Renewable Energy Arbitration in Turkey: Solar, Wind and Hydroelectric Project Disputes

Introduction

Renewable energy has become one of the most important areas of infrastructure investment in Türkiye. Solar power plants, wind farms, hydroelectric facilities and electricity storage projects require significant capital, long-term regulatory planning, specialised engineering and complex contractual structures.

As of the end of May 2026, Türkiye’s installed electricity capacity reached 125,598 MW. Hydroelectric power represented approximately 25.8% of installed capacity, solar power 21.4% and wind power 12%. The Ministry of Energy and Natural Resources also reported that Türkiye had 778 hydroelectric, 409 wind and more than 40,000 solar generation facilities, including unlicensed plants.

The growth of renewable capacity does not eliminate project risk. On the contrary, the increasing technical and commercial complexity of renewable projects creates numerous opportunities for disputes.

A renewable energy project may involve:

• A project company;
• Turkish or foreign shareholders;
• An engineering, procurement and construction contractor;
• Turbine, panel or inverter suppliers;
• An operation and maintenance provider;
• Banks and security agents;
• Electricity purchasers;
• Landowners;
• Distribution or transmission system operators;
• Regulatory and environmental authorities.

Disputes may arise over licences, grid capacity, construction delays, performance guarantees, electricity prices, production shortfalls, curtailment, equipment defects, environmental approvals, water-use rights, force majeure, termination and project valuation.

For domestic and cross-border projects, renewable energy arbitration in Turkey can provide an effective alternative to ordinary court litigation. Arbitration enables the parties to select decision-makers experienced in energy law, engineering, project finance and electricity markets. Proceedings may be conducted in English, confidential technical information may be protected, and qualifying awards may be enforced internationally.

However, a fundamental distinction must be maintained between private contractual disputes and public regulatory matters.

An arbitral tribunal may determine whether an EPC contractor failed to complete a solar power plant on time or whether a power purchaser breached a long-term electricity sale agreement. It cannot ordinarily replace the Energy Market Regulatory Authority, known as EPDK or EMRA, annul a regulatory licence decision or compel a public authority to grant an environmental approval.

This guide examines the principal issues arising in solar, wind and hydroelectric disputes in Türkiye, including:

• Generation licences and preliminary licences;
• Unlicensed electricity generation;
• Renewable Energy Resource Areas;
• YEKDEM support;
• Grid connection and curtailment;
• EPC and equipment-supply claims;
• Power purchase agreements;
• Operation and maintenance disputes;
• Hydroelectric water-use rights;
• Environmental approvals;
• Project financing;
• Investment treaty arbitration;
• Annulment and enforcement of arbitral awards.

What Is Renewable Energy Arbitration?

Renewable energy arbitration is the resolution of a private dispute connected with the development, financing, construction, operation or sale of a renewable energy project by one or more arbitrators instead of a national court.

The tribunal’s jurisdiction normally derives from a written arbitration agreement contained in:

• An EPC contract;
• A turbine or solar-panel supply agreement;
• An operation and maintenance agreement;
• A power purchase agreement;
• A shareholders’ agreement;
• A joint venture agreement;
• A share purchase agreement;
• A project development agreement;
• A land lease;
• A financing or direct agreement;
• A settlement agreement.

The arbitral tribunal may determine whether:

• A project milestone was achieved;
• Delay damages are payable;
• The facility passed performance testing;
• The equipment complied with technical specifications;
• Electricity was delivered in the agreed quantity;
• A price-adjustment formula was applied correctly;
• An event qualifies as force majeure;
• Contractual termination was valid;
• An indemnity or compensation payment is due.

Arbitration is particularly valuable in renewable energy disputes because legal issues are often inseparable from engineering and financial questions.

A solar dispute may require analysis of irradiation, module degradation, inverter availability and expected production. A wind dispute may involve turbine power curves, wake losses, wind measurements and grid compliance. A hydroelectric dispute may require hydrology, water-flow modelling, dam operations and environmental-flow obligations.

Legal Framework for Renewable Energy Projects in Türkiye

Renewable energy investments are governed by a combination of electricity-market, renewable-energy, environmental, land-use and arbitration legislation.

The principal regulatory sources include:

• Electricity Market Law No. 6446;
• Law No. 5346 on the Use of Renewable Energy Resources for Electricity Generation;
• Electricity Market Licensing Regulation;
• Regulation on Unlicensed Electricity Generation;
• Regulation on Connection and System Use;
• Electricity Grid Regulation;
• YEKDEM Regulation;
• Renewable Energy Resource Areas Regulation;
• Environmental Impact Assessment Regulation;
• Turkish International Arbitration Law No. 4686;
• Articles 407 to 444 of the Turkish Code of Civil Procedure.

The Ministry of Energy and Natural Resources lists Law No. 6446 and Law No. 5346 as the principal electricity and renewable-energy statutes. Its official legislation inventory also includes the licensing, unlicensed-generation, connection, grid, YEKDEM, storage and Renewable Energy Resource Areas regulations.

The applicable regulatory framework depends on the project model. A licensed wind farm, an unlicensed rooftop solar facility, a storage-integrated solar project and a YEKA project may all be subject to different application, connection and commercial rules.

The exact legislation in force on the relevant application, commissioning and support date must therefore be reviewed. Renewable energy regulations have changed repeatedly, and historic tariff or licence assumptions should not be applied automatically to a new project.

Licensed Electricity Generation

Large-scale renewable energy projects are generally developed under the licensed electricity-generation regime.

The official Ministry process overview for licensed generation identifies several principal stages, including:

1. Resource measurement where required;
2. Preliminary licence application;
3. Technical evaluation;
4. Connection-capacity competition where applicable;
5. Issuance of the preliminary licence;
6. Completion of administrative permits;
7. Issuance of the generation licence;
8. Construction;
9. Facility acceptance;
10. Commercial operation.

For wind and solar applications, the Ministry’s process overview also refers to resource-measurement requirements, technical assessment and the role of TEİAŞ in connection-capacity competition where multiple applications concern the same capacity or area.

A preliminary licence is not equivalent to an unconditional right to generate electricity. It creates a development period during which the project company must satisfy specified obligations.

These obligations may include:

• Securing land rights;
• Obtaining zoning approvals;
• Completing environmental procedures;
• Finalising project approvals;
• Completing connection-related requirements;
• Amending corporate documents;
• Maintaining financial eligibility;
• Satisfying project-specific milestones.

Failure to complete the preliminary-licence obligations may endanger the project and create disputes among shareholders, developers, contractors and financiers.

Preliminary Licence Disputes

Preliminary-licence disputes frequently arise within the private contractual structure rather than directly between the investor and EPDK.

For example, a development agreement may require one party to obtain the preliminary licence and transfer the project company after specified permits are completed.

The parties may disagree over:

• Whether a milestone was completed;
• Whether an extension should have been obtained;
• Whether a permit delay was attributable to the developer;
• Whether the buyer must complete the acquisition;
• Whether the preliminary licence was accurately represented;
• Whether development expenses were properly incurred.

An arbitral tribunal may determine the parties’ contractual liability for failure to maintain the project. A challenge to EPDK’s regulatory decision itself may require administrative proceedings.

The project documents should define the legal effect of:

• Preliminary-licence amendment;
• Expiry;
• Cancellation;
• Capacity reduction;
• Site modification;
• Change of technology;
• Change of control.

Unlicensed Electricity Generation

Türkiye also maintains an unlicensed electricity-generation regime. This regime has become particularly important for rooftop and land-based solar projects connected with commercial and industrial consumption facilities.

The official Ministry description presents the unlicensed regime primarily as a mechanism supporting self-consumption and the establishment of generation facilities associated with consumption points. It also emphasises that the commercially appropriate investment should generally be structured around meeting the relevant consumer’s electricity consumption rather than developing excessive capacity solely for electricity sales.

Unlicensed generation does not mean unregulated generation.

Projects may still require:

• A connection application;
• A connection agreement invitation letter;
• Technical evaluation;
• Land rights;
• Zoning compliance;
• Environmental procedures;
• Project approval;
• Facility acceptance;
• Metering arrangements.

Common disputes include:

• Rejection or delay of the connection application;
• Insufficient network capacity;
• Incorrect association with a consumption facility;
• Delayed connection invitation;
• Failure to complete the facility within the required period;
• Disagreement over surplus electricity;
• Inverter or panel performance;
• Allocation of consumption between facilities;
• Roof-ownership and lease disputes.

The exact capacity limit, consumption relationship and surplus-sale rules must be confirmed under the regulations and EPDK decisions in force for the relevant project.

Renewable Energy Resource Areas: YEKA Projects

Renewable Energy Resource Areas, commonly known as YEKA, are designated areas intended for large-scale wind or solar generation projects.

The Ministry describes YEKA areas as technically suitable areas with strong renewable-resource potential that can support large installed capacity and are planned with administrative, environmental and transmission considerations in mind. The YEKA model is also designed to reserve connection capacity, support efficient resource use and promote domestic technology and industrial development.

YEKA projects may involve:

• A competition or tender;
• A YEKA agreement;
• Domestic production commitments;
• Local content obligations;
• Research and development undertakings;
• Specified construction milestones;
• A defined electricity sale mechanism;
• Performance security;
• Generation licence obligations.

Potential disputes include:

• Interpretation of tender specifications;
• Failure to satisfy domestic-manufacturing commitments;
• Delay in land allocation;
• Failure to complete the project on time;
• Technology changes;
• Performance-security calls;
• Termination of the YEKA agreement;
• Changes in connection or transmission arrangements.

The dispute resolution clause must be reviewed together with the YEKA specification, contract and applicable public-law framework. A project company should not assume that every dispute arising from a publicly organised renewable tender is automatically capable of ordinary commercial arbitration.

YEKDEM Support Mechanism

Law No. 5346 establishes the legal basis for supporting electricity generated from qualifying renewable energy resources. The relevant prices, eligibility periods, certification requirements and domestic-component incentives are implemented through regulations and presidential decisions.

The Ministry’s current legislation inventory includes the YEKDEM Regulation and the presidential decision concerning renewable facilities entering operation between 1 July 2021 and 31 December 2030. This demonstrates that support terms must be assessed according to the facility’s commissioning period and applicable decision rather than by relying on historic tariff figures.

EPDK publishes annual YEKDEM application notices and final lists. For the 2026 mechanism, EPDK required qualifying generation-licence holders to apply electronically within the announced deadline and stated that applications would be reviewed under Law No. 6446, Law No. 5346, the YEKDEM Regulation and other electricity-market legislation.

YEKDEM-related contractual disputes may concern:

• Whether a project qualified for support;
• Which party was responsible for the application;
• Failure to submit complete documentation;
• Loss of support because of delayed commissioning;
• Treatment of YEKDEM revenue under financing documents;
• Allocation of domestic-component incentives;
• Calculation of revenue under a share sale or earn-out.

A tribunal may determine private contractual responsibility for loss of YEKDEM revenue. It cannot simply order EPDK to include a facility in the mechanism where statutory requirements were not satisfied.

Power Purchase Agreement Disputes

Renewable power may be sold through:

• The organised electricity market;
• YEKDEM;
• A bilateral power purchase agreement;
• A corporate power purchase agreement;
• An electricity supply arrangement connected with self-consumption;
• Another private commercial structure.

A long-term power purchase agreement may regulate:

• Contracted capacity;
• Delivery profile;
• Electricity price;
• Indexation;
• Imbalance costs;
• Guarantees of origin;
• Curtailment;
• Change in law;
• Force majeure;
• Credit support;
• Termination compensation.

Common PPA disputes include:

• Failure to deliver the contracted volume;
• Failure to purchase;
• Incorrect application of the pricing formula;
• Negative market prices;
• Imbalance charges;
• Metering errors;
• Production shortfalls;
• Failure to obtain required certificates;
• Early termination.

The agreement should distinguish carefully between an obligation to deliver actual production and an obligation to deliver a guaranteed quantity.

Renewable production depends on weather and resource conditions. A generator should not inadvertently guarantee an absolute output unless the commercial model and hedging arrangements justify that obligation.

Grid Connection Disputes

Grid connection is one of the most important elements of a renewable project.

A completed power plant has limited commercial value if it cannot export electricity to the network.

The Ministry’s regulatory inventory identifies the Connection and System Use Regulation and the Electricity Grid Regulation among the principal electricity-market rules. Licensed project development also involves technical assessment and TEİAŞ connection-capacity processes.

Grid-related disputes may concern:

• Availability of connection capacity;
• Connection point;
• Connection voltage;
• Required network investment;
• Delay in construction of transmission facilities;
• Cost-sharing;
• System-use charges;
• Failure to meet technical standards;
• Reactive power or frequency requirements;
• Metering;
• Energisation delay.

Several contractual relationships may be affected simultaneously.

A delay in grid connection may create claims under:

• The EPC contract;
• The financing agreement;
• The PPA;
• The turbine or panel supply agreement;
• The project acquisition agreement.

The contracts should establish whether grid delay is treated as:

• Employer risk;
• Contractor risk;
• Force majeure;
• An extension-of-time event;
• A compensation event;
• A termination event.

Curtailment and Dispatch Restrictions

Curtailment occurs where a power plant is technically capable of producing electricity but is instructed or required to reduce output because of network or system conditions.

Curtailment disputes may concern:

• Whether the event resulted from grid limitations;
• Whether the plant failed to satisfy technical requirements;
• Whether compensation is available;
• Whether the event counts toward availability guarantees;
• Whether the contractor or operator bears responsibility;
• Whether revenue-loss insurance applies.

The project contracts should distinguish between:

• External grid curtailment;
• Plant-level technical failure;
• Scheduled maintenance;
• Market-based dispatch decisions;
• Emergency system instructions;
• Grid-code non-compliance.

A turbine or inverter supplier should not be liable for lost output caused solely by an external grid instruction. Conversely, the generator should not characterise a plant defect as curtailment merely because the facility remained connected to the network.

Solar Energy Project Disputes

Solar projects may involve disputes concerning:

• Solar-resource studies;
• Module degradation;
• Inverter failure;
• Tracker performance;
• Shading;
• Soiling;
• Cable losses;
• Transformer availability;
• Construction defects;
• Land settlement;
• Grid connection.

Solar-resource risk

Before construction, financial models use irradiation data to forecast production.

The actual output may differ because of:

• Weather variation;
• Inaccurate satellite data;
• Measurement errors;
• Shading;
• Soiling;
• Snow;
• Temperature;
• Equipment degradation.

The contract should specify whether the resource assessment is:

• A binding representation;
• A reasonable estimate;
• An independent report;
• Information provided without warranty.

A project seller may face a misrepresentation claim where it knowingly supplied manipulated or materially incomplete production data. A normal difference between forecast and actual weather is not automatically a breach.

Module and inverter warranties

Solar equipment contracts may contain warranties concerning:

• Manufacturing defects;
• Product performance;
• Linear degradation;
• Inverter availability;
• Efficiency;
• Replacement;
• Repair response.

The claimant should distinguish between:

• Product warranty;
• Performance warranty;
• EPC performance guarantee;
• O&M availability guarantee;
• Manufacturer warranty.

These obligations may be owed by different companies under separate arbitration clauses.

Performance ratio

EPC contracts frequently use a performance-ratio test to determine whether the plant meets its guaranteed technical output.

Disputes may concern:

• Test conditions;
• Weather data;
• Sensor calibration;
• Excluded downtime;
• Grid unavailability;
• Temporary acceptance;
• Correction of defects;
• Liquidated damages.

The contract should identify the applicable standard, instruments, data-cleaning method and independent engineer.

Wind Energy Project Disputes

Wind projects commonly involve:

• Turbine supply agreements;
• Balance-of-plant EPC contracts;
• Long-term service agreements;
• Grid connection works;
• Land leases;
• Access-road agreements.

Wind measurement and energy yield

Wind-project valuation depends heavily on wind-resource data.

Disputes may concern:

• Measurement-mast location;
• Measurement period;
• Data correction;
• Long-term correlation;
• Wake losses;
• Turbine selection;
• Availability assumptions;
• Grid losses;
• Extreme-weather shutdown.

A forecast such as P50, P75 or P90 represents a probability-based energy estimate rather than a guarantee of future production.

A buyer alleging that energy yield was overstated should prove that the methodology, data or disclosure was contractually defective rather than relying solely on later production results.

Turbine performance

Turbine disputes may involve:

• Power-curve compliance;
• Availability;
• Blade defects;
• Gearbox failure;
• Noise;
• Vibration;
• Software control;
• Grid-code compliance;
• Repeated component failure.

A long-term service agreement should define:

• Technical availability;
• Energy-based availability;
• Excluded downtime;
• Scheduled maintenance;
• Spare-part responsibility;
• Major component replacement;
• Remote monitoring;
• Liquidated damages.

Environmental procedures for wind projects

The Ministry of Environment announced that under the 2022 Environmental Impact Assessment Regulation, wind energy projects are included in the Annex I process regardless of threshold and are handled at ministry level. The announcement also explains that unlicensed wind applications require the relevant grid operator’s connection-agreement invitation letter for the EIA application to be assessed.

Project teams should nevertheless verify the current regulation and administrative practice at the date of filing, particularly where storage, capacity expansion or turbine relocation is involved.

Hydroelectric Project Disputes

Hydroelectric projects create legal issues that differ significantly from solar and wind investments.

A hydroelectric project depends on:

• Water flow;
• Reservoir or regulator operation;
• Hydrological conditions;
• Sedimentation;
• Environmental-flow requirements;
• Upstream and downstream facilities;
• Irrigation and drinking-water priorities;
• Civil structures.

Water-use right agreements

DSİ states that hydroelectric generation projects operating under Electricity Market Law No. 6446 require a water-use right agreement between DSİ and the relevant legal entity under the regulation published on 15 June 2019. DSİ also manages applications, project evaluation and coordination connected with hydroelectric water-use arrangements.

A water-use right agreement is distinct from:

• The generation licence;
• Environmental approval;
• Land ownership;
• The EPC contract;
• The PPA.

A private shareholder or construction arbitration cannot replace DSİ’s statutory role under the water-use regime.

Hydrology disputes

Actual generation may be lower than forecast because of:

• Drought;
• Lower water flow;
• Changes in upstream use;
• Sedimentation;
• Environmental-flow obligations;
• Irrigation releases;
• Flood-control instructions;
• Civil-structure defects.

The contract should identify whether hydrological data are:

• Guaranteed;
• Historical information only;
• Supplied without warranty;
• Prepared by an independent consultant.

Ordinary hydrological variability should not automatically be treated as force majeure. The allocation of water-resource risk must be stated clearly.

Civil engineering and geological risk

Hydroelectric EPC disputes may concern:

• Tunnel conditions;
• Landslides;
• Dam foundations;
• Water leakage;
• Penstock defects;
• Turbine cavitation;
• Sedimentation;
• Geological surprises;
• Flood damage.

The contract should define the baseline geological information and the consequences of materially different site conditions.

EPC Contract Disputes

The EPC contract is frequently the largest private contract in a renewable project.

The contractor may undertake to deliver a complete and operational facility by a guaranteed date and price.

Common disputes include:

• Delayed completion;
• Cost overruns;
• Variation orders;
• Defective design;
• Failure of performance tests;
• Interface problems;
• Supply-chain disruption;
• Employer-caused delay;
• Extension of time;
• Liquidated damages.

Delay and liquidated damages

The claimant should identify the critical path rather than merely listing late activities.

A proper delay analysis may consider:

• Baseline programme;
• Updated schedules;
• Permit delays;
• Land access;
• Equipment delivery;
• Grid works;
• Testing;
• Concurrent delay;
• Mitigation.

Delay liquidated damages should be distinguished from performance liquidated damages.

Delay damages compensate late completion. Performance damages address failure to achieve output, efficiency, availability or another technical standard.

Taking-over and acceptance

The contract should define:

• Mechanical completion;
• Energisation;
• Provisional acceptance;
• Commercial operation;
• Final acceptance;
• Defect correction;
• Punch-list work.

A plant may begin producing electricity before every minor defect is corrected. The contract should state whether commercial operation constitutes acceptance and whether outstanding defects prevent release of performance security.

Operation and Maintenance Disputes

O&M providers may be responsible for:

• Preventive maintenance;
• Corrective maintenance;
• Remote monitoring;
• Spare parts;
• Reporting;
• Warranty administration;
• Security;
• Vegetation or cleaning;
• Compliance support.

Disputes may concern:

• Availability;
• Response time;
• Repeated failures;
• Spare-part delays;
• Maintenance quality;
• Production reporting;
• Cost overruns;
• Termination.

An availability guarantee should specify:

• The calculation period;
• Excluded events;
• Grid downtime;
• Force majeure;
• Planned maintenance;
• Owner instructions;
• Resource unavailability;
• Measurement source.

A low energy output does not always prove poor O&M performance. The tribunal must separate weather conditions, equipment condition, grid limitations and operator conduct.

Electricity Storage Disputes

Storage-integrated renewable projects create additional risks.

Disputes may concern:

• Battery capacity;
• Degradation;
• Round-trip efficiency;
• State of charge;
• Charging source;
• Dispatch rights;
• Fire safety;
• Grid services;
• Replacement obligations;
• End-of-life capacity.

The Ministry’s current electricity legislation inventory includes specific regulations governing electricity storage activities, and EPDK continues to develop the storage-integrated solar and wind licensing framework.

A battery supplier’s capacity warranty should define:

• Test conditions;
• Temperature;
• Cycling assumptions;
• Depth of discharge;
• Permitted operating profile;
• Annual degradation;
• Augmentation.

The owner cannot operate the battery outside the agreed profile and then claim that all degradation constitutes a product defect.

Environmental and Land-Use Disputes

Renewable energy is not exempt from environmental and land-use regulation.

Projects may require:

• An EIA decision;
• Zoning approval;
• Building or construction permits;
• Forestry permission;
• Agricultural land approval;
• Pasture reallocation;
• Expropriation or easement;
• Archaeological clearance;
• Protected-area review.

Environmental approvals can be invalidated or lost where the project is not implemented within the regulatory period or materially changes. The Ministry continues to publish decisions declaring solar and storage project EIA approvals invalid under the applicable regulation, demonstrating that environmental approval must be maintained throughout development.

The private contracts should allocate:

• Responsibility for applications;
• Cost of environmental studies;
• Risk of permit refusal;
• Consequences of project modification;
• Community consultation;
• Biodiversity measures;
• Mitigation and monitoring.

An arbitral tribunal may determine which party bears contractual loss caused by a permit problem. The legality of the public authority’s EIA decision may require administrative litigation.

Force Majeure and Change in Law

Renewable energy projects may be affected by:

• Natural disasters;
• War;
• embargo;
• Epidemic restrictions;
• Exceptional grid events;
• Government prohibition;
• Changes in technical standards;
• Currency restrictions;
• New environmental requirements.

The contract should distinguish between:

• Force majeure;
• Change in law;
• Regulatory delay;
• Grid risk;
• Resource variability;
• Contractor supply-chain problems.

A general increase in equipment price or financing cost is not necessarily force majeure.

The clause should regulate:

• Notice;
• Evidence;
• Mitigation;
• Extension of time;
• Cost compensation;
• Suspension;
• Long-stop termination;
• Allocation of continuing expenses.

Change-in-law provisions are particularly important where the project economics depend on a regulatory mechanism, tariff, support programme or tax treatment.

Project Financing and Lender Rights

Renewable projects are frequently financed on a limited-recourse basis.

Lenders may require security over:

• Project shares;
• Bank accounts;
• Receivables;
• Equipment;
• Insurance proceeds;
• Electricity-sale income;
• Material project contracts.

They may also require direct agreements with:

• The EPC contractor;
• The O&M provider;
• The power purchaser;
• Major equipment suppliers.

A direct agreement may provide:

• Notice before termination;
• Lender cure rights;
• Step-in rights;
• Restrictions on amendment;
• Recognition of security;
• Continued contractual performance.

The dispute resolution clause in the direct agreement should be compatible with the project contract. The lender is not automatically bound by an arbitration clause merely because it financed the project.

Renewable Energy M&A Disputes

Renewable projects are frequently sold at the development, construction or operating stage.

A share purchase agreement may contain warranties concerning:

• Licence validity;
• Preliminary-licence obligations;
• Grid capacity;
• Land rights;
• EIA status;
• YEKDEM eligibility;
• EPC claims;
• Production data;
• Tax;
• Financing;
• Litigation.

Post-closing disputes may arise where:

• A licence obligation was undisclosed;
• Actual production differs from the financial model;
• Grid capacity is restricted;
• The EIA decision becomes invalid;
• The plant loses YEKDEM eligibility;
• Equipment defects emerge;
• Land rights are incomplete.

The SPA should distinguish between:

• A warranty that a licence currently exists;
• A warranty that all licence obligations were complied with;
• A forecast of future production;
• A guaranteed production level;
• Information disclosed through due diligence.

Administrative Disputes and Arbitrability

Private contractual energy claims are generally more suitable for arbitration than challenges to regulatory acts.

Claims commonly suitable for arbitration include:

• EPC delay;
• Equipment defects;
• PPA payment;
• Shareholder funding;
• O&M availability;
• Project-sale warranties;
• Contractual indemnities;
• Termination damages.

Claims commonly requiring administrative proceedings may include challenges to:

• Licence cancellation;
• Preliminary-licence rejection;
• Administrative fines;
• EPDK decisions;
• EIA decisions;
• Public permit refusals;
• Regulatory connection decisions.

Under Turkish International Arbitration Law No. 4686, the international arbitration regime applies where a dispute has a foreign element and the seat is in Türkiye, or where the parties or tribunal select the law. The statute excludes disputes involving rights in rem over Turkish immovable property and matters not subject to the parties’ free disposition.

Domestic arbitration is governed by Articles 407 to 444 of the Turkish Code of Civil Procedure, which similarly limits arbitration to matters that parties may dispose of legally.

A tribunal may determine the contractual consequences of a regulatory decision without possessing authority to annul that decision.

Investment Treaty Arbitration

Foreign investors in Turkish renewable energy projects may, in appropriate circumstances, have protection under a bilateral investment treaty.

Türkiye’s Ministry of Trade states that its BIT programme commonly provides protections including fair and equitable treatment, protection against expropriation, free transfer of returns, full protection and security and international dispute settlement. The Ministry currently reports that Türkiye has signed BITs with 98 countries and that 76 are in force.

A foreign renewable investor may consider treaty protection where state conduct allegedly:

• Discriminates against the project;
• Expropriates the investment;
• Frustrates a protected regulatory commitment;
• Prevents transfer of returns;
• Treats the investor unfairly.

A commercial contractual dispute is not automatically an investment-treaty dispute.

The investor must establish:

• Protected nationality;
• A qualifying investment;
• State consent to arbitration;
• Compliance with procedural conditions;
• Breach of a treaty obligation;
• Causation;
• Loss.

Treaty protection should be reviewed before the investment is structured, not only after a dispute emerges.

Evidence and Expert Analysis

Renewable energy arbitration is highly dependent on technical and electronic evidence.

Relevant documents may include:

• Licences and preliminary licences;
• EPDK correspondence;
• Connection opinions;
• EPC contracts;
• Project schedules;
• Design documents;
• SCADA data;
• Meter records;
• Weather data;
• Turbine or inverter logs;
• Performance-test reports;
• Maintenance records;
• PPA invoices;
• YEKDEM documents;
• Environmental approvals;
• Water-flow records.

Experts may include:

• Electrical engineers;
• Solar engineers;
• Wind-energy specialists;
• Hydrologists;
• Civil engineers;
• Delay experts;
• Electricity-market experts;
• Forensic accountants;
• Valuation experts.

The tribunal decides the legal meaning of the contract. Experts should explain technical performance and calculate consequences under the tribunal’s legal interpretation.

Damages in Renewable Energy Arbitration

Potential claims include:

• Delay liquidated damages;
• Performance liquidated damages;
• Unpaid electricity invoices;
• Lost generation revenue;
• Replacement costs;
• Repair costs;
• Additional financing expenses;
• Lost YEKDEM support;
• Termination compensation;
• Diminution in project value;
• Arbitration costs.

Lost revenue should be calculated carefully.

The model may require:

• Expected generation;
• Actual generation;
• Resource adjustment;
• Curtailment;
• Market price;
• YEKDEM price;
• Imbalance costs;
• Operating expenses;
• Taxes;
• Mitigation.

A claimant should not calculate lost electricity revenue using ideal theoretical production where actual weather, grid and equipment conditions would have reduced output.

Interim Measures

Urgent protection may be necessary where a party threatens to:

• Call a performance bond;
• Transfer project shares;
• Terminate a PPA;
• Remove equipment;
• Delete SCADA data;
• Prevent site access;
• Divert project revenue;
• Destroy technical records.

The tribunal may grant qualifying interim protection under the applicable arbitration law and institutional rules.

Court assistance may remain necessary where:

• An ex parte order is required;
• A bank guarantee must be restrained;
• A non-signatory must be bound;
• Shares or accounts must be attached;
• A public registry must act;
• Coercive enforcement is necessary.

An application to a competent court for interim protection does not necessarily waive the arbitration agreement.

Multi-Contract and Multi-Party Disputes

A renewable project may contain different dispute resolution clauses in:

• The EPC contract;
• Turbine supply agreement;
• O&M agreement;
• PPA;
• Financing documents;
• Shareholders’ agreement;
• Land lease;
• Direct agreement.

This creates a serious risk of fragmented proceedings.

For example, the project company may claim against the EPC contractor in ISTAC arbitration while facing a separate foreign arbitration with the turbine supplier and court proceedings with a landowner.

The project documents should coordinate:

• Arbitration institution;
• Seat;
• Language;
• Joinder;
• Consolidation;
• Tribunal appointment;
• Confidentiality;
• Related-contract claims.

Commercial connection alone does not bind a non-signatory to arbitration.

Drafting a Renewable Energy Arbitration Clause

An effective clause should identify:

1. The arbitration institution;
2. The legal seat;
3. The language;
4. The number of arbitrators;
5. The governing law;
6. The scope of disputes;
7. Required energy-sector expertise;
8. Interim measures;
9. Confidentiality;
10. Consolidation and joinder;
11. Expert determination;
12. Court and administrative proceedings.

An illustrative clause may provide:

Any dispute, controversy or claim arising out of or in connection with this Agreement, including any dispute concerning its formation, validity, interpretation, licensing obligations, design, construction, grid connection, performance testing, electricity delivery, pricing, force majeure, termination or damages, shall be finally resolved under the Istanbul Arbitration Centre Arbitration Rules.

The seat of arbitration shall be Istanbul, Türkiye. The tribunal shall consist of three arbitrators, at least one of whom shall have substantial experience in renewable energy and electricity-market disputes. The language of arbitration shall be English. Turkish law shall govern the merits.

The agreement should also state that applications for regulatory relief, administrative review or judicial interim measures do not constitute a waiver of arbitration.

Annulment and Enforcement

A Turkey-seated award is not subject to an ordinary appeal on the merits.

Under the applicable domestic or international arbitration regime, annulment is generally limited to matters such as:

• Invalid arbitration agreement;
• Improper tribunal constitution;
• Excess of jurisdiction;
• Serious procedural irregularity;
• Violation of equality or the right to be heard;
• Non-arbitrability;
• Public policy.

The annulment court should not ordinarily repeat a wind-yield analysis, recalculate a solar performance ratio or replace the tribunal’s hydrological findings merely because one party disagrees with the award.

The New York Convention establishes common standards for recognition of arbitration agreements and enforcement of foreign and non-domestic arbitral awards. Its objective is to ensure that covered foreign awards are generally capable of recognition and enforcement, subject to limited refusal grounds.

A renewable energy enforcement strategy may target:

• Bank accounts;
• Electricity receivables;
• Company shares;
• Insurance proceeds;
• Movable project assets;
• Parent-company guarantees.

Recognition of an award should be distinguished from enforcement against assets subject to public-law restrictions or third-party security rights.

Practical Renewable Energy Arbitration Checklist

Before signing or enforcing a renewable energy agreement in Türkiye, the parties should determine:

1. Whether the project is licensed, unlicensed or YEKA-based;
2. The precise licence and preliminary-licence status;
3. Which party is responsible for permits;
4. Whether the connection capacity is secured;
5. Who bears grid-delay and curtailment risk;
6. Whether YEKDEM eligibility is represented or guaranteed;
7. How electricity prices are calculated;
8. How imbalance costs are allocated;
9. Which party bears resource risk;
10. Which performance tests apply;
11. How delay and performance damages are calculated;
12. Whether storage obligations are included;
13. Which environmental approvals are required;
14. Whether hydroelectric water-use rights are complete;
15. How force majeure and change in law are defined;
16. Whether lenders have cure and step-in rights;
17. Which disputes require administrative proceedings;
18. Whether expert determination is mandatory;
19. Whether related contracts contain compatible clauses;
20. Where the award may need to be enforced.

Frequently Asked Questions

Can renewable energy disputes be arbitrated in Türkiye?

Yes. Private contractual disputes concerning EPC works, equipment, electricity sales, operation, shareholding and damages may generally be arbitrated through a valid written arbitration agreement.

Can an arbitral tribunal grant an electricity generation licence?

No. Generation licences and preliminary licences are issued by EPDK under the statutory electricity-market regime.

Can an arbitrator cancel an EPDK decision?

Ordinarily, no. Challenges to regulatory decisions generally require the competent administrative-law procedure. A tribunal may determine contractual compensation arising from the decision.

What is YEKDEM?

YEKDEM is Türkiye’s Renewable Energy Resources Support Mechanism established under Law No. 5346 and the related regulation. Eligibility, prices and periods depend on the applicable commissioning window, presidential decisions and annual procedures.

Is an unlicensed solar facility completely exempt from regulation?

No. Unlicensed projects remain subject to connection, technical, environmental, land, project-approval and acceptance requirements.

What is a YEKA project?

YEKA refers to a Renewable Energy Resource Area designated for large-scale renewable investment under a specific regulatory and competitive structure, commonly involving wind or solar capacity.

Who bears curtailment risk?

The answer depends on the PPA, EPC, O&M and financing agreements. The contracts should distinguish external grid curtailment from plant failure or non-compliance.

Does lower-than-forecast solar or wind production prove breach?

Not automatically. Production forecasts are affected by weather, resource variability, technical losses and grid conditions. The claimant must establish a contractual warranty, negligent study, defective equipment or another breach.

Is a water-use right agreement required for a hydroelectric project?

DSİ explains that hydroelectric generation projects under the licensed regime require a water-use right agreement concluded under the applicable regulation.

Can environmental disputes be arbitrated?

Contractual allocation of environmental responsibility may be arbitrated. The legality of an EIA or other administrative decision generally remains within the public-law system.

Can a foreign renewable investor bring investment arbitration?

Potentially, where an applicable treaty protects the investor and investment and the state has consented to arbitration. A commercial contract breach is not automatically a treaty breach.

Can interim relief be obtained before the tribunal is formed?

Yes. Depending on the clause and applicable rules, a party may seek relief from an emergency arbitrator or competent court.

Can a foreign renewable energy award be enforced in Türkiye?

A qualifying foreign award may be recognised and enforced under the New York Convention or Turkish private international law, subject to limited refusal grounds.

Conclusion

Renewable energy arbitration in Turkey provides an effective framework for resolving disputes involving solar, wind and hydroelectric projects.

Renewable projects combine regulatory, technical, financial and contractual risks. A single project may involve an electricity licence, grid connection, EPC contract, equipment warranties, a PPA, YEKDEM revenue, environmental approvals, financing and land rights.

The project’s regulatory status must be identified accurately.

Licensed generation, unlicensed generation and YEKA projects operate under different rules. A preliminary licence is not the same as a generation licence, and neither replaces environmental, zoning, land or technical approvals.

Solar disputes commonly involve module degradation, inverter availability, performance ratios, resource assumptions and connection delays.

Wind disputes may concern turbine power curves, availability, wind measurements, wake losses, environmental approvals and long-term service obligations.

Hydroelectric disputes frequently involve water-use right agreements, hydrological risk, civil structures, environmental flow and DSİ requirements.

The arbitration clause should cover the project’s full commercial lifecycle, including:

• Development;
• Licensing responsibilities;
• Construction;
• Performance testing;
• Connection;
• Electricity sales;
• Operation;
• Force majeure;
• Termination;
• Damages.

At the same time, the clause should preserve the distinction between commercial arbitration and administrative proceedings. An arbitral tribunal can allocate contractual loss caused by a regulatory event, but it cannot ordinarily replace EPDK, DSİ, environmental authorities or administrative courts.

All project contracts should contain compatible dispute resolution provisions where possible. Otherwise, a single technical failure may create separate and inconsistent proceedings involving the EPC contractor, equipment supplier, operator, purchaser and lender.

Evidence preservation is critical. SCADA data, meter records, weather information, turbine logs, inverter records, project schedules and regulatory correspondence should be secured as soon as a dispute becomes foreseeable.

Foreign investors should also evaluate treaty protection separately from contractual arbitration. Türkiye maintains an extensive network of bilateral investment treaties, but treaty jurisdiction and breach must be established under the particular agreement.

For project companies, investors, contractors, lenders, equipment manufacturers and electricity purchasers, specialised Turkish renewable energy and arbitration counsel can assist with regulatory due diligence, contract drafting, technical claims, interim protection, arbitral proceedings and enforcement of awards.