69% in four months
In December 2025 the monthly average PTF was 2,973 TL/MWh. Four months later, in April 2026, it was 921 TL/MWh. The same plant with the same output earned less than a third per MWh in spring than in winter. That volatility sums up the reality of every renewable plant selling into the market.
The investor’s question is whether to carry that risk. A merchant plant keeps all the upside but also bears all the downside. A structured offtake agreement passes some or all of that risk to a counterparty, for a price.
The right answer depends less on a market view than on the asset’s financing structure and its owner’s capacity to carry risk. Most of the costliest mistakes I have seen in more than twenty years came not from getting the price wrong but from trying to carry a risk that could not be carried.
How the market works in Türkiye
About 60% of wholesale power trading in Türkiye is done through bilateral contracts. Most of these, however, are short-term deals between generators and suppliers, often indexed to PTF. Long-term, fixed-price corporate PPAs in the European sense are still few.
Hedging tools are thin as well. Volume on EPİAŞ’s Electricity Futures Market is a very small fraction of total trading, and baseload futures on Borsa İstanbul VIOP have limited depth beyond a few months. Hedging a solar plant’s five-year price risk on exchange is not practical today, so long-term price fixing is met through bilateral contracts.
Types of structured agreement
“Structured offtake” is not a single product. Structures differ widely in how the price is set and which risk stays with whom.
For solar, the distinction that matters most is pay-as-produced versus baseload. A solar plant under a baseload contract has to buy the energy it does not produce at night and in the evening from the market. Those are the most expensive hours of the day, so a baseload price that looks attractive on paper can lose money in practice.
For a solar plant, a baseload contract means being short the evening peak.
An example: a 10 MW solar plant, three scenarios
Take a 10 MW solar plant producing about 16,000 MWh a year. Set three scenarios for the price in solar hours: low 1,500, base 2,200 and high 2,900 TL/MWh. Compare four structures: merchant, a 2,000 TL/MWh fixed price, a 1,700 TL/MWh floor with a 100 TL/MWh premium, and a 1,800–2,600 TL/MWh collar.
The table shows what each structure buys. A fixed price gives up 3.2 million TL a year in the base case and gains 8 million TL in the low case. A floor pays 1.6 million TL of premium in every scenario but keeps almost all the upside. A collar needs no premium; it pays for the floor by giving up the cap.
The financing side: debt is sized on the downside
Lenders size debt not on the base case but on cash flow in the downside case. The real value of fixing the price is therefore not a higher expected revenue but a higher downside revenue.
In the example, downside merchant revenue is 24 million TL and fixed-price revenue 32 million TL. If debt capacity is set on downside revenue, the fixed-price structure can carry about 33% more debt. That can move equity returns far more than the price itself.
In Türkiye there is a tenor mismatch here. Lenders want long-term revenue certainty for 7–10 year debt, while in our experience most corporate buyers are reluctant to commit to a price beyond three years. Laddered contracts, renewal options and intermediation by financial institutions are increasingly used to bridge the gap.
Items specific to Türkiye
Currency is the most critical of these. In a high-inflation period a fixed TL price can become meaningless in real terms within a few years, while an FX-based price does not match the buyer’s TL revenue. In practice most agreements settle somewhere between, with partial indexation and periodic review.
With CBAM entering its definitive period in 2026, certified renewable energy has become a commercial matter for industrial companies exporting to the EU. It is the most concrete driver of demand for long-term corporate offtake in Türkiye.
Not all or nothing
The choice between merchant and fixed price is not binary. The structure we recommend most often is to fix part of the output, leave the rest in the market, and ladder the fixed share by tenor.
The ladder rolls every year: when a year passes, a new third year is added and the shares shift. The price is fixed over time rather than at a single point. You never catch the best price, but you are never caught at the worst price with all your output.
Three things set the size of the fixed share: the minimum revenue debt service requires, the plant’s generation uncertainty (a solar plant’s annual output can deviate a few percent from the average), and the investor’s appetite for the remaining risk. Committing to sell energy at a fixed price that you may not produce simply turns price risk into volume risk.
A different question for batteries
For storage the question is framed differently. A battery’s revenue depends on price spreads, not price levels, so a fixed-price energy contract does not cover its risk. Structured revenue for a battery takes the form of tolling or a revenue floor: the counterparty buys the right to use the battery for a fixed fee, or guarantees that annual revenue does not fall below a floor.
The investor’s view
The right structure starts not with “will prices rise?” but with “what happens if they fall?”. For an investor with no debt, a diversified portfolio and tolerance for cash flow volatility, merchant exposure can create more value over time. For an investor financing a single asset with debt or relying on its cash flow, fixing the price is often a necessity.
At Frekans we compare merchant, fixed-price and floor structures for each asset on the same scenario set and size the fixed share to the investor’s financing structure. In agreements with corporate buyers we structure price, indexation and YEK-G together.
