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Amendments on Turkish Electricity Market Capacity Regulation

May 2021 – On 21 May 2021, Turkey’s Energy Market Regulatory Authority, EMRA, amended the Electricity Market Capacity Regulation (“Amendment”).

In April, EMRA opened a draft amendment to the Electricity Market Capacity Regulation (“Draft”) for public consultation. The Amendment, while based mainly on the Draft, includes new provisions. 

Below is a summary of the main changes introduced by the Amendment.

Power plants now allowed to participate in the mechanism

As foreseen in the Draft, build-operate power plants and power plants that are operational for more than 13 years (calculated from the date of the provisional acceptance of their oldest unit that is currently operational) and based on an energy resource other than domestic resources and (“Permitted Plants”), which were not permitted to participate in the capacity mechanism until the enactment of the Amendment, are now eligible to participate in the concerned mechanism.

Permitted Plants wishing to participate in the mechanism in 2021 are to apply to the system operator within 15 days from 21 May 2021.

The Draft set the date that the Permitted Plants will start benefitting from the mechanism as 1 July 2021; however, this provision has been amended. As per the Amendment, Permitted Plants, once their applications are deemed acceptable, will be added to the list of plants benefiting from the capacity mechanism as of the date of the application.

Determination of amount of electricity generated from domestic coal and natural gas

The Electricity Market Capacity Regulation states that  imported coal-fired power plants or natural gas combined cycled power plants, if using domestic coal or domestic natural gas for electricity generation, will be entitled to a capacity payment equal to the amount of electricity generated from domestic coal or domestic natural gas.

As per the Amendment, the amount of electricity generated from domestic coal that will be taken as the base for the calculation of the above-mentioned capacity amount will be notified to TEIAS (the state-owned transmission network operator) by EUAS (the state-owned Electricity Generation Joint Stock Company), provide that an electricity purchase agreement has been executed between the owners of such power plants and EUAS. If no such agreement exists, the concerned amount will be determined by TEIAS.

Concerning electricity generation from domestic natural gas, the electricity amount notification will be made either by BOTAS (the state-owned natural gas transmission network operator), or the notifications made by the relevant legal persons through the electronic notification system will be taken into account.

The Amendment extends the application of the Electricity Market Capacity Regulation and allows Permitted Plants to participate in the capacity mechanism. As many power plants in Turkey fall under the definition of Permitted Plants, it is expected that the number of power plants participating in the mechanism will increase. The Amendment also clearly regulates how the amount of electricity generated from domestic coal and natural gas will be determined, which increases the predictability for market players participating in the mechanism.

For more information please contact Şeyma Olğun, Senior Associate, at solgun@gentemizerozer.com.