Turkish parliament approves electricity market law, aiming to cut electricity bills

Published 06.06.2016 00:07
Updated 06.06.2016 01:10

The General Assembly of Parliament has passed the Electricity Market Law, which will usher in a new era in energy. The law, which is a result of a 16-hour study, aims to lower electricity bills for customers and support local production, which will reduce the resource-poor country's dependency on energy imports. Complicated regulations for energy investors will also be eliminated. Moreover, coal gas reserves are expected to enter as a source of electricity in energy markets. The General Directorate of Mineral Research and Exploration (MTA) will extend their research overseas. While Parliament was discussing the law, Energy and Natural Resources Minister Berat Albayrak answered parliamentarians' questions.

In response to the question of why Turkey has leaned towards nuclear energy rather than cheaper, solar energy, Albayrak said Turkey builds nuclear power plants because the productivity of such plants is five times higher than that of solar power plants of the same capacity. This ratio is approximately 60 percent in coal power plants and 30 percent in wind power plants. Albayrak said a nuclear power plant can produce stable electricity for 8,500 hours a year - which makes nuclear power more crucial than other resources.

Albayrak referred to countries like Korea and Japan which have made great progress in energy production and have come to develop their own nuclear technology and establish dozens of nuclear power plants through their balanced energy portfolio structures. Touching on the fact that such countries have succeeded in these areas even though they were energy importers in the past, Albayrak underlined that it is important to create an alternative and diversified energy portfolio with renewable resources by reducing dependence on foreign nuclear, coal and natural gas power plants.

According to the law, which will bring significant advantage and convenience to energy investors, Turkey will be assured of cheap and domestic electricity production. Furthermore, the General Directorate of Mineral Research and Exploration (MTA) will be able to explore energy and establish companies overseas for the realization of these activities. Structures to be constructed by the MTA in nuclear power plant fields overseas will be supervised by legal construction supervisory bodies which are authorized by the Turkish Atomic Energy Authority.

Unapproved electricity tariffs set to be revised

The Energy Market Regulatory (EPDK) will request the revision of unapproved tariff offers. The regulated and offered electricity tariffs to be implemented in the near future will be arranged in a way to include all costs and service charges and they will later be submitted to the EPDK for approval. The EPDK will request the tariff offers that it disapproves of within the scope of the regulation to be revised or approve them by directly revising them if necessary. Legal entities will also be obliged to implement the EPDK-approved tariffs. Approved tariffs will not include elements that are not directly related to market operations apart from costs and service charges regarding the tariff operation of the legal entity in question, but additional transmission fees will be exempted from this rule.

Privatization held through negotiated bidding

If the Energy and Natural Resources Ministry requests the privatization of assets belonging to the Electricity Generation Company (EÜAŞ) and its partners in order to establish an electricity production plant based on renewable energy resources or local coal, then the applicable provisions will be implemented during the privatization procedures under the Prime Ministry Privatization Administration. The privatization bid will be made by negotiation in order to determine the electric power purchase price that will be valid for the future electricity purchase agreement. If the Turkish Electricity Trading and Contracting Company (TETAŞ) fails to meet the amount of electric power stipulated in in the current agreements, it will procure the power from electric power companies with local coal. The Cabinet will determine all the procedures and principles, including the amount, period and price regarding procurements.

Coal gas to be introduced to economy

Coal gas in mines will be obtained from the ground or from mines. Mine owners will be provided with an operational license under the condition that the produced energy will stay within the borders of a mine's operational license. However, the amount of coal gas in a mine will be required to be at least 5 cubic meters per ton as a qualification before an operational license will be provided. The produced coal gas can enter the market on the condition that it will be licensed within the Natural Gas Market Regulation. The state share from the coal gas will be received in accordance with the amount determined in the regulation. The Cabinet will be authorized to increase this amount up to four times or reduce it by half upon request from the ministry. By adding a definition of biomass to the Usage of Renewable Natural Resources for Electricity Power Production regulation, electricity production will be made possible using organic and non-organic components from urban waste.

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