1. LICENSE REQUIREMENT AND LEGAL CHARACTER

1.1 The Concept of License

In order to engage in any activity within the electricity market (such as generation, transmission, distribution, supply, etc.), it is mandatory to obtain a license in advance, which is an administrative permit issued by public authority and qualifies as a regulatory administrative act.

According to Article 4 of Law No. 6446, operating in the electricity market without a license is unlawful and subject to administrative sanctions (including monetary fines, suspension of activity, etc.).

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2. TYPES OF LICENSES AND LEGAL REQUIREMENTS

2.1 Licenses Based on Electricity Market Activity Types

a) Generation License

Granted to legal entities that intend to establish and operate electricity generation facilities.

Legal Requirements:

• Must be organized as a commercial company,
• Must complete the connection opinion and project approval processes,
• Must submit an activity schedule for the investment period.

b) Distribution License

Granted with exclusive authority to companies operating in regional distribution areas tendered by EPDK (Energy Market Regulatory Authority).

c) Supply License

Granted to companies that intend to procure and sell electricity either on a wholesale or retail basis. This license authorizes sales to end users.

d) Organized Industrial Zone (OIZ) Distribution License

Granted to the legal entity of the OIZ for distribution services within the organized industrial zone.

e) Transmission License

Granted only to TEİAŞ (Turkish Electricity Transmission Corporation) for high-voltage electricity transmission throughout the country. This is a monopoly area.

f) Market Operator License

Granted to EPİAŞ (Energy Markets Operating Corporation), which is responsible for operating the electricity market.

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3. LICENSE APPLICATION PROCESS AND ADMINISTRATIVE PROCEDURE

3.1 Application Procedure

Applications are submitted to EPDK in written or electronic form.

Required Documents:

• Application form and declarations,
• Commercial registry documents of the company,
• Technical evaluation reports,
• Investment program and financial feasibility,
• Connection opinions (from TEİAŞ/TEDAŞ).

3.2 EPDK Assessment

EPDK evaluates the application from technical, financial, and legal aspects.
In case of deficiencies, the applicant is granted time to complete them.
If the evaluation is positive, a license is granted by decision of the EPDK Board, which constitutes an administrative act.

3.3 Legal Effects of the License

• Valid for a definite term (maximum of 49 years),
• Transfers, pledges, mergers, etc., require Board approval,
• Specific obligations may be imposed based on the type of activity (e.g., investment timelines, environmental obligations, reporting duties).

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4. UNLICENSED ELECTRICITY GENERATION

4.1 Legal Framework

Under Article 14 of Law No. 6446 and the relevant regulation, real and legal persons may generate electricity without a license, subject to certain conditions.

4.2 Conditions

• The installed capacity of the facility must be below the legal threshold,
• If connected to the grid, a connection and system usage agreement must be executed with the distribution company,
• Technical processes such as project approval and provisional acceptance must be completed.

-Unlicensed producers may not engage in electricity trade on the market; surplus electricity may only be sold to the relevant supply company.

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5. PERMITTING AND AUTHORIZATION PROCESSES

Obtaining a license alone is not sufficient to commence investment. The establishment of the relevant facility also requires additional administrative permits:

• Environmental Impact Assessment (EIA) Positive Decision or Exemption Document (Ministry of Environment),
• Zoning Plan Approval and Construction Permit (Municipality or Provincial Special Administration),
• Connection Agreement and Technical Approvals (TEİAŞ/TEDAŞ),
• Permissions for Use of Public Land, if applicable.

These processes are generally carried out simultaneously and impose reporting obligations to EPDK throughout the investment period.

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6. SANCTIONS AND SUPERVISION

EPDK has the authority to supervise companies holding licenses.

In case of violations of the legislation, the following sanctions may be imposed:

• Administrative fines,
• Suspension of activities,
• Revocation of the license
  pursuant to Articles 16–17 of Law No. 6446.

Conclusion

Navigating the licensing and permitting procedures in Turkey is a critical step for energy companies seeking to operate legally and efficiently in the country’s dynamic energy market. Compliance with the regulations set forth by the Energy Market Regulatory Authority (EPDK) and other relevant authorities ensures not only legal security but also fosters sustainable and responsible investment.

Energy companies must be diligent in understanding the specific license types, application requirements, and administrative processes. Additionally, securing all necessary environmental, zoning, and technical permits alongside the license is essential for successful project implementation.

Given the complexity and evolving nature of the regulatory framework, seeking expert legal and technical advice is highly recommended to mitigate risks and streamline the investment process. By adhering to these procedures, energy companies can contribute effectively to Turkey’s energy landscape while ensuring regulatory compliance and operational excellence.