved due to the expansion of our subscriber base, the cumulative impact of sequential price increases, our focus on upsell to higher packages for our customers, and the contribution of our digital services and techfin business,” said Turkcell CEO Murat Erkan.

With business booming, this is surely a good time for Turkcell to spend on sustainability.

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