New Opportunities for Renewable Energy in Turkey

Unlicensed Electricity Generation

The Regulation on the Unlicensed Electricity Generation in Electricity Market (Regulation) and the Communiqué on Enforcement of Regulation on Unlicensed Electricity Generation (Communiqué) entered into force on 2 October 2013 and superseded the Regulation on Unlicensed Electricity Generation in Electricity Market of 21 July 2011 (Former Regulation).

Licence exemption 

The Regulation regulates the exemption from the requirement to obtain a licence and establish a company in order to generate electricity and lists the generation facilities that benefit from such exemption. As per the Regulation, the total installed capacity of an electricity generation plant based on renewable energy sources has been increased from 500 kW to 1000 kW.

Establishment, operation, and grid connection of the plant

The real person or legal entity producing electricity will be responsible for the establishment, operation, and occupational safety of the generation plant and will be liable for establishment expenses and damages from operating the plant.

The requirement to have a ready consumption plant before establishing the generation plant, regulated by the Former Regulation, has been superseded by the Regulation. As per the Regulation, the generation and consumption plants must be located in the same distribution area, and projects for the generation and consumption plants may be designed simultaneously, which prevents additional costs to integrate the plants.

Generation plants falling under the scope of the Regulation are connected to the distribution grid subject to the exemptions stated in the Regulation.

Surplus energy 

In principle, the electricity will be generated to meet the needs of the producers.  But unconsumed energy may be consumed by consumption plants in the same area, or by consumption plants outside the generation plant’s area owned by the producers. The surplus energy generated from a renewable energy source is purchased by the relevant distribution company at the price of the renewable energy support mechanism, determined by the Law on Utilization on Renewable Energy Sources for the Generation of Electricity dated 10 May 2005 and running for 10 years. The regulation also determines the support mechanism limited to five years for the usage of domestic products.

Unlicensed electricity producers may not sell the surplus electricity generated by concluding bilateral agreements.

Current status of the applications

The Energy Market Regulatory Authority (EMRA) has approved 659 out of 980 application submitted under the Former Regulation for unlicensed electricity generation, and the number of the applications is expected to grow with the entry into force of the Regulation.

New applications for wind and solar energy plant licences

The renewable energy market of Turkey has mainly focused on hydraulic and wind energy. Now applications for the first solar energy licences (to establish a solar plant for a total capacity of 600 megawatts) were submitted to EMRA in June 2013. The applications are being reviewed by the Ministry of Energy and EMRA, and the licences are expected to be issued in the first half of 2014.

The New Electricity Market License Regulation dated 2 November 2013 regulates the new application procedure for the wind and solar energy licenses. The license applications will be related to the specific sites and capacities previously announced by EMRA and the applications will be accepted within the 16^th month following the announcement of EMRA. The applications for solar energy licenses are expected to be by the beginning of April 2015 and wind energy licenses by the end of the same month. For the licence application, the applicants must first obtain an authorisation from the Directorate of Meteorology to set up a measurement station and submit the data to EMRA from at least one year, including the on-site measurement for at least six months.

New EMRA legislation promotes renewable energy sources by providing benefits, such as renewable energy support mechanisms and exemptions, and by preventing additional costs.

authors: Levent Çelepçi, Cemre Yakasiz