Energy Projects in Turkey 

Energy Production Incentives, Laws & Regulation

 

There are many advantages to set up and invest within the Energy Sector in Turkey

 

Turkish electricity market is one of the fastest growing in the world with an average rate of 8% per year. With a significant increase in the energy consumption over the last decade and projected to double the primary energy demand over the next 10 years. The Turkish Government has put an emphasis on incentivizing renewable energy based electricity generation.

 

Thanks to its natural assets, Turkey is in an advantegous position to meet its targets including increasing the installed capacity of renewable energy based power production with wind and solar projects Geo thermal and Hydro  in particular – in the coming decades.

 

Here are just some of Turkey’s renewable energy targets for implementation by 2023

 

• Increase the installed power to 120,000 MW

• Increase the share of RES from 25 to 30%

• Increase the installed wind-power capacity to 20,000 MW (current installed capacity: 3,629 MW)

• Install power plants with 3,000 MW of solar energy

• Extend the electricity transmission line to 60,717 km

• Expand the use of smart grids

• Extend the power distribution unit capacity to 158,460 MVA

 

There are many financial and investment incentives for International Renewable Energy companies provided through the government or local municipality and our International Legal Teams can assit in guding you through the process, to recieve the most benefit for your business. 

 

Incentives to invest in Renewable Energy Electricity Generation

 

• Feed-in Tariffs: Available for the first ten years for the sale of electricity produced in a RES based facility.

• Domestic Component Bonus: Added to the feed-in tariffs based on the use of domestically produced mechanical and elelctromechanical components as listed in the applicable legislation; available for the first five years after the project commences operations.

• Discounted licensing fee: Legal entities applying for pre-licenses and generation licenses are required to pay only 10% of the total licensing fees.

• Exemption from payment of annual licensing fees for the first 8 years of operation: Generation facilities are exempted from paying annual licensing fees for the first 8 years of operation.

• Priority for system connection: When forming a decision based on all applications to connect to the distribution network, EMRA gives priority to RES generation facilities.

• Exemption from being a balancing mechanism unit: An option to be exempt from liability as a balancing mechanism unless a facility chooses to be registered as such.

• Option to purchase electricity from the market: Up to 40% of the annual average generation amount indicated in the license within one calendar year may be purchased from the market to meet contractual obligations.

• Exemption from licensing & establishing a company: RES power plants with a maximum capacity of 1 MW are exempt from establishing a legal entity as well as from obtaining a generation license from EMRA in order to enter the electricity market.

   

  Following amendements made to the Renewable Energy Law implemented in 2005, starting in 2011 and continuing until present, a new support mechanism with a linkage to the day-ahead electricity trading market has been introduced. With new feed-in tariffs that are set to U.S. dollars.

 

Applicable Legislation:

 

• Electricity Market Law, No. 6446 (14.03.2013) (“The New EML”)

• Law on Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy, No. 5346 (10.05.2005) (“Renewable Energy Law”)

• Law Amending the Law on Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy (No: 6094) (08.01.2011) (“Amendment to the Renewable Energy Law”)

• Law on Soil Preservation and Land Utilization (No: 5403) (19.07.2005)

• Law Amending the Law on Soil Preservation and Land Utilization (No: 6537) (26.03.2008)

• Electricity Market License Regulation (02.11.2013) ("Licensing Regulation")

• Regulation on the Unlicensed Electricity Generating in Electricity Market (02.10.2013) ("Unlicensed Electricity Regulation")

• Communiqué on the Application of the Regulation on Unlicensed Electricity Generation (02.10.2013) (“Unlicensed Electricity Communiqué”)

 

Our extensive Legal knowledge and years of experience within the Energy sector, gives us the the ability to provide the right advice and legal representation to Corporations, Companies and Investors, from project implementation, due dilligence, regulatory complience project finance, risk assesment through to electricity distribution in Turkey. This has made us the first choice legal partner for some of the largest Energy Sector players in Turkey and Internationally. We offer a full range of legal services, including risk analysis and management to foreign companies and individuals who are willing to invest and establish themselves in the Turkish renewable energy market or expand their existing business operations.

 

We provide the legal protection and advice needed for the successful implementation of every Energy project by:

 

• Advising on Investments, financial and contractual matters,

• Providing representation and advice for the setting up of your company/subsidiary/representative office in Turkey

• Pre-investment due dilligence for a merger, acquisition or joint venture within the Energy Sector.

• Dealing with state regulatory authorities in obtaining the various permits, licences and authorizations required for your project, including clearances from the Turkish Competition Authority for any applicable Merger or Acquisition.

• Market research, assessment and analysis

• Specialist Industry Sector lawyers and international legal counsel, with commercial awareness, linguistic skills and expertise

• Full up to date knowledge of all Laws and Regulations concerning the Energy Sector within Turkey and abroad.

• Representation for clients in Dutch, English, French, German, Italian, Kazakh, Chinese, Russian, Spanish, Turkish and Ukrainian

• Professional, reliable and cost effective approach to every project

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For more Information about the Energy Sector in Turkey, please consult a member of our International Legal Teams