Demand for renewable energy sources in Turkey has risen rapidly in recent years. Wind energy, in particular, offers significant potential to investors thanks to Turkey’s geographical advantages and favorable climate. However, entrepreneurs aiming to establish a wind energy company must meticulously follow numerous legal, procedural, and operational requirements. This article provides a comprehensive review of the legal framework, establishment and licensing procedures, technical requirements, tax incentives, and practical challenges involved in founding a wind energy company in Turkey.
1. Legal and Regulatory Framework
The wind energy sector in Turkey is mainly regulated by the following laws:
- Electricity Market Law (No. 6446)
- Renewable Energy Law (No. 5346, YEK Law)
- Energy Market Regulatory Authority (EMRA/EPDK) Regulations
- Environmental Law and related secondary legislation
- Turkish Commercial Code (No. 6102)
All market participants must comply with these statutory requirements. The Energy Market Regulatory Authority (EMRA/EPDK) is the principal authority responsible for licensing, regulation, and supervision in the energy sector.
2. Company Formation and Commercial Structure
Wind energy investments are typically realized through a Joint Stock Company (A.Ş.) or a Limited Liability Company (Ltd. Şti.). For large-scale projects, the joint stock company structure is often preferred for easier share transfers and financing. The main steps for company formation include:
- Determining Company Name: The company’s objective, namely wind energy generation, should be clearly stated in the articles of association.
- Drafting and Notarizing the Articles of Association: The articles must detail wind energy as the primary business activity.
- Capital Commitment: Minimum capital is 50,000 TL for Ltd. Şti. and 250,000 TL for A.Ş.
- Trade Registry Registration: The company must be registered with the relevant Chamber of Commerce at its principal address.
- Tax and Social Security Registration: Tax number is obtained, and Social Security registration is completed if employees are to be hired.
After company establishment, additional permits and licenses are required for energy market activities.
3. Required Permits and Licenses for Wind Energy Investments
a) Licensed and Unlicensed Electricity Generation
- Unlicensed Generation (under 1 MW): Projects with an installed capacity up to 1 MW do not require an EMRA license; however, application to the local distribution company and a grid connection agreement are mandatory. This model is ideal for self-consumption.
- Licensed Generation (1 MW and above): For industrial-scale wind farms, both a pre-license and a generation license from EMRA are required.
b) Pre-License Application and Required Documents
- Company and Authorization Documents
- Project Site and Land Ownership Documents: Land ownership or usage rights must be documented.
- Technical Feasibility Report
- Financial Capability and Bank Guarantee Documents
- Environmental Impact Assessment (EIA) Process: Depending on project scale, an “EIA Not Required” or “EIA Positive” decision must be obtained.
c) Generation License and Subsequent Steps
After successfully obtaining a pre-license, the investor must complete the following steps within a set period to receive a generation license:
- Finalize land allocation and title deeds
- Conclude transformer and grid connection agreements with TEİAŞ or the relevant distribution company
- Achieve financial closure (e.g., bank loan agreements)
- Prepare detailed project designs and obtain building permits
4. Technical and Operational Requirements
For successful wind energy projects, technical steps must be meticulously managed:
- Wind Measurement Studies: At least one year of wind data must be collected at the project site before EMRA application.
- Turbine and Equipment Selection: All equipment must comply with national and international standards.
- Construction and Installation: The process begins with a local building permit.
- Grid Connection: Transmission lines and grid connection points are formalized with TEİAŞ or the distribution company.
5. Investment Incentives and Tax Advantages
Turkey provides various incentives for renewable energy investments:
- VAT Exemption: Wind turbines and equipment are exempt from import duties and VAT.
- Investment Incentive Certificate: Benefits include VAT refunds, social security premium support, and corporate tax reductions.
- Renewable Energy Support Mechanism (YEKDEM): Provides guaranteed government purchase and fixed tariff for a set period.
6. Foreign Investors and Ownership Rights
Foreign individuals and companies can establish and fully own wind energy companies in Turkey. However, additional permits are required for projects located on agricultural or forest land. All incentives and requirements apply equally to foreign-invested companies.
7. Contracts, Legal Risks, and Dispute Resolution
- EPC (Engineering, Procurement, and Construction) Contracts: Engineering and installation works should be contractually defined in detail.
- Power Purchase Agreements (PPA): These are signed with the distribution company or private consumers for electricity sales.
- Arbitration and Litigation: Disputes often refer to the Istanbul Arbitration Center or International Arbitration.
- Administrative Fines and License Cancellations: Non-compliance detected during EMRA inspections may result in severe administrative penalties.
8. Environmental and Social Impact
- EIA Reports and Public Consultation: The project’s impact should be explained to the local community, and objections during the EIA process should be addressed.
- Wildlife and Land Use: The effects on biodiversity and wildlife must be assessed in line with national and international standards.
9. Post-Establishment Obligations
Wind energy companies have ongoing obligations, including:
- Annual activity and financial reporting to EMRA
- Compliance with environmental standards in power generation
- Adherence to energy market and tax regulations
- Ensuring occupational health and safety standards for employees
10. Common Practical Problems and Solutions
- Land acquisition and zoning issues
- Delays in grid connection
- Difficulties in securing financing and bank guarantees
- Rejection of license applications due to incomplete documentation
- Local opposition and litigation
Such challenges can be minimized with strong legal and technical consultancy at early stages.
Conclusion
Establishing a wind energy company in Turkey is a long-term process that encompasses technical, administrative, and legal stages. With the right strategy, full legal compliance, professional consultancy, and a sustainable business model, both domestic and foreign investors can seize significant opportunities. It is essential to draw a clear roadmap and minimize legal risks by consulting specialists in wind energy investments.
INTERN LAW FACULTY STUDENT
YAĞMUR YORULMAZ
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