FDI Update reports on recent legislation, international arbitration cases and enforcement decisions. It also brings news and insights from Turkey, the Middle East, Africa and CIS to guide investors that target foreing markets for expansion.
Legislative Overview of the Turkish Energy Market: Developments in 2021
There have been some significant developments in the Turkish energy regulation in 2021. In our first newsletter of the new year, we provide a brief summary of these regulations and amendments.
1. A Series of Amendments Were Made in the Secondary Legislation
As described in our previous newsletter, the law that included significant changes to the energy legislation was published and entered into force at the end of the year 2020. On 9 May 2021, a series of regulations that amend the secondary energy legislation prepared by the Electricity Market Regulatory Authority (“EMRA”) was published in the Official Gazette. The amendments include the following regulations:
– Electricity Market Licensing Regulation
– Regulation on License-Exempt Electricity Generation in the Electricity Market
– Regulation on Certification and Support of the Renewable Energy Resources
– Electricity Market Connection and System Usage Regulation
– Electricity Market Balancing and Settlement Regulation
– Electricity Grid Regulation
2. New Regulation Was Published on Electricity Market Storage Activities
In addition to the above-mentioned regulations, Electricity Market Storage Activities Regulation was published in the Official Gazette on 9 May 2021. By virtue of this new regulation, market participants are now allowed to establish electricity storage units and facilities where they can store the electricity they generate and trade when the market conditions are favourable.
Principles regarding storage facilities were provided under the following four types of generation facilities:
i) Storage facilities integrated with generation facilities;
ii) Storage facilities integrated with consumption facilities;
iii) Independent storage facilities; and
iv) Storage facilities to be established by distribution companies.
As per the regulation, applications to establish storage units and facilities within the scope of this regulation were to commence 1 month after the announcement of technical criteria by the Turkish Electricity Transmission Company (“TEİAŞ”). Subsequently on 21 September, TEİAŞ announced the said criteria and the applications were started to be received by 21 October 2021.
3. Capacity Mechanism & Renewable Energy Resource Guarantee Certificate
On 21 May 2021, two regulations prepared by EMRA (The Regulation Amending the Electricity Market Capacity Mechanism Regulation and the Regulation Amending the Regulation on Renewable Energy Source Guarantee Certificate in Electricity Market) were published in the Official Gazette which introduced amendments to the capacity mechanism and renewable energy resource guarantee certificate (“YEK-G”) applications.
With these amendments, the scope of facilities that are included in the capacity mechanism were extended, and the facilities that were included by way of these amendments were enabled to apply to the system operator in order to benefit from the regulation in 2021. At the same time, issuance and redemption transactions for YEK-G for the transition period were regulated.
4. Lists of Required Documents To Be Submitted To EMRA Were Updated
Decisions of The Board of EMRA dated 30 September and numbered 10441-1, 10441-2 ve 10441-3 were published in the Official Gazette on 5 October 2021. With these decisions, the following lists and their appendices of the required documents to be submitted to EMRA were updated:
(i) Required information and documents to be submitted with prelicense applications under the Principles and Procedures Concerning Prelicense and License Transactions;
(ii) List of required information and documents to be submitted with license applications; and
(iii) List of required information and documents to be submitted with prelicense and amendment applications; and demerger, facility/project transfer approval applications.
5. EMRA’s Decision Determining the Completion Periods for Construction of Electricity Storage Facilities
On 7 October 2021, the decision of the Board of EMRA numbered 10442-2 on “Preliminary License Periods and the Reference Construction Periods for Determining the Facility Completion Date” was published in the Official Gazette. With this decision, completion periods of the construction of the electricity storage facilities that will be established in accordance with the above mentioned Electricity Market Storage Activities Regulation were regulated.
6. New Regulation: Accommodation of Immovables in the Electricity, Natural Gas and Petroleum Markets
The regulation that sets out the procedures and principles regarding accommodation of immovables to be carried out by EMRA in the electricity, natural gas and petroleum markets, as well as the rights and obligations of the license/prelicense holders thereof was published in the Official Gazette dated 2 November 2021 and entered into force on the same date.
7. Amendments Regarding Acceptance of Electricity Generation Facilities
The regulation prepared by Ministry of Energy and Natural Resources which introduced some amendments to the Regulation on Acceptance of Electricity Facilities was published in the Official Gazette dated 6 November 2021 and entered into force on the same date.
The amendments made in the regulation sets out the upper limits with regard to final acceptance periods of electricity facilities.