Electricity generation is one of the most regulated sectors in Turkey due to its strategic importance and critical infrastructure role. Any company that intends to generate and sell electricity must obtain an electricity generation license from the Energy Market Regulatory Authority (EPDK). This license ensures that the generation facility complies with technical, environmental, and safety standards and operates within the competitive market framework.
This article explains the legal framework, the licensing procedure, eligibility criteria, required documents, and potential challenges in obtaining an electricity generation license in Turkey.
1. Legal Framework
The primary laws and regulations governing electricity generation licensing in Turkey are:
- Electricity Market Law No. 6446: Defines the structure of the electricity market and licensing requirements.
- Renewable Energy Law No. 5346: Encourages the use of renewable energy sources through incentives such as YEKDEM (Renewable Energy Resources Support Mechanism).
- Environmental Law No. 2872: Imposes environmental compliance requirements, including Environmental Impact Assessment (EIA) obligations.
- Occupational Health and Safety Law No. 6331: Establishes safety standards for energy facilities.
- EPDK Licensing Regulation: Details the application, issuance, renewal, and cancellation of electricity generation licenses.
2. What Is an Electricity Generation License?
An electricity generation license is a legal document issued by EPDK that grants a company the right to build, operate, and manage a power generation facility and sell the electricity it produces. It is mandatory for:
- Power plants above 1 MW capacity (licensed category).
- Facilities that plan to sell electricity to the grid or third parties.
For smaller plants under 1 MW capacity, investors may benefit from unlicensed generation regulations, which have simplified procedures.
3. Who Can Apply?
- Legal entities (companies) registered under Turkish law.
- Applicants must be incorporated as a joint-stock company (A.Ş.) or limited liability company (Ltd. Şti.) with electricity generation stated as one of their corporate purposes.
- Companies must have sufficient financial strength, technical expertise, and a clear business plan for energy generation.
4. Steps to Obtain an Electricity Generation License
4.1. Feasibility Study
Before starting the licensing process, investors should:
- Conduct technical and economic feasibility studies (fuel source, technology, capacity).
- Identify the location and land use rights of the project site.
- Prepare an initial environmental assessment.
4.2. EPDK Application
The formal application must be submitted to EPDK along with:
- Application form (as per EPDK standards).
- Corporate documents: trade registry records, articles of association, and tax certificates.
- Technical documents: generation capacity plan, energy source details, and grid connection feasibility.
- Financial documents: balance sheets, cash flow projections, and proof of capital.
- Environmental documents: EIA report or an EIA exemption letter (if applicable).
- Application fee receipt.
5. Pre-Licensing Procedure
EPDK may issue a pre-license (ön lisans) before granting a full generation license, especially for larger facilities. The pre-license period (generally 24-36 months) allows the investor to:
- Complete EIA processes.
- Secure grid connection agreements.
- Finalize land acquisition or long-term lease contracts.
6. Environmental and Safety Requirements
- EIA Approval: Power plants exceeding certain thresholds must obtain an “EIA Positive” decision from the Ministry of Environment, Urbanization, and Climate Change.
- Safety and Risk Management: Facilities must implement systems for fire safety, occupational health, and hazardous materials management.
- Environmental Compliance: Emissions and waste management must adhere to national and international standards.
7. Grid Connection Permits
Electricity generated must be integrated into the national grid. Therefore:
- A grid connection agreement with TEİAŞ (Turkish Electricity Transmission Corporation) or local distribution companies is mandatory.
- A technical feasibility report ensures compatibility with existing infrastructure.
8. License Duration and Scope
- An electricity generation license is typically valid for up to 49 years.
- The license specifies:
- The generation capacity of the facility.
- The energy source (e.g., coal, gas, hydro, solar, wind, biomass).
- The location and operational standards.
9. Financial Obligations
Obtaining and maintaining a license involves several financial commitments:
- Application and license fees (determined by EPDK).
- Annual supervision fees to EPDK.
- Investment costs for the construction and operation of the facility.
- Insurance policies covering accidents, natural disasters, and environmental damage.
10. YEKDEM and Renewable Energy Incentives
For renewable energy plants (e.g., wind, solar, hydro, biomass), investors can register for the YEKDEM (Renewable Energy Resources Support Mechanism), which:
- Guarantees the purchase of generated electricity at a fixed tariff for 10 years.
- Provides bonus tariffs for facilities using domestically manufactured components.
11. Renewal, Transfer, and Revocation
- Renewal: Licenses can be renewed before their expiry by submitting updated technical and financial documents.
- Transfer: A license cannot be transferred without prior EPDK approval.
- Revocation: EPDK can revoke a license if the company:
- Fails to meet investment deadlines.
- Violates safety or environmental regulations.
- Engages in anti-competitive practices.
12. Common Legal Risks
12.1. Environmental Litigation
Projects can be delayed or canceled due to challenges to the EIA report by environmental groups.
12.2. Contractual Disputes
Conflicts may arise with EPC (Engineering, Procurement, Construction) contractors or equipment suppliers.
12.3. Grid Connection Issues
Delays in grid connection can affect project timelines and profitability.
13. Role of Legal Counsel
A lawyer specializing in energy law can:
- Prepare and review license application documents.
- Ensure compliance with EPDK regulations and environmental laws.
- Draft and negotiate EPC and power purchase agreements.
- Represent investors in administrative appeals or litigation.
14. Timeline for Licensing
The licensing process can take 12 to 24 months, depending on:
- EIA approval duration.
- Complexity of the grid connection.
- Administrative workload at EPDK.
15. Conclusion
Obtaining an electricity generation license in Turkey is a multi-step process requiring compliance with technical, environmental, and legal standards. By conducting thorough feasibility studies, preparing comprehensive applications, and securing grid and environmental approvals, investors can successfully enter the energy market.
Key Takeaways:
- Law No. 6446 is the primary legal source for electricity licensing.
- EPDK licensing is mandatory for all facilities exceeding 1 MW.
- Renewable energy projects benefit from YEKDEM incentives and simplified procedures.
Yanıt yok