A New Era In The Unlicensed Electricity Market

A New Era In The Unlicensed Electricity Market

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The Regulation on the Amendment ("Amendment Regulation") of the Regulation on Unlicensed Electricity Production in Electricity Market ("Regulation") and the decision of the Energy Market Regulatory Authority numbered 11098 ("Decision") have been published in the Official Gazette dated 11.08.2022 and numbered 31920.

What Do the Amendment Regulation and the Decision Aim?

The Amendment Regulation and the Decision bring some changes to the unlicensed electricity market.

What is regulated in the Amendment Regulation and the Decision?

As per the principle of "production as much as consumption", unlicensed electricity generation facilities are now able to sell as much electricity as they consume in one-year period. In this context, all productions exceeding the consumption of the previous year will be transferred to the Renewable Energy Resources Support Mechanism ("YEKDEM") as a "free contribution" without any usage fee. However, if the consumption in the relevant year exceeds the previous year, the right to sell will be granted as much as the consumption amount of the relevant year.

The Decision regulates how the annual consumption amounts in the unlicensed electricity generation facilities will be calculated, which values shall be taken into consideration during settlement, and under which principles transfer to YEKDEM system shall take place in case of production exceeding consumption.

With the Amendment Regulation,

  • Industrialists, whether located in the Organized Industrial Zone ("OSB") or not, will be able to establish an unlicensed electricity generation facility in a region other than the distribution zone where their facility is located;
  • Industrialists owning cogeneration plants will also be able to establish an unlicensed electricity generation facility if they cannot produce sufficient electricity in their facilities;
  • For plants above 10 MW, the possibility of direct connection to the system (feeder) will be introduced and the constraint at the connection point to the grid will be eliminated;
  • Persons having established a production/generation facility for consumption purposes but do not have the opportunity to establish more facilities in the same place will be able to establish an unlicensed electricity generation facility in other places to meet their production; and
  • The production and consumption of unlicensed electricity generation facilities established by OSB legal entities will be offset from the main meters of OSB.

By Resat Moral, Managing Partner, Bilge Binay Kanat, Managing Associate, Burak Bati, Associate, Moral, Kinikoglu, Pamukkale, Kokenek