Slides presentate in occasione del seminario "Le rinnovabili in Turchia - Opportunità di investimento" organizzato il 30/01/2013 da WEC Italia in collaborazione con GSE-Corrente

1. Licensing Procedure in
Turkish Electricity Sector
(General Framework and
Current Status)
Iskender Basat SAHIN
Energy Expert - EMRA
isahin@epdk.org.tr
Ankara 22/01/2013

2. Licensing Procedure in Turkish Electricity
Sector: General Framework and Current Status
Presentation Plan
1. Introduction
2. Licensing P
2 Li i Procedure i EMRA
d in
3.
3 Current Situation on Licences
2 www.epdk.gov.tr

3. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
- Introduction
As one of the most important developing countries in the world
world,
Turkey, in line with its strong economic development in recent
years, is faced with a rapidly increasing demand for energy.
(especially electricity)
electricity).
Turkey, entered into a phase of significant investment in energy
sector to meet the huge demand for energy
6,0
5,3
5,0
40
4,0 4,1
,
4,0 3,6
Percent
3,0
2,0
1,0
0,0
00
1971-1980 1981-1990 1991-2000 2001-2011
3
Average Economic Growth of Turkey*
www.epdk.gov.tr

4. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
- Introduction
Turkey Electrical Power View (GWh)
Years PRODUCTION EXPORT IMPORT CONSUMPTION
2002 129.399,50 3.588,20 435,1 132.552,60
2003 140.580,50
140 580 50 1.158,00
1 158 00 587,6
587 6 141.150,90
141 150 90
2004 150.698,30 463,5 1.144,30 150.017,50
2005 161.956,20 635,9 1.798,10 160.794,00
2006 176.299,80 573,2 2.235,70 174.637,30
2007 191.558,10 864,3 2.422,20 190.000,20
2008 198.418,00 789,4 1.122,20 198.085,20
2009 194.812,90 812 1.545,80 194.079,10
2010 211.207,70 1.143,80 1.917,60 210.434,00
2011 229.395,10
229 395 10 4.555,80
4 555 80 3.644,60
3 644 60 230.306,30
230 306 30
With respect to 2002;
Electricity production increased 77,3%;
yp , ;
Electricity consumption increased 73,7%;
4
Electricity export increased 27,0%. www.epdk.gov.tr

5. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
- Introduction
Turkey, which has Europe's fastest-growing energy market; as a
result of investments made in the last few years, the total installed
capacity exceeded the level of 56 000 Megawatts (MW)
56.000 (MW).
5 www.epdk.gov.tr

6. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
1. Introduction
Turkey has the public monopolistic power sector until 1984
1984.
The first steps were taken in 1984 to end the monopoly of the public
sector. I 1984 th private sector, th
t In 1984, the i t t though f
h few i number, b
in b began tto
operate in the market in electricity generation.
But the
B t th real advancement against th public monopoly occurred after
l d t i t the bli l d ft
“The Energy Market Law (EML)” No. 4628 was published in March
2001, with the aim of “to ensure the production of cost-effective,
sufficient, reliable and qualified electricity and t make available f th
ffi i t li bl d lifi d l t i it d to k il bl for the
use of the end users”.
Before the EML, all of these activities were handled by state
companies. The EML essentially foresees a vertically integrated
electricity sector, wherein the three main activities of the sector,
namely generation, transmission and distribution shall be carried
out by separate entities and in a competitive market.
6 www.epdk.gov.tr

7. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
1. Introduction
At present the following actors are dealing with generation:
p g g g
1. EUAS (State owned generation company): It is the largest generating
company in the market. It is expected that all the generation facilities
will be privatized in the following years.
2. IPP’s: These companies shall generate electricity in their own facilities
and shall expected to sell their energy to the free market
market.
3. Auto-producers: They are the legal entities who generate electricity
mainly for their own consumption.
Transmission: Transmission is carried out by a public authority called Turkish
Electricity Transmission Inc. (TEİAS). TEİAS is a natural monopoly.
Distribution: Distribution activities are carried out by regional distribution
companies and TEDAS was the owner of all distribution assets before the EML.
* There are 21 distribution regions and 13 of them have already been privatised
privatised.
7 www.epdk.gov.tr

8. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licenses and Li
2 Li d Licensing P
i Procedure i EMRA
d in
All market activities are conducted under licenses issued by
«Energy Market Regulatory Authority» (EPDK/EMRA) founded on
November 19th, 2001.
License is the permission document given by the EMRA for legal
persons to be able to operate in the market in accordance with
“EML” and “Electricity Market Licensing Regulation”.
Separate licenses are required for each market activity and for each
facility where the activity is carried out.
Types of licenses are:
- Generation License
‐ Auto‐production License
p Generation Activities
‐ Transmission License (TEİAs) Network Licenses
‐ Distribution License
‐ Wholesale License Commercial Activities
‐ Retail Sales License
8
The general licensing procedure is as follows: www.epdk.gov.tr

9. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing P
2 Li i Procedure i EMRA
d in
1- License
application
2- Review and
2 R i d
Evaluation Stage
3- License
3 Li
application deemed
eligible (proper)
by EMRA
4- Granting of License
by EMRA
9 www.epdk.gov.tr

10. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing Procedure in EMRA
All legal entities subject to private law and applying for a license in order
g j p pp y g
to operate in the market, are required to have been established as either
a joint-stock company or a limited liability company in accordance
with the provisions of the Turkish Commercial Code no. 6762.
p
The companies which generate and sell electricity are required to have
granted a “Generation License”.
Generation License .
The companies which generate electricity for their own consumption
must have granted an “Autoproducer License”.
Autoproducer License
In order to be granted a license to operate in the market, the legal
entities shall apply to EMRA by submitting the documents indicated in
the “List of Information and Documents to be submitted during License
Applications”.
These documents are mainly related with the company and the project.
10 www.epdk.gov.tr

11. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing Procedure in EMRA
“List of Information and Documents to be submitted during License
Applications” include:
“A letter of guarantee” (from any approved domestic or foreign banks)
that
th t equals t 10 000 TL per MWm of planned i t ll d capacity
l to 10.000 f l d installed it
“Articles of incorporation” for the applicant company
p pp p y
“Investment appointment program” for the project (projected completion
times for the processes and each subproject)
“Power plant information form” (includes technical details of the project)
“Discrete-scaled maps” showing the plant environment in which the
facilities of the plant are marked appropriately
p pp p y
11 www.epdk.gov.tr

12. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing P
2 Li i Procedure i EMRA
d in
1- License
application
2- Review and
2 R i d
Evaluation Stage
3- License
3 Li
application deemed
to be eligible (proper)
by EMRA
4- Granting of License
by EMRA
12 www.epdk.gov.tr

13. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing Procedure in EMRA
In order the application to be accepted and proceed to the “review
review
and evaluation stage” regarding license applications, all required
documents must be submitted and completed properly.
When all the documents are submitted correctly, on the “review and
evaluation stage”, EMRA shall request the opinions of TEİAS and/or
the distribution licensee in the distribution region wherein the
generation facility is located, regarding the connection to the
transmission and/or distribution system and system use of the
y y
generation facility to be constructed.
When the terms and conditions for the connection of the plant are
e t e te s a d co d t o s o t e co ect o o t e p a t a e
determined, then “the review and evaluation” stage, which is
conducted by the Authority is submitted to the Board and the license
application is “deemed eligible” with a Board decision
deemed eligible decision.
13 www.epdk.gov.tr

14. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing P
2 Li i Procedure i EMRA
d in
1- License
application
2- Review and
2 R i d
Evaluation Stage
3- License
application deemed
eligible (proper)
by
b EMRA
4- Granting of License
by EMRA
14 www.epdk.gov.tr

15. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing Procedure in EMRA
When the legal entity’s application is “deemed eligible” with a Board
decision for obtaining a license, the legal entity is “notified in writing”
that in order to be granted the related license, it must take the
following actions (and the submit the related documents) within 90
days following the Board decision;
1. Amend articles of association as required (so that the articles of
q (
association includes the statements that energy legislations require)
2. Raise the minimum capitals to 20% of the total expected investment
for the generation facility.
3. The remaining part of the “letter of guarantee” that equals;
- 6% of the total investment amount up to the first 10 MW
MW,
- 4% for 10 - 100 MW and
- 2% over 100 MW.
4. Take “Environmental Impact Assessment Report” from the “Ministry
of Environment and Urban Planning” (90-300 days)
15 www.epdk.gov.tr

16. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing P
2 Li i Procedure i EMRA
d in
1- License
application
2- Review and
2 R i d
Evaluation Stage
3- License
application deemed
eligible (proper)
by
b EMRA
4- Granting of License
by EMRA
Permission Commercial
Construction
C t ti
and Approvals Operation
16 www.epdk.gov.tr

17. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing Procedure in EMRA
The legal entity fulfilling the requirements is granted the related
license by a Board decision.
A period of “22 months” is given to the company to receive the
p g p y
necessary permissions and approvals from other governmental and
local institutions for construction (pre-construction period). 18-66
months are given as “construction period” according to the
construction period
capacity and the type of the plant.
Legal entities granted a generation license are obliged to submit
semi-yearly “progress reports” concerning their activities till the
facility completion date (in every January and July).
Excluding the general force majeure and the specific force majeure
defined in the related licenses; if the facility cannot be completed
until the completion date written on the license, the license may be
cancelled by a Board decision.
17 www.epdk.gov.tr

18. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
2. Licensing Procedure in EMRA
• The wind and solar license applications are made in a certain day
pp y
decided and announced by the Board.
• The real persons or legal entities generating electricity for their own
p g g g y
needs and having a capacity of up to 500 kW are exempted from
obtaining a license and establishing a company.
• Issues Subject to Board Approval of EMRA:
Mergers & Acquisitions
Transfer of shares
Assignment of Accounts Receivable
Sell & lease of completed power plants to third parties
p p p p
Restructure of licensed companies & Split offs
Acquisition of right to vote
Allocation of the privilege on existing shares, termination of a
privilege
18 www.epdk.gov.tr

19. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
3. Current Situation on Licences
Application Review and Applications (End of 2011 – Except Public Plants)
Stage Evaluation Stage Deemed Eligible Licensed TOTAL
Total Capacity Total Capacity Total Capacity Total Capacity Total Capacity
Source / Fuel Number (MW) Number (MW) Number (MW) Number (MW) Number (MW)
Wind 4 64,60 14 547,60 87 3.799,10 209 7.464,90 314 11.876,20
Hydro 105 2.704
2 704 126 1.841,09
1 841 09 289 3.496,40
3 496 40 751 18.507,73
18 507 73 1.271
1 271 26.549,21
26 549 21
Fuel-Oil 1 25,32 37 1.227,82 38 1.253,14
Natural Gas 49 17.460,17 42 11.700,19 37 7.989,52 275 20.630,56 403 57.780,43
Lignite
g 3 1.282 2 502,66 29 1.638,55 34 3.423,21
Anthracite 5 2.891,64 5 1.416,55 4 1.684,59 20 8.206,28 34 14.199,06
Asphaltite 1 135 2 675 3 810
Geothermal 4 66 4 84 17 363,97 25 513,97
Waste Gas 1 4,02 6 108,67 7 112,70
Biogas 4 10,53 3 4 4 28,75 13 21 24 64,28
Biomass 5 41,21 4 40,25 4 30,27 5 16,16 18 127,89
Pyrite 1 11,50
11 50 1 11,5
11 5
Naphta 2 19,40 2 19,4
LPG 2 15,55 2 15,55
Nuclear 1 4.800
4 800 1 4.800
4 800
TOTAL 181 26.524,17 201 20.936,34 427 17.188,94 1.369 58.907,07 2.180 121.556,52
Number of Licences Granted with respect to Energy Sources (MW) (2011)
19 www.epdk.gov.tr

20. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
3. Current Situation on Licences
Installed
I t ll d
Ratio
Source Capacity Installed Capacity (MW, September 2012)
(%)
(MW)
Hydro
N t
Natural G *
l Gas* 19.558,0
19 558 0 35,30
35 30 33,95%
Hydro 18.811,0 33,95
Coal* 12.522,0 22,60
Thermal
Wind 2.001,0
2 001 0 3,61
3 61 (Natural Gas)* Thermal (Coal) *
hermal (Coal)
Fuel-Oil / 35,30% 22,60%
1.948,0 3,52
Diesel*
Biowaste / 115 0
115,0 0 21
0,21
Biogas Wind
Fuel‐Oil / 3,61%
Geothermal 114,0 0,21 Other
0,60% Waste/Biogas Geothermal Diesel*
Other
Other* 332,0 0,60 0,21%
0 21% 0,21%
0 21% 3,52%
TOTAL 55.401,0 100
Installed Capacity with respect to Energy Sources (MW) (September 2012)
20 www.epdk.gov.tr

21. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
3. Current Situation on Licences
Capacity Under
p y
Number of Ratio
Source Construction
Plants (%)
(MW)
- Hydro 278 7.438,78 39,06
- Natural Gas 25 6.212,88 32,62
- Imported Coal 2 1.570,42 8,25
- Wind 35 1.531,65 8,04
-CCoal / Lignite / Fuel O
Oil 7 1.560,01
1 560 01 8,19
8 19
- Asphaltite 1 413,25 2,17
- Geothermal 6 192,50 1,01
- L dfill G (LFG)
Landfill Gas(LFG) 3 80,50
80 50 0,42
0 42
- Waste Heat 3 32,50 0,17
- Pyrolytic Oil / Gas 1 8,00 0,04
- Bi
Biogas 3 4,37
4 37 0,02
0 02
* TOTAL 364 19.044,86 100,00
Plants under Construction with respect to Energy Sources (MW) (2012)
21 www.epdk.gov.tr

22. Licensing Procedure in Turkish Electricity Sector; General
Framework and Current Status
FINAL COMMENTS
• The liberalization movement in Turkish electricity sector, which
y ,
began in 2001 still continues.
• The state owned generation company EÜAS is still the largest
electricity generation company in the market, but with the
privatization of state owned distribution and generation assets, the
final stage will be reached in the process of establishing a
competitive electricity market envisioned in the EML.
• The dominant capacity consists of thermal and hydro power. But
there is a big potential in wind, solar, geothermal and hydro.
Licensing activities rapidly continues for every energy source.
g p y y gy
• In parallel with the implementation of regulations and high increases
in the electricity demand (about 7 5% per annum) the electricity
7,5% annum),
sector has the capacity to attract more investors to the sector.
22 www.epdk.gov.tr

23. Licensing Procedure in
Li i P d i
Turkish Electricity
Sector; General
S t G l
Framework and Current
Status
St t
İskender Basat SAHİN
Energy Expert - EMRA
isahin@epdk.org.tr
isahin@epdk org tr
THANK YOU...