1) Why “energy storage licensing” in Turkey is not a single license
In Turkey, energy storage is regulated as a set of legally distinct models, each with different permissions, grid-connection rules, settlement treatment, and compliance risks. The phrase “energy storage license” is often used in the market, but in practice you will usually fall into one of these legal pathways:
- Storage integrated into a licensed generation facility (e.g., adding BESS to an existing RES/GES/hydro plant)
- Storage-integrated generation facility (a generation plant built with storage as a mandatory interface for injection)
- Stand-alone (independent) storage facility established under a supply license or an aggregator license
- Behind-the-meter storage integrated into a consumption facility (consumer-side storage)
- Storage established by license-exempt generation (newly clarified with strict payment consequences for certain injected energy)
All of these sit under the Electricity Market Storage Activities Regulation (Elektrik Piyasasında Depolama Faaliyetleri Yönetmeliği) and its amendments, including a major amendment package published in the Official Gazette dated 29 December 2025 (No. 33122) which entered into force on 1 January 2026. (LEXPERA)
If you choose the wrong model (or structure the right model incorrectly), you can face outcomes that investors and lenders treat as “fatal”: non-payment of expected revenues, inability to participate in balancing/ancillary services, grid disconnection in safety cases, or regulatory enforcement that blocks the asset’s commercial use. (LEXPERA)
2) Core legal sources you must build your project around
A) Storage Activities Regulation (consolidated)
The Regulation defines which storage activities exist and how they can be established and connected—covering, among others, (i) integrated storage at generation facilities, (ii) integrated storage at consumption facilities, (iii) stand-alone storage, and (iv) storage installed by grid operators. (LEXPERA)
B) 29 December 2025 amendment package (Official Gazette No. 33122)
The 33122 package sharpened the legal and technical “rails” for storage—especially around:
- connection configurations (annexes),
- availability/“ready-to-operate” (emre amade) status for storage inside storage-integrated generation,
- settlement assumptions (which energy is treated as injected/withdrawn first),
- caps and “free contribution” consequences for certain energy injections, and
- alignment with balancing and ancillary service participation rules. (LEXPERA)
C) Balancing market timeline: move to 15-minute settlement
Turkey has also confirmed the transition to 15-minute settlement in the balancing power market, with infrastructure preparations to be completed by 1 January 2027. This affects storage value and compliance because shorter settlement intervals can both increase opportunity and increase data/operational scrutiny. (Anadolu Ajansı)
3) The five storage models and what they mean legally
Model 1 — Storage integrated into an existing licensed generation facility
A generation license holder may install an integrated storage unit in line with the Regulation’s conditions. Critically:
- Energy drawn from the grid and injected back through the storage unit does not benefit from any support mechanism or purchase guarantee tied to the generation facility; and
- Storage losses are not remunerated under support schemes. (LEXPERA)
In other words: even if your plant benefits from a support mechanism, you must model storage economics separately and avoid “double counting” support revenues.
The Regulation also requires that the integrated storage unit be registered as a separate settlement injection/withdrawal unit—a point that matters for metering, reconciliation, collateral exposure, and dispute handling. (LEXPERA)
Model 2 — Storage-integrated generation facility (storage is the mandatory injection interface)
This is a stricter architecture. The Regulation states that energy produced in storage-integrated generation facilities must be delivered to the transmission/distribution system via the storage unit, and if the facility is built according to the defined connection configuration, injected energy is treated as injected through the storage unit. (LEXPERA)
This model is often chosen when the project is designed to provide firmed output, manage curtailment exposure, or pursue balancing/ancillary revenues with a clearer operational interface. It also increases compliance sensitivity: your “as built” connection and metering must match the annex configuration, and the grid operator must be able to track operational status in a way that supports settlement. (LEXPERA)
Model 3 — Stand-alone (independent) storage under a supply or aggregator license
This is the closest thing to what the market calls a “storage license,” but the Regulation frames it differently:
- You must hold a supply (tedarik) license or an aggregator (toplayıcı) license, and
- The stand-alone storage facility must be at least 2 MW installed power, and
- Energy injected to or withdrawn from the system is included in the relevant market participant’s settlement injection/withdrawal volumes. (LEXPERA)
Additional rules introduced/clarified by amendments include:
- The connection must follow annexed configurations. (LEXPERA)
- The facility’s injected energy per settlement period cannot exceed what accepted installed power can deliver; excess is treated as produced by the “supplier of last resort / designated supplier” as a free contribution to YEKDEM (a non-payment consequence that can destroy a naive arbitrage model). (LEXPERA)
- If the stand-alone storage meets ancillary service requirements, it can participate in ancillary services, and if it qualifies as a balancing unit, it can participate in the balancing power market. (LEXPERA)
Model 4 — Behind-the-meter storage integrated into a consumption facility
The Regulation allows consumers to install storage provided that (among other conditions):
- the grid operator gives a favorable connection opinion,
- the storage installed power does not exceed the contract power in the consumption facility’s connection agreement,
- it is at the same measurement point. (LEXPERA)
This model is typically used for demand management, resilience, and internal optimization—not for exporting energy. The Regulation is explicit that when energy is injected into the grid from consumption-integrated storage, that energy is not counted in the supplier’s settlement injection volumes, and the storage is only for the consumption facility’s needs. (LEXPERA)
Model 5 — Storage installed by grid operators (distribution companies / TEİAŞ)
Distribution companies may install storage within investment plans (subject to Board approval and a benefit-cost demonstration) and cannot use it outside distribution activity; TEİAŞ may install pilot storage non-commercially within investment plans. (LEXPERA)
This matters for investors because grid-operator storage can influence congestion management, curtailment patterns, and the commercial value of private storage—especially as Turkey modernizes balancing and settlement intervals. (lbfpartners.com)
4) A decision tree: “Which regulatory path fits my business model?”
You likely need an integrated storage approach (Model 1 or 2) if:
- you already own or are acquiring a licensed generation asset (RES/GES/hydro/biomass),
- you want to reduce imbalance exposure, manage curtailment, or firm output,
- your revenue stack relies on combining generation with storage control.
You likely need a stand-alone approach (Model 3) if:
- your core activity is trading, balancing, or providing flexibility services,
- you want portfolio optimization across assets,
- you can hold (or already hold) a supply or aggregator license and can meet the 2 MW minimum per facility. (LEXPERA)
You likely need behind-the-meter storage (Model 4) if:
- you are an industrial/commercial consumer optimizing peak demand and resilience,
- exporting energy is not the core economics,
- compliance simplicity and safety are priorities. (LEXPERA)
5) Step-by-step regulatory process in Turkey (what a bankable workflow looks like)
Below is an investor-grade workflow that aligns legal, technical, and finance tasks.
Step 1 — Regulatory classification memo (before you spend serious capex)
Create a short written classification that answers:
- Which model applies (integrated, storage-integrated generation, stand-alone, behind-the-meter)?
- Which license is required (generation license amendment vs supply/aggregator license structure)?
- Which settlement consequences apply (non-payment of storage losses, caps, “free contribution” outcomes)?
- Which connection annex configuration applies?
This memo becomes your “single source of truth” for lenders, EPC contractors, and internal governance.
Step 2 — Corporate structuring and governance (make it lender-ready without triggering regulated “control” issues)
Storage projects attract project finance and structured equity. Your corporate governance should anticipate:
- share pledges and account pledges required by lenders,
- step-in mechanisms,
- change-of-control covenants.
In Turkey’s electricity market, structural changes can become regulated events depending on license type and stage. Even where your immediate topic is storage, transaction structuring must be coordinated with the licensing framework to avoid approvals becoming a closing bottleneck.
Step 3 — Grid connection pathway (TEİAŞ vs distribution company)
Grid connection is where storage projects often become “non-projects.” Regardless of model, you need:
- the correct connection point and technical feasibility,
- a configuration consistent with the Regulation’s annex framework (especially after 33122),
- metering architecture that can distinguish generation vs storage injection/withdrawal where required.
For consumption-integrated storage, the Regulation explicitly ties permission to a favorable connection opinion and contract-power limits. (LEXPERA)
Step 4 — License application or license amendment filing (and timing control)
Depending on model:
- Integrated storage in a generation plant often proceeds through a license amendment / modification route, combined with grid connection approvals and acceptance documentation.
- Stand-alone storage is established under a supply or aggregator license (and must meet the 2 MW minimum per facility). (LEXPERA)
At this stage, the real work is not “submitting documents.” It is building a file that is coherent across:
- technical specs,
- one-line diagrams / annexed configuration compliance,
- ownership and control disclosures,
- connection and system-use steps,
- safety and acceptance planning.
Step 5 — Environmental and permitting alignment (don’t let permitting contradict your licensing file)
Storage facilities often have smaller physical footprints than generation plants, but they still raise:
- zoning/building permit questions,
- fire safety and hazardous material compliance,
- (sometimes) EIA screening depending on the project’s overall configuration and location.
Your safest approach is to ensure that permitting documents do not contradict your grid connection file and license documentation.
Step 6 — Acceptance testing, tolerances, and “ready-to-operate” discipline
The Regulation applies a 10% tolerance in acceptance of storage units/facilities, and it defines “ready-to-operate” status for storage inside storage-integrated generation facilities as being operable in line with the annexed connection configuration. (LEXPERA)
This is not a technical detail; it is a compliance deliverable. If you want market participation (balancing/ancillary) and predictable settlement, acceptance and operational status must be auditable.
Step 7 — Market registration and settlement architecture (separate units, clear attribution)
For integrated storage and storage-integrated generation, the Regulation requires storage to be registered as a separate settlement injection/withdrawal unit. (LEXPERA)
For stand-alone storage, injected and withdrawn energy is counted in the market participant’s settlement volumes, and caps apply to avoid excess injections being treated as “free contribution” energy. (LEXPERA)
This is where metering, SCADA/data integrity, and settlement governance become “legal risk control,” not just back-office work.
Step 8 — Operations and revenue stacking (balancing + ancillary services)
Both integrated and stand-alone storage models can participate in ancillary services (if conditions are met) and in the balancing power market (if the unit qualifies as a balancing unit). (LEXPERA)
With the planned move to 15-minute settlement by 1 January 2027, operational discipline and data accuracy become even more valuable—and more enforceable. (lbfpartners.com)
6) Settlement treatment: the legal rules that can make your revenue “disappear”
A) Storage losses are not paid under support mechanisms
For integrated storage and storage-integrated generation, energy drawn from the grid and re-injected and storage loss energy are outside any incentive or purchase guarantee tied to the generation output, and “no payment is made” for the loss component. (LEXPERA)
B) Presumptions on injection/withdrawal priority (important for mixed operation)
For storage-integrated generation and integrated storage, the Regulation introduces a settlement presumption: if there is system withdrawal and the storage has withdrawal in that period, withdrawal is treated as first by storage; similarly for injection, if storage has injection in that period, injection is treated as first by storage. (LEXPERA)
This can affect revenue allocation in PPAs, tolling structures, and internal accounting—so your contracts must reflect this “regulatory reality.”
C) Caps and “free contribution” consequences
For stand-alone storage, injected energy per settlement period cannot exceed what the accepted installed power can deliver; excess is treated as produced by the designated supplier as a free contribution to YEKDEM—a non-payment result for the storage operator. (LEXPERA)
7) Key legal risks (and how sophisticated projects mitigate them)
Risk 1 — Choosing the wrong model (and discovering it only at settlement)
Mitigation: finalize the regulatory classification memo early and reflect it in all documents (grid, permits, EPC scope, finance term sheet).
Risk 2 — “As built” configuration does not match annex requirements
Mitigation: include annex-compliance as an EPC condition precedent and require an independent technical/legal sign-off before energization.
Risk 3 — Non-payment of expected revenue due to storage attribution problems
Mitigation: design metering so that storage injection/withdrawal and generation output are clearly distinguished where required; implement internal settlement review with objection readiness.
Risk 4 — Missing out on balancing/ancillary revenues due to qualification gaps
Mitigation: build qualification requirements into O&M and asset management scopes; plan for the move to 15-minute settlement and the data burden it implies. (lbfpartners.com)
Risk 5 — Safety compliance and grid disconnection
The Regulation allows grid operators to take measures—including disconnection—without prior notice in cases that threaten life/property safety or system security until the situation is remedied. (LEXPERA)
Mitigation: fire safety engineering + documented compliance + maintenance and incident logs.
8) Contract stack: what investors and lenders expect to see
EPC / supply contracts
Storage needs performance-driven drafting, not generic equipment terms:
- usable capacity, degradation curves, round-trip efficiency,
- response time and availability metrics,
- acceptance test protocol aligned with “ready-to-operate” and settlement assumptions,
- warranties that survive supply chain issues,
- safety and cyber obligations for control systems.
O&M / asset management
A strong O&M scope for storage should include:
- regulatory compliance management,
- dispatch/charge-discharge governance,
- settlement verification and disputes handling,
- evidence retention (logs, meters, event reports).
Revenue agreements (PPA, tolling, optimization agreements)
Contracts must clearly allocate:
- who controls dispatch decisions,
- who bears imbalance and settlement correction risk,
- how regulatory presumptions on injection/withdrawal priority affect billing, and
- how non-paid loss energy is treated economically.
9) Due diligence checklist for investors (buy-side and lender-side)
When reviewing a Turkish storage project, a robust diligence list includes:
- Model confirmation: integrated vs storage-integrated vs stand-alone vs behind-the-meter
- License position: correct license basis (generation amendment vs supply/aggregator) and 2 MW minimum for stand-alone facilities (LEXPERA)
- Grid package: connection opinion/agreements, annex-aligned configuration, metering design
- Settlement architecture: separate settlement units where required; caps and “free contribution” exposure (LEXPERA)
- Market participation readiness: balancing/ancillary qualification plan; 15-minute settlement readiness (lbfpartners.com)
- Safety & permitting: zoning/building, fire safety, insurance alignment
- Contract stack: EPC warranties, O&M compliance scope, revenue allocation clauses
- Change in law protection: clauses that allocate regulatory change risk (especially given rapid amendments)
Conclusion: storage projects succeed in Turkey when legal design matches operational reality
Turkey’s storage framework has matured into a rule-driven system that clearly differentiates models, ties them to licensing pathways, and embeds settlement consequences that directly affect revenues. Stand-alone storage requires a supply or aggregator license and a minimum 2 MW installed power per facility, while integrated storage and storage-integrated generation impose strict settlement and non-payment rules for certain energy flows and storage losses. (LEXPERA)
With the market moving toward 15-minute settlement by 1 January 2027, storage value will increasingly depend on data accuracy, dispatch discipline, and compliance readiness—not only on battery technology. (lbfpartners.com)
If you design the project around the correct model, ensure annex-compliant connection and metering, and draft a contract stack that mirrors regulatory settlement logic, storage can become an investor-grade asset class in Turkey.
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