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Parted Ways in the Electric Power Generation

It is predictable fact that energy especially electric demand in Turkey, whose demand for energy rapidly increased within the OECD countries, will be increased more in the near future. (EIA 2014) Undoubtedly that, this increase in demand for energy, necessitates an investment in energy sector and diversifies the current energy resources. Within this framework, importance of renewable energy resources and electricity production from these resources will be increased.

On 30th of March 2013, 6446 numbered Electricity Market Law act came into force and it legalized production matters of the electricity. This act presented two different production option as “Licenced and “ Unlicensed”, however, they leave this optional decision in line with the requirement of supplier/ investor. Another related primary act is “ 5346 numbered Usage of Electrical Energy production of renewable energy resources ”. For unlicensed electric production, there is a detailed regulation dated 2nd of October 2013, “ Regulation of Electricity Production in the electricity market “ and (for implementation of this regulation) also there is a “ Disclosure”. On 2nd November 2013 “Licensed Regulation” regulated the licenced energy production matters in detail.

Following the 6446 numbered act, concerning “ Licenced production” matters, first applications received for “ Electric production based upon Solar Energy” between the dates of June 10-14 2013. However, from then till now, this process did not finalized yet. Applications for wind energy will be received in the forthcoming term. By contrast with licenced production, there is a rapid increasement in the unlicensed production. Investors mostly preferred recourse of solar.

In fact, related with application of licenced electric production, there is a document prepared by Association of Licenced electric production (LI-DER), towards within the data received from 21 EDAS. This data demonstrates that, among the 1184 positive application, application of solar energy production is %74 per cent.

Thus, what is the meaning of unlicensed electric production? What sort of opportunities it provides for electric producers or is it possible to take the place of licenced electric production?

Unlicensed electric production, which allows the electric production, is based upon a system that “fulfils the subscribers own need”. To compare with licenced production, unlicensed production is based upon a system, which decreased the formalities and procedures. Any electricity subscriber, without obtaining a licence and without any duty to establish a company, without discriminating real or legal personality, sole condition is to be an electricity subscriber, can build an electricity production facility and have the opportunity to produce his or her own electricity and also after the production facility become part of an activity (after temporary admission), subscriber can transfer this facility to the 3rd person.

Off- grid systems are under the condition to not supply the electricity to the network, which they produced. For one production facility, it is possible to build unlicensed electricity production facility with unlimited capacity (without any 1 MW limit), for the producers who are willing to give the electricity to the network that they oversupplied. The installed capacities upper limit is 1 MW.

On-grid systems are under the condition to not expand the 1 MW limit of installed capacity. For one production facility, which based on one renewable energy recourse (for example only solar energy) or more than one renewable energy recourses (if there is enough capacity inside the distribution system, with the combination of solar, wind and hydraulic energy, or based upon different renewable energy recourses), unlicensed electricity production facility can be established.

Thereby, the oversupplied electricity can be given to the system (to the related distributor company), and also within the YEKDEM mechanism, per unit for kWh for the oversupplied electricity, which is given to the system, can take the advantage of encouragement remuneration for 10 years. That encouragement remuneration is mentioned in the YEK Act Appendix Table 1, which is equivalent to the support payment. What will happen after 10 years is still ambiguous.

Moreover, in this unlicensed production facility, if the usage of local components (panel, glass ext.) rate is at least % 55, according to the YEK Act Appendix Table 11, which mentioned support payment of local component, it is possible to take the advantage for 5 years start from the set up date of facility.

As to the off-grid unlicensed system, it is not possible to take advantage of YEKDEM mechanism and supply the excessive consumption into the system. Furthermore, distinct from licenced production, without considering on-grid/ off-grid, within the extent of licenced production, electricity commerce in other words electricity sale to the 3rd person through bilateral agreement is forbidden by law.

It is unknown that whether or not this unlicensed production takes the place of licenced production, but within the frame of law, possibility of transition from licenced production to unlicensed production, to take into consideration the application of solar which did not finalized yet and to take into consideration the investor’s cost and time factors, beyond any doubt, the increasement in those projects will be more in the near future.