Significant Amendments to The Electricity Market Licensing Regulation

As is known, the concept of electricity generation facility with storage was detailed for the first time in the Electricity Market Law No. 6446 with Law No. 7417 on Amendments to Civil Servants Law and Certain Laws and the Decree-Law No. 375 which was published in the Official Gazette numbered 31887, dated July 5, 2022 and regulation of the procedures and principles regarding the implementation was being expected.

Significant amendments are envisaged in the Electricity Market Licensing Regulation (“Regulation”), which was published in the Official Gazette dated November 2, 2013 and numbered 28809 along with the Regulation on Amendments to the Electricity Market Licensing Regulation (“Amendment Regulation”) which was published in the Official Gazette numbered 32018, dated November 19, 2022 and entered into force on the date of publishment.  

Hereby with this legal alert, the significant innovations and the current situation occurred as a result of amendments brought by the Amendment Regulation will be shared:

1. Investors who undertake the establishment of an electricity generation facility with storage will be able to establish a wind power plant (“WPP”) and/or solar power plant (“SPP”) without being subject to any competition.

• The minimum installed capacity required for WPP shall be 20 MW, the minimum installed capacity required for SPP shall be 10 MW and the upper limit shall be 250 MW. No measurement obligation will be required for these projects.

• The installed capacity of the generation facility and the capacity of the electricity storage unit are evaluated together as a sum in determining the collateral and minimum capital adequacy in pre-license and license applications within the scope of electricity generation facilities with storage.
  • The ratio of the capacity of the generation facility with storage undertaken from electricity storage units within electricity generation facilities with storage to the installed power of the relevant facility shall be 1 at minimum.

For instance, the storage facility to be established with a capacity of 150 MW, must have a minimum capacity of 150 MW/hour at least.

• The ratio of the electrical installed capacity of the WPP or the SPP to the installed capacity of the electricity storage unit undertaken to be established shall be 1 at maximum.

For instance, a wind or solar energy facility of maximum 100 MW can be established along with the electricity storage unit to be established with a power of 100 MW.

• The energy supplied to the grid after being produced and stored in electricity generation facilities with storage is within the scope of YEKDEM (Renewable Energy Sources Supporting Mechanism).

• The right to increase wind or solar based capacity up to the installed capacity of the storage facility undertaken to be established is brought to the licence-holder legal entities which undertake the establishment of electricity storage facility from the generation facilities in operation partially or as a whole.
  • The related capacity increase is subject to the conditions that the license holders do not go beyond 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 given by TEIAS (Turkish Electricity Transmission Corporation) or distribution companies.
  • Capacity increases within the scope of electricity generation facilities with storage also benefit from YEKDEM during the remaining YEKDEM period of the said generation facility.

• The right to request the transfer of the license granted to banks and financial institutions has also been granted to the legal entity which purchases the generation facility from forced sale by auction.

• Upon the finalization of the sale of the generation facility as a result of the enforcement proceedings, it is foreseen that a new license will be granted to the legal entity as a continuation of the old license, provided that the legal entity which purchased the generation facility makes the application and fulfils its obligations under the application.

• Excluding the applications within the scope of YEKA (Renewable Energy Resource Area) and the electricity generation facility with storage, measurement obligation has been introduced to be made on the fields where the relevant facilities will be established in pre-license applications.

• For  pre-license applications made to establish a WPP, a measurement must be taken within the last eight years and lasting at least one year.

• For pre-license applications made to establish a SPP, a measurement must be taken within the last eight years and lasting at least one year, provided that six months of this period shall be on the site.

• With the Amendment Regulation, the restriction on the transfer of shares in the shareholding structure of the legal entity holding pre-license has been released, on the condition that the said share transfer does not lead a change in control for the legal entity.

• The Amendment Regulation also brought about a new provision to the Regulation in terms of applications for independent electricity storage facilities.

Accordingly, in case the legal entities which are holding a supply license and are approved to add an independent electricity storage facility to their license apply for a pre-license to establish an electricity generation facility with storage within 3 months following the entry into force of the relevant Amendment Regulation; the positive connection opinions given for the relevant independent electricity storage facilities will also be valid for the pre-license applications to be made by these legal entities.

However, the power applicable to pre-license applications will not exceed the following limits within the scope of each supply license:

• For independent electricity storage facilities of 250 MW or less: the installed capacityof which positive opinion is given,

• For independent electricity storage facilities over 250 MW: the total capacityto be found by adding the half of the part of the total installed capacity which exceeds 250 MW with positive opinion to the 250 MW power.

The pre-license applications to be made within the scope of this article shall not exceed 500 MW in any case.

As seen above, with this Amendment Regulation, the production of renewable energy was also encouraged along with electricity storage. In this manner, some conveniences were provided to the facility owners. Thus, serious leaps and large investments in the industry are expected.

This note has been prepared in accordance with the legislative developments occurred until November 19, 2022 for general information purposes only and not for advertising purposes, and it does not contain any case-specific legal advice.