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Electricity Regulation 2019
In 2001, the main legislative document that created the current market structure, the Electricity Market Law No. 4628 (Law No. 4628) was issued as part of the efforts to harmonise with the EU and to liberalise the market. Under Law No. 4628, the Energy Market Regulatory Authority (EMRA) was established to regulate and supervise the market as an independent body. Law No. 4628 was amended with Electricity Market Law No. 6446 (EML), which entered into force on 30 March 2013. Law No. 4628 is still in force, but its name has changed to the Law on the Organisation and Duties of the Energy Market Regulatory Authority. Therefore, Law No. 4628 only regulates the duties and rights of EMRA, while the EML regulates market activities.
The EML and the main secondary legislation, namely the Electricity Market Licence Regulation published in the Official Gazette dated 2 November 2013 No. 29908 (EMLR), regulate the market activities and type of licences. Each market activity, on the other hand, is subject to other secondary legislative documents, which regulate in detail the specific activity. Different generation activities such as renewable energy, nuclear energy and energy efficiency are also subject to their specific laws and implementing regulations.
Licensing in general
Pursuant to the EML, electricity market activities consist of generation, transmission, distribution, supply, market operation as well as import and export activities. To carry out any of the market activities, market participants are required to obtain licences from EMRA, except for certain generation activities.
In the past, as a state monopoly, the Turkish Electricity Authority (TEK) was responsible for all generation, transmission and distribution activities. In 1984, following the adoption of Law No. 3096, TEK’s monopoly on electricity activities was weakened and private companies were given the opportunity to operate in the market. TEK was first unbundled in 1993 into two state-owned enterprises: one for generation and transmission (Turkish Electricity and Transmission Company (TEAS)) and the other for distribution (Turkish Electricity Distribution Company (TEDAS)). In 2001, TEAS was unbundled into three state-owned companies: one for generation (Turkish Electricity Generation Company (EUAS)), one for transmission (Turkish Electricity Transmission Company (TEIAS)) and one for trade (Turkish Electricity Wholesale Company (TETAS)). In 2004, TEDAS was included in the privatisation portfolio as part of a Privatisation High Council Decision and as explained below under ‘Distribution’, the privatisation process has been completed. EUAS is also in the process of being privatised.
Under the EML and the EMLR, licences may be granted for a maximum term of 49 years; however, the term for the licences regarding generation, distribution and transmission may not be less than 10 years. Each activity is subject to a separate licence. However, the export activity can be conducted by generation licensees and supply licensees, while import activity can be conducted by supply licensees. Import and export activities of such legal entities are regulated under their respective supply or generation licences and do not require separate licences.
A licence cannot be assigned. However, there are certain exceptions for generation licences (see below). A minimum share capital requirement is sought for electricity companies under the EMLR, the amount of which differs depending on the activity. A licence fee, which differs depending on the activity, also applies.
Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through – Electricity Regulation 2019 (Published: November 2018). For further information please visit www.gettingthedealthrough.com.
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