I. INTRODUCTION

The Regulation on Unlicensed Electricity Generation in the Electricity Market, published in the Official Gazette dated 12/05/2019 and numbered 30772 (the “Regulation“), regulates the procedures and principles to be applied to natural or legal persons who are exempt from the obligation to obtain a license and establish a company but can generate electricity, nonetheless.

The Regulation has been subject to numerous interventions and improvements since its effective date. Finally, the draft regulation entitled “Regulation Amending the Regulation on Unlicensed Electricity Generation in the Electricity Market” (the “Draft Regulation”) presented to the public opinion and evaluation by the Energy Market Regulatory Authority (the “EMRA”) on 18/03/2024, (i) the timelines and process flow for connection agreement applications have been reviewed, (ii) proportional limitations regarding the mechanical and electrical installed capacity of production facilities have been determined, and (iii) criteria for compliance with regulations related to the commissioning of production facilities and system usage have been added. This bulletin will address the changing administrative framework and practices in unlicensed electricity generation with the Draft Regulation.

II. FUNDAMENTAL PRINCIPLES

1. What Is the Projected Timeframe for Connection Agreement Application?

By the Regulation, natural or legal persons to whom a summons letter for the connection agreement issued in their name has been served are granted a period of 180 (one hundred and eighty) days from the date of notification (the “Date of Notification”) for signing the connection agreement. Within the first 30 (thirty), 90 (ninety) and 150 (one hundred and fifty) days from the Date of Notification, respectively, it is required to apply to the administration to obtain EIA approval, and to submit the production facility and, if available, the connection line project for the approval of the Ministry of Energy and Natural Resources (the “Ministry”) or authorized institution and/or legal entity, otherwise the connection applications will be deemed invalid.

With the Draft Regulation, the period granted to the recipient for signing the connection agreement will extend to 360 (three hundred sixty) days from the Date of Notification, and other timeframe conditions related to the procedures followed in the application will be excluded from the scope of the Regulation. On the other hand, the applicants are obliged to obtain; 

• EIA approval,

• Approval for the production facility,

• Approval for the existing connection line project, if any,

From the Ministry or the institution and/or legal entity authorized by the Ministry during the specified period.

It is envisaged that the EMRA intends to alleviate congestion and accumulation among grid operators for the extension of the deadline before the signing of the connection agreement and the EMRA is considering transferring the matter out of the discretion of the grid operator. From a project development perspective, while ornithology reports are necessary for wind power plant investments in any case, it is controversial whether those reports, which are a requirement even for solar power plant investments, “EIA positive” processes, the subsequent zoning permits can be completed within this timeframe.

2. From Which Date Will the Specified Timeframes Be Implemented?

As of the effective date of the Draft Regulation, applicants will be based on the remaining periods as of the effective date for the determination of the period envisaged for connection agreement applications:

• If the applicants have more than 180 (one hundred and eighty) days remaining, the 360 (three hundred and sixty) day period will apply to the existing summons letters for connection agreement.

• If the applicants’ remaining period is less than 180 (one hundred and eighty) days, the remaining period will be applied as 180 (one hundred and eighty) days.

3. What Are the Envisaged Limits for the AC/DC Ratio to be Applied in Production Facilities?

With the Draft Regulation, the mechanical (installed) power requested for production facilities entitled to receive a summons letter for a connection agreement should not exceed twice the electrical power.

On the other hand, the mechanical installed capacity increase requested for unlicensed electricity production facilities subject to the Renewable Energy Resources Support Mechanism, which were entitled to receive a call letter for a connection agreement before the Draft Regulation, which is fully indexed to self-consumption, entered into force, shall not exceed 20% (twenty percent) of the electrical installed capacity.

4. What Does “Obtaining Necessary Permits and Approvals” Mean for Commencing Investment?

The acceptance procedures for the commissioning of production facilities and production facilities to the grid concerning system usage must be completed within the timeframes specified in Article 19 of the Regulation. In addition to completing the acceptance procedures within the mentioned timeframes in the Draft Regulation, it will also be necessary to ensure the fulfillment of the condition of obtaining the necessary permits and approvals to commence investment.

This regulation represents a step towards recognizing the “ready to build” concept within the framework of the Regulation, as understood from the provisions of the Draft Regulation, acceptance procedures will not be concluded without the completion of zoning and similar administrative processes that fall outside the control scope of electricity market actors. 

5. Is Partial Acceptance Possible Under the Same Summons Letter?

Under the Regulation, except for the power increase procedures related to mechanical and electrical installed capacity as explained above, only one acceptance can be made for an unlicensed electricity generation facility. With the Draft Regulation, it will be possible to make partial acceptance, not less than 10 Mwe capacity for each phase, associated with the same summons letter/connection agreement.

III. CONCLUSION

The Draft Regulation presented by the EMRA had remained open to public evaluation until 29/03/2024, and relevant parties had the chance to submit their additional suggestions and proposals to the email address epdklisanssiz@epdk.gov.tr in Word format and in writing to the EMRA Electricity Market Directorate. The Draft Regulation aims to ensure efficient use of the connection capacities allocated to the relevant parties.