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Turkey Introduces New Electricity Markets Regulations

Turkey Introduces New Electricity Markets Regulations

Regulations for the electricity markets, which have been eagerly awaited for a long time in the energy sector, came into effect. The innovations brought by the new regulations to the electricity market are briefly as follows:

● Premises that establish an electricity storage facility while generating electricity or that establish an electricity generation facility after obtaining a license as an electricity storage facility will henceforth be classified as “Storage Electricity Generation Facility“. Anyone who builds a storage facility will earn their share of being an energy investor.

In this context, it is foreseen that there will be a very rapid development process in wind turbine and solar panel production and storage technologies.

● Investors who undertake to establish a storage facility will be able to apply for a pre-license to the Energy Market Regulatory Authority (“EMRA”) without any competition by the Turkish Electricity Transmission Corporation (“TEIAS”) to establish a wind and solar power plant as much as the storage capacity they will install. There will be no measurement requirements for these projects.

● Another change regarding storage facilities is the provision that EMRA will not take action regarding the land acquisition or establishment of a right of use for electricity storage and connection facilities has been repealed. Thus, EMRA will be able to confiscate storage facilities if other conditions are met.

● Licensee legal entities that undertake to establish electricity storage facilities from generation facilities that are partially or completely in operation have been given the opportunity to increase their capacity based on wind and solar as much as the installed power of the storage facility they undertake to establish. This capacity increase can be made provided that the license holders do not go beyond the areas specified in their licenses, that the power supplied to the system at the time of operation does not exceed the installed capacity specified in their licenses, and that appropriate connection opinion is provided by TEIAS or distribution companies.

● Among the electricity storage units within the storage electricity generation facilities, those who meet the necessary conditions will be able to participate in the balancing power market and ancillary services. For production applications to be made within the scope of storage facilities, the minimum installed power will be 20 (twenty) megawatts for wind and 10 (ten) megawatts for solar. The upper limit will not exceed 250 (two hundred and fifty) megawatts.

● The capacity of the contracted electricity storage facility will be at least enough to keep the installed power of that facility in the system for 1 (one) hour. For example, the capacity of the storage facility to be established with an installed power of 100 (hundred) MW will be at least 100 (hundred) MW/hour.

● In order for wind and solar power generation facilities with storage to operate in the balancing market and the ancillary service market, a connection will be made so that the generation facility and the storage facility can be separately measured and controlled. In addition, electricity storage facilities can be established in all unlicensed production facilities where monthly set-off is made.

● The ratio of the installed power of the wind and solar-power-based electricity generation facility to the installed power of the electricity storage unit to be established will be a maximum of 1 (one). For example, with the storage to be established at 100 (one hundred) megawatts, a maximum of 100 (hundred) megawatts of wind or solar power plants can be installed.

● With the storage facilities to be established, the energy supplied to the grid by intermittent renewable energy sources will be stored and made more regular while contributing to grid operation and flexibility.

● The energy supplied to the grid after being produced and stored in the production facility will be within the scope of the Renewable Energy Resources Support Mechanism (“YEKDEM”). Suppose energy is drawn from the electricity storage unit established in the electricity generation facility with storage and the electricity storage unit integrated into the generation facility within the scope of YEKDEM in any settlement period. In that case, the energy drawn from the grid will be supplied from the electricity storage unit without being subject to YEKDEM. The power supplied to the grid from the electricity storage unit above the amount withdrawn from the grid will also be considered within the scope of YEKDEM.

After these new regulations, it will become easier to invest in energy, especially in storage, in Turkey.

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