It is unavoidable that the increasing population, traffic, industrialization, used wastes, etc. pollute nature and the environment. We, as human beings, should reduce environmental pollution for future generations. This is where alternative energy production comes into play.
Turkiye’s geographical position is an advantage when it comes to renewable energy sources, and thus, the development and implementation of renewable energy have a critical importance for Turkiye.
Turkiye’s Renewable Energy Legislation
Turkish law recently defined renewable energy sources as wind power, solar power, geothermal power, biomass power, wave, and non-fossil energy sources such as ebb tide or hydroelectric plants with a reservoir area of less than 15 square kilometers.
In 2005, Turkiye established the legal basis for renewable energy with Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy numbered 5346. The purpose of Law on utilization of renewable energy sources for the purpose of generating electrical energy is to expand the utilization of renewable energy sources for generating electric energy, to benefit from these resources in a secure, economical, and qualified manner, to increase the diversification of energy resources, to reduce greenhouse gas emissions, to assess waste products, to protect the environment, and to develop the related manufacturing industries toward realizing these objectives.
In 2013, Turkish Electricity Market Law numbered 6446 was published and further amendments were made which also regulate the renewable energy market. As to secondary legislation, Electricity Marketing Licensing Regulation was published on November 2, 2013, with further amendments made from time to time.
In 2016, Regulation on Renewable Energy Resource Areas also came into effect. Its importance is that it defines renewable energy resource areas (called “YEKA”). YEKA areas are areas where electricity generation plants based on wind and/or solar energy resources can be established in large installed powers with economic potential without administrative permits.
In 2019, Regulation on the Unlicensed Electricity Generation in Electricity Market was published (and further amendments were made) for electricity activities that do not need a license. There are further secondary legislations, not stated herein, relevant to renewable energy.
With the adoption of the draft law on the ratification of the Paris Climate Agreement by the Turkish Grand National Assembly and its publication on October 7, 2021, Turkiye officially became a party to the agreement. The Paris Climate Agreement imposes certain obligations on Turkiye and other signatory countries to reduce the use of fossil fuels and increase renewable energy sources.
According to Turkiye’s National Energy Efficiency Action Plan covering the years between 2024 and 2030, the goal is to reduce energy consumption by 16% and contribute to 100 million tons of emissions reduction, with the country investing USD 20 billion in energy efficiency schemes in the public and private sectors by 2030.
Activities With License
In order to carry out activities in the electricity production market in Turkiye, a license has to be obtained from the Energy Market Regulatory Authority of Turkiye (EMRA). All electrical energy produced by licensed legal entities can be sold in the free electricity market or through bilateral commercial agreements. In addition, the Renewable Energy Resources Support Mechanism (YEKDEM) is applied for electrical energy produced in licensed electricity production facilities based on YEK-certified renewable energy resources that will be put into operation from July 1, 2021, to December 31, 2030. Within the scope of the YEKDEM, a purchase guarantee is offered over the period and prices are announced on a source basis within the scope of the Turkish Presidential Decree as of May 2023.
Activities Without a License
Regulation on the Unlicensed Electricity Generation in Electricity Market delineates the natural or legal persons who can produce electrical energy without obtaining a license or establishing a company.
General View on Disputes in the Renewable Energy Market
This is an extensive matter and depends on the participants in the disputes. If the disputing party is governmental, an administrative party such as the EMRA, the Ministry of Energy, etc., the litigation case can be settled at the Administrative Court of Turkiye. On the other hand, if the disputing matter is between private sector players, international arbitration is generally chosen in the contracts between such parties.
By Gozde Esen Sakar, Senior Partner, Sakar Law Firm
This article was originally published in Issue 11.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
