why 2012 will be so important for the restructured turkish electricity market

70

Ercument Camadan is an energyexpert at the Energy Market

Regulatory Authority (EMRA) ofTurkey. He holds an M.A. in

Economics from HacettepeUniversity in Turkey. He can be

contacted at [email protected] should be noted that the statementsexpressed in this article are entirely

those of the author and do notnecessarily represent those of the

institutions with which he isaffiliated.

1040-6190/$–see front matter # 2011 Elsev

Why 2012 Will Be So Importantfor the Restructured TurkishElectricity Market

Turkey has initiated an electricity sector reform since2001, with the encouragement of retail competition statedas a key aim of the reform process. Though Turkey has hitmany milestones, uncertainties still exist regarding theretail market, meaning further steps will need to be takenin 2012.

Ercument Camadan

I. Introduction

The electricity industry was

dominated by vertically integrated

companies before the

embracement of a reform process

including liberalization,

privatization, and restructuring of

electricity industry by many

countries in 1980s. Even though

many countries from different

regions and income levels have

opted to restructure their

electricity industries, the motives

behind the restructuring process

differ. Electricity reform has been

adopted in response to technical

ier Inc. All rights reserved., doi:/10.1016/j.tej.2

shifts in developed industrial

countries. In those countries, the

reform process has been motivated

by a desire to capture efficiency

gains by ensuring competition. By

contrast, electricity reform has

been implemented as a remedy for

financial mismanagement, poor

governance, and a failure to meet

the social contract in developing

countries and in some transition

economies.1

A lmost all of the means and

policies implemented by

the countries reforming their

electricity markets are identical.

Littlechild summarizes the main

011.10.018 The Electricity Journal

mailto:[email protected]

http://dx.doi.org/10.1016/j.tej.2011.10.018

Even thoughTurkey hastaken manysteps, someuncertaintiesstill exist regardingretail electricitymarket.

D

pillars of the textbook model for

restructuring and competition in

electricity markets: Privatization,

vertical separation of competitive

and regulated monopoly sectors,

horizontal restructuring to create

an adequate number of competing

generators and suppliers,

designation of an independent

system operator, creation of

voluntary energy and ancillary

services markets and trading

arrangements, application of

regulatory rules to promote access

to the transmission network and

incentive efficient location and

interconnection of new generation

facilities, unbundling of retail

tariffs and rules to enable access to

the distribution networks in order

to promote competition and at the

retail level, specification of

arrangements for supplying

customers until retail competition

is in place, creation of independent

regulatory agencies, and provision

of transition mechanisms that

anticipate and respond to

problems and support the

transition rather than hinder it.2

R etail competition is

promoted to allow

consumers to choose their

suppliers. Those retail suppliers

have the right of access to the local

distribution network to which the

customers have connected.3

Littlechild states that the social

value of electricity retailing is that

it establishes the prices which are

the best that suppliers can offer at

any time, and it identifies how

these prices differ by product

attribute, such as time of day and

duration into the future. This

situation lets retailers, customers,

ecember 2011, Vol. 24, Issue 10 1040-6190/$

and generators make more-

informed decisions.4 Joskow

argues that a successful retail

competition program can also

provide additional social benefits

by helping to improve the

performance of wholesale

markets.5

R etail competition is directly

suggested and promoted by

European Union (EU) directives.

The directive 2009/72/EC states

that in order to develop

competition, large non-household

customers should be able to

choose their suppliers and enter

into contracts with several

suppliers. On the other hand, it

should be noted that many U.S.

states have not adopted retail

competition programs. Electricity

consumers are still served by

regulated vertically integrated

utilities in those states.6

The introduction of competition

in retail markets should increase

consumers’ choices, reduce

barriers to entry, and encourage

innovation and lessen prices.

However, the results of retail

competition where it has been

implemented are still a matter of

–see front matter # 2011 Elsevier Inc. All right

debate. For example, Defeuilley

claims that the current situation of

retail electricity markets shows

that the expected results did not

always materialize.7 On the

contrary, Littlechild states that the

subsequent outcome of retail

competition is above expectations,

since initial expectations were low.

He claims that where retail

competition is allowed to develop,

customers remarkably prefer to

change their suppliers.8

Turkey has initiated an

electricity sector reform in parallel

with many other countries since

2001. The Electricity Market Law

(EML)9 was enacted in 2001 as the

first step of the reform process. An

independent regulatory body, the

Energy Market Regulatory

Authority (EMRA), was

established to regulate the

electricity and natural gas

markets.10 Although many

intentions of EML have not been

executed yet, the Turkish

electricity market has evolved

enormously since 2001 as a result

of the effort to create a liberal

market. Encouraging retail

competition has also been stated as

one of the aims of the reform

process in the country. Even

though Turkey has taken many

steps, some uncertainties still exist

regarding retail electricity market.

The main aim of this article is to

analyze the retail segment of the

Turkish electricity market. First,

Turkish electricity reform and

market structure will be

explained briefly. Then, the retail

segment will be analyzed and

assessed. Finally, the reasons that

will make 2012 highly significant

s reserved., doi:/10.1016/j.tej.2011.10.018 71


72

will be explored, and some

projections and recommendations

also drawn.

II. Turkish ElectricityReform and CurrentMarket Structure

The private sector wasgiven the right to

compete in marketsegments such as

generation andwholesale trading via

obtaining a license fromEMRA.

The year of 2001 may be

accepted as the commencement of

the reform process in the Turkish

electricity industry. The new

electricity market law, EML, was

enacted in that year aiming to

ensure the development of a

financially sound and transparent

electricity market functioning in a

competitive environment. EMRA

was established in order to

regulate the electricity market.

The private sector was given the

right to compete in market

segments such as generation and

wholesale trading via obtaining a

license from EMRA.

Electricity transmission

activities are conducted by the

state-owned Turkish Electricity

Transmission Co. (TEIAS).

Distribution activities are

performed by 21 regional

distribution companies. Twelve

of these are held by the private

sector, and the privatization

process of the other nine is

continuing.11 According to EML,

the distribution companies also

have to obtain a retail sales license

and supply electricity to

consumers in their regions if there

are some consumers unable to

purchase electricity and/or

capacity from a supplier. It should

be noted that currently there are

no retail sale companies except for


distribution companies that hold

retail sale licenses. In fact, all of

the non-eligible consumers have

to buy electricity energy from

these distribution companies.

The biggest electricity producer

in the country is the state-owned

Electricity Generation Co.

(EUAS), its subsidiaries, affiliates,

and partnerships. Other

generators are the companies that

have build-operate-transfer

(BOT), build-operate-own (BOO)

and transmission of operational

rights (TOOR) contracts;

independent power producers,

and self-generators.12 The

privatization of some power

plants held by EUAS is in process,

although the major hydro plants

are planned to remain under the

umbrella of EUAS.

There are 125 private wholesale

license holders in the Turkish

electricity market.13 Furthermore,

the Turkish Electricity Wholesale

Co. (TETAS), a state-owned

company, has a wholesale license

to trade the electricity purchased

from the power plants having

BOT, BOO, and TOOR contracts

with the government.


B ilateral contracting and the

balancing and settlement

market are the two main means

for market participants to trade

electricity. The state-owned

EUAS sells electricity to the state-

owned TETAS whereas EUAS’s

subsidiaries, affiliates,

partnerships, and portfolio

generation groups sell electricity

directly to the distribution

companies. The power plants

generating electricity within the

framework of BOT, BOO, and

TOOR contracts sell all of their

electricity to TETAS. TETAS,

purchasing electricity from EUAS

and within the context of vesting

contracts, provides electricity to

the 21 distribution companies.

TETAS, in addition, supplies

electricity to some eligible

consumers to whom it supplied

electricity before the enactment of

EML. However, if these eligible

consumers negate their contracts,

they lose the right to purchase

electricity from TETAS.

Independent power producers

provide electricity to eligible

consumers or wholesale

companies by bilateral

contracting. Self-generators also

have the right to sell one-fifth of

their generation in the market.14

The volume of the trade between

independent power producers

and distribution companies is

very low, primarily for two

reasons: (1) prices in the balancing

and settlement market are more

alluring, and (2) there are

contracts between distribution

companies and TETAS or EUAS’s

subsidiaries, affiliates, and

partnerships forcing the



D

distribution companies to

purchase electricity from those

state-owned suppliers. The

contracts will be in force by the

end of 2012.

T he current installed

electricity capacity of Turkey

is approximately 50,985 MW.

Approximately 30.2 percent of

capacity is constituted by natural

gas plants and 33.1 percent by

hydropower plants. The total

electricity consumption of the

country in 2010 is 210,434 GWh.

Approximately 45 percent of

electricity was generated by state-

owned EUAS and its subsidiaries,

affiliates, and partnerships, and 30

percent was generated by the

power plants having BO, BOT, and

TOOR contracts. The share of

generation of independent power

producers was 19 percent and that

of self-generators was nearly 6

percent.15

III. Retail Segment inTurkish ElectricityMarket

[(Figure_1)TD$FIG]
A. Envisaged retail market
structure

Figure 1: Opening Rate of Turkish Electricity Market (%)

A transparent electricity market

operating in a competitive

environment is one of the main

aims of the restructuring process.

In parallel with that aim, EML

envisages the creation of an

electricity market structure with

many market actors, particularly

in the generation, wholesale, and

retail segments. Retail and retail

service activities are conducted by

retail sale companies and


distribution companies holding

retail sale licenses in accordance

with provisions of EML and other

regulations. However, as

mentioned, currently there are not

any retail sale license holders apart

from distribution companies.

A strategy paper titled

‘‘Electricity Energy Market

and Supply Security Strategy

Paper’’ was prepared and

accepted by Higher Board of

Planning in May 2009. The

strategy paper states that all

consumers except for residential

consumers are planned to be

eligible consumers by the end of

2011. That means consumers

whose electricity consumption is

nearly 80 percent of total

consumption will be able to

choose their suppliers via

bilateral contracts. By the end of

2015, all of the electricity

consumers will be eligible,

according to the strategy paper.

It is stated in the strategy paper

that distribution companies

performing distribution,

generation, and retail activities

have to separate these activities


by the beginning of 2013. After

2013, these activities will have to

be carried out under separate

legal entities. Therefore, in respect

to this aim, new retailers except

for distribution companies should

be allowed to display activity in

order to ensure a retail market

with many actors.

Currently all consumers can

purchase electricity from

distribution license holders even

though their consumption level is

above the eligibility limit. Almost

90 percent of electricity is sold by

distribution companies to final

consumers via regulated tariffs.

However, EMRA may prefer not

determining and approving

tariffs for industrial or

commercial consumers in 2013.

B. Market opening

The opening rate in Turkish

electricity market is displayed in

Figure 1. EMRA determined that

all electricity consumers whose

annual consumption is above

30 MWh have eligibility rights in

2011. That means the market



able 1: Number of Eligible Customersegistered in the Turkish Balancing andettlement Market

ate

Number of

Eligible Customers

ecember 2009 362

anuary 2010 389

ebruary 2010 460

arch 2010 597

pril 2010 843

ay 2010 1,425

une 2010 2,220

uly 2010 2,993

ugust 2010 3,638

eptember 2010 4,532

ctober 2010 5,211

ovember 2010 6,020

ecember 2010 6,700

anuary 2011 7,538

ebruary 2011 7,857

arch 2011 8,782

pril 2011 12,443

ay 2011 12,351

une 2011 12,255

uly 2011 21,159

74

opening rate in Turkish electricity

market is nearly 75 percent.

However, the level of trade is

much lower than the opening

rate.

T he 75 percent theoretical

market opening rate does

not necessarily reflect the ratio of

electricity that is or can be traded

among market players. Although

the opening rate is 75 percent

when it is calculated from the

consumers’ side, only about 30

percent of total electricity

production can be traded in the

free market, as the total installed

capacity of independent power

producers and self-generators is

less than 35 percent.16

Nevertheless, as a result of

decreasing the eligibility limit, the

number of customers purchasing

electricity from suppliers in the

market has increased, as shown in

Table 1.17

C. Entry and exit in the retail

market

According to EML, any entity

having a retail license can

undertake activities in the retail

market. However, as mentioned,

currently there are no market

actors holding a retail license

except for distribution companies.

So, there is an implicit barrier to

becoming a market actor in the

retail segment since EMRA has

not granted any retail licenses.

Here, it should be noted that

most of the trading activities

performed by wholesale licensees

are related to retail sales. The

licensees purchase electricity

from generators or in the


TRS

D

D

J

F

M

A

M

J

J

A

S

O

N

D

J

F

M

A

M

J

J

balancing and settlement market

and sell that energy to eligible

consumers. That is, most of the

125 wholesale companies are

directly engaging in retail

activities in the market.

In Turkey, the movements of

eligible consumers are restricted

in 2011, as well. Eligible

customers purchasing electricity

from distribution companies

cannot leave these companies

whenever they want. They have

to start to buy electricity from

suppliers via bilateral contracts at

the beginning of quarters: Jan. 1,

April 1, July 1, or Oct. 1. On the

other hand, an eligible consumer

buying electricity from a supplier


can return to the distribution

company whenever it desires. The

reason for the restriction on

switching was to preserve retail

license-holder distribution

companies from the fluctuations

as these companies have

enormous purchasing contracts.

However, in our opinion this

restriction is not consistent with

the planned market structure. The

solution should be to decrease the

amount of obligatory contracts,

not to limit switching.

D. Effects of the vesting

contracts

Although the creation of retail

competition is stated as one of the

purposes of the reform process,

the government has vesting

contracts and state-owned

companies have a significant

share in total electricity

generation. Therefore, as

mentioned before, regional

distribution companies which

also sell energy have to buy all of

the energy generated within the

context of vesting contracts.

Distribution companies are the

primary suppliers in the current

market structure. However, they

cannot buy most of the electricity

via bilateral contracts from

independent producers. Since

they cannot have a word while

determining the prices in the

contracts with TETAS and EUAS,

an inefficient trade emerges.

Therefore, this obligation should

not be the responsibility only of

distribution companies. The

vesting contracts cannot be

eliminated, but all suppliers (and



D

customers) should be responsible

for paying for the cost of vesting

contracts in order to create an

efficient nature for competition

and ensure equality.

E. Effects of regulated tariffs

An inquiry done by the

European Commission shows

that regulated tariffs have

produced adverse effects for the

development of competitive

markets in several member states.

The main reasons are the low

levels of regulated tariffs

compared to market prices and

their covering of a large part of the

market. It is also recommended

that special measures to reduce

electricity bills in several member

states should be made compatible

with antitrust and state aid

rules.18

T urkey is no different in

seeing adverse impacts from

the regulated tariffs. Regulated

prices are determined via a

methodology that includes cross-

subsidization within different

consumer groups. There are 24

regulated consumer groups in

[(Figure_2)TD$FIG]

Figure 2: Average Hourly System Day-Ahead


Turkey, each with a different

regulated energy price. Due to a

provision in EML and a decision

made by the Council of Ministers

in 2007, some groups pay a higher

rate than the cost of the energy

delivered to them, while other

groups pay less. In fact, some

consumers, particularly

commercial consumers, subsidize

other consumers, particularly

industrial consumers purchasing

electricity via regulated tariffs.

The regulated electricity energy

prices are used as an index in

bilateral contracts, and the prices

determined in the contracts

between eligible consumers and

suppliers do not reflect the real

costs. The suppliers (generators

and wholesale companies) take

advantage of the margin between

regulated tariffs and wholesale

prices constituted in the balancing

and settlement market. The

bilateral contracts usually do not

set fixed prices or costs and the

variable price is determined as a

ratio of regulated prices. In

addition, before 2011, eligible

customers did not have to finance

the cost of non-technical losses,

Prices and Regulated Prices (2010)


while customers purchasing

energy by regulated tariffs had to.

The natural consequence of all

this is an inducement to the

wholesale/retail trade to take

advantage of the flaws.

Figure 219 shows the average

hourly system day-ahead prices

and the regulated industry and

commercial energy prices in 2010.

The difference between system

day-ahead prices and these

regulated tariffs pushes

customers in these two groups,

especially in the commercial

group, to buy energy from private

wholesalers. It is, of course,

preferable that eligible customers

purchase energy in the market.

Unfortunately, the increasing

level of trade between private

parties was not a result of

competition on costs but due to

the cost of cross-subsidization.

T hese various flaws in the

system lured capital holders

into establishing wholesale firms

to take advantage of the price gap

between regulated tariffs and spot

prices. Actually, the wholesale

firms do not have to be capital

holders. They can display any



76

activities in the balancing and

settlement market without

collateral. This has left many

insolvent companies trading

energy in the market, which is

unacceptable in a liberalized

market. Fortunately, the

wholesale firms will have to pay

sufficient collateral beginning

December 2011.

IV. Why 2012 Is SoImportant andConcluding Remarks

EML envisages a transition

period by the end of 2012

regarding some market activities.

Cross-subsidization, obligatory

energy purchase contracts

between distribution companies

and state-controlled generation or

wholesale companies, allowance

of activities such as generation,

distribution and retail without

establishing different legal

entities, and implementation of a

national tariff scheme are allowed

in the transition period. Since the

transition period ends by the end

of 2012, important steps must be

taken in 2012 in order to insure a

viable well-functioning market.

O ne of the issues that should

be fixed in 2012 is the

determination of a supplier of last

resort, which emerges as a

significant issue following the

introduction of retail competition.

The supply of last resort, broadly,

implies servicing the customers

who don’t choose their suppliers.

Supply of last resort is an

important means to protect

consumers who might be unable


to choose their suppliers and to

obtain energy. In the EU,

‘‘supplier of last resort’’ and

‘‘default supplier’’ are

understood in many different

ways, but it is usually the

incumbent energy supplier who

acts as both and this service is not

time-limited. However, this

serves as a barrier to new

entrants. Therefore, to promote

competition, ERGEG

recommends a tendering

procedure for appointing a

default supplier/supplier of last

resort, and also time-limiting

these services.20

Who will be responsible for

supplying energy as last resort is

not clear in the Turkish legislation.

What is most likely is that the

distribution companies or the

retail parts of the distribution

companies will have the

responsibility for being suppliers

of last resort. The issue will have

greater importance by the

beginning of 2013, as almost all

consumers except for households

most likely will be eligible

consumers. The determination of

responsible suppliers and the


tariffs to be implemented for non-

eligible customers will be crucial.

In brief, preparing sufficient

legislation, developing a

methodology, and building

awareness is one significant duty

that EMRA will have to

accomplish before the beginning

of 2013.

In my opinion, assigning the

distribution company to be

supplier of last resort is better

than the separated retail entities

from the distribution companies.

Correctly determining and

analyzing the costs of different

consumer groups will not be easy

when the retail company is

appointed as supplier of last

resort. Furthermore, the

distribution companies have to

purchase the amount of energy

that is lost in the network,

implying they will have to

continue to purchase energy. If

they are chosen as supplier of last

resort, the concerns about implicit

cross-subsidization between

regulated and unregulated tariffs

will be removed.

According to EML the cross-

subsidization of electricity prices

among different consumer

groups should be removed by the

end of 2012. A gradual transition

is required in order to lessen the

effects of removing cross-

subsidization on groups,

especially industrial customers.

Otherwise, a big change in a short

period will be unavoidable and

the consumers will not be ready to

overcome the serious change in

prices and market structure. Also

making a determination to

remove cross-subsidization is



D

very crucial since the system is

not a closed one and the

subsidizing groups may leave the

regulated energy tariffs due to

high prices and alternative lower

prices in the market. The main

group subsidizing other groups is

the commercial sector. This sector

has a tendency to leave regulated

tariffs. When they leave, financing

subsidized groups will be very

hard and ensuring the

sustainability of cross-

subsidization and regulated

energy tariffs will be impossible.

In brief, implementing the

methods to remove cross-

subsidization is necessary, rather

than looking for means to make

some groups subsidize other

groups via regulated energy

tariffs. This problem should be

solved in 2012 in order to show

the commitment to the reform

process.

W holesale and retail

activities should be

redefined in 2012 and new

retail licenses should be

granted in order to create

competition in the retail segment.

Otherwise, the separated sections

of the current distribution

companies may take advantage of

not having many rivals in the

market.

The obligation of distribution

companies to purchase energy

due to vesting contracts will

properly be removed at the end of

2012. A new mechanism to

distribute the cost of vesting

contracts will need to be created

by this time. If not, extending the

obligation may emerge on the

agenda of the government, which


in turn might create distortions.

All the energy generated in the

context of vesting contracts or by

EUAS should not be sold to the

distribution companies or the

retailers which will be separated

from distribution companies. It is

apparent that at least some of the

vesting contracts cannot be

removed, but a mechanism

allocating the cost to all the

suppliers (and therefore all the

customers) may be created. A

mechanism which may be

designed and managed by the

operator of the balancing and

settlement market ensuring that

all the suppliers and customers

are sharing that cost may be

established. Another option is

forcing the state-owned

wholesale company, which is

responsible for purchasing

electricity generated in the

context of vesting contracts and/

or state-owned generators, to

perform in the competitive

market. Finally, if all the purchase

obligation cannot be removed, the

distribution companies just

should be responsible to purchase

enough to meet the demand


associated with system losses and

residential consumers.

A cceleration of the

privatization of generation

held by state-owned portfolio

groups would be helpful for

minimizing the uncertainty and

constituting a more liberal

market. It is mentioned in Section

II that the market opening from

the generation side is just 30

percent, whereas at least 80

percent of consumers will be

eligible consumers by the

beginning of 2012. Privatization is

a prerequisite to provide new

opportunities for eligible

consumers and to ensure the

profundity in the market.

The division of duties between

distribution companies and

suppliers is not clear in Turkey.

The distribution companies are

implicitly responsible for

metering. Since eligible

consumers can purchase energy

from wholesalers or directly from

generators, the distribution

companies send the metering

values and bills for network

costs to those suppliers.

The suppliers collect the

money from the customers and

transfer the amount regarding

network activities to the

distribution companies.

However, this process is

not a written process. A

coherent regulation spelling

out the responsibilities of parties

regarding metering, invoicing,

etc., might be beneficial before the

separation of retail and

distribution activities.

Signing bilateral contracts is

one of the major ways to purchase



78

electricity in the competitive

market. Unfortunately, in Turkey,

the general understanding of

bilateral contracts is limited to

contracts signed by the parties

face to face. There are not any

over-the-counter (OTC) markets

in Turkey. That has created an

asymmetry of information

between parties, precipitating an

illiquid market. Forming OTC

markets might be helpful for

development of a more

competitive and transparent

market.

A national tariff scheme is

implemented in Turkey.

All consumers in the same group

pay equal network costs per unit

regardless of which distribution

region they are in. Ineligible

consumers who purchase

electricity via regulated tariffs

again pay for the national

electricity energy price

determined for the group they

belong to. The national tariff

should be superseded by regional

tariffs in the beginning of 2013,

according to EML. Hence, some

coherent decisions are required in

2012 regarding the

implementation of regional

tariffs. Furthermore, the number

of consumer groups, currently 24,

should be decreased, by

introducing fewer, broader

groups.

To conclude, Turkey clearly is

committed to restructuring its

electricity industry and has

adopted a roadmap. However,

some key supporting decisions

need to be made in order to form a

retail market consistent with the

purposes of the restructuring


process. If a bifurcation of policies

is implemented by the

government at the same

time, uncertainty inexorably

will emerge. Hence, the

restructuring process should

be advanced as envisaged

and the inconsistencies removed

as soon as possible. As the last

year of the transition period, 2012

is the year to alleviate the

uncertainty and adopt policies

consistent with the main goals of

the country.&

Endnotes:

1. See Navroz K. Dubash, RevisitingElectricity Reform: The Case for aSustainable Development Approach, UTIL.POL., Vol. 11 (2003), at 143-54.

2. See Stephen Littlechild, Foreword:The Market versus Regulation, inELECTRICITY MARKET REFORM: AN

INTERNATIONAL PERSPECTIVE, Ed. P.F.Sioshansi and W. Pfaffenberger,(Elsevier, 2006), at xvii-xxix.

3. See Stephen C. Littlechild,Competition in Retail Electricity Supply,DAE Working Paper WP0227, CMIWorking Paper 09, 2001.

4. Id.

5. See Paul L. Joskow, Why Do WeNeed Electricity Retailers? Or Can WeGet It Cheaper Wholesale?. Feb. 13, 2000,at http://econ-www.mit.edu/files/1127.

6. See Paul L. Joskow, (2009),Foreword: US vs. EU electricity reformsachievement, in ELECTRICITY REFORM IN

EUROPE: TOWARDS A SINGLE ENERGY

MARKET, Ed. J.-M. Glachant and F.Leveque, at xiii-xxix.

7. See Cristophe Defeuilley, RetailCompetition in Electricity Markets.ENERGY POL., Vol. 37 (2009), at 377-86.

8. See Stephen Littlechild, RetailCompetition in Electricity Markets,ENERGY POL., Vol. 37 (2009), at 759-63.

9. An English version of the ElectricityMarket Law can be found at:


http://www2.epdk.org.tr/english/regulations/electricity.htm.

10. EMRA was appointed to regulatedownstream petroleum and LPGmarkets in 2003 and 2005.

11. As of Aug. 22, 2011.

12. Self-generators (autoproducers)are the legal entities engaged inelectricity generation primarily fortheir own needs.

13. As of Aug. 22, 2011.

14. According to EML,‘‘autoproducers can sell a certainpercentage – not exceeding 20 percentin any case – to be determined by theEnergy Market Regulatory Board of theelectricity it has generated in a calendaryear within a competitive environment.The Board, under extraordinarycircumstances, may increase thispercentage by half of the original ratio.In case the amount of the electricity soldin a calendar year exceeds thepercentage set by the Board, obtaining ageneration license is a must.’’

15. TEIAS, at www.teias.gov.tr.

16. The total installed capacity ofindependent power producers is 28.5percent and that of self-generators is 5.9percent. However, since self-generators cannot sell more than 20percent of their generation, the marketopening rate calculated by thegenerators side is approximately 30percent.

17. The data are obtained from http://dgpys.teias.gov.tr. The numbers in thetable do not include eligible customerswho directly buy electricity fromdistribution companies having a retailsale license. The dates reflect the firstday of the month.

18. See European Commission (EC),DG Competition Report on Energy SectorInquiry, Brussels, 2007.

19. Commercial tariffs are those takenby the LV-distribution commercials.Industry tariffs are the tariffs paid byMV-distribution industrial customers.

20. ERGEG, 2009 Annual Report of theEuropean Energy Regulators, 2010, at:http://www.energy-regulators.eu/portal/page/portal/EER_HOME/ergeg_%20ceer%20annual%20report%2009.pdf.




http://www2.epdk.org.tr/english/regulations/electricity.htm

http://www2.epdk.org.tr/english/regulations/electricity.htm

http://www.teias.gov.tr/

http://dgpys.teias.gov.tr/

http://dgpys.teias.gov.tr/

http://www.energy-regulators.eu/portal/page/portal/EER_HOME/ergeg_%20ceer%20annual%20report%2009.pdf





why 2012 will be so important for the restructured turkish electricity market

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