The impact of Brexit on the United Kingdom's electricity market is still being debated. Since the U.K. left the European Union's energy market mechanism, electricity trade has become less integrated, more expensive and more complex. Negotiations with the European Union have begun, where the U.K. continues to make its voice strongly heard.

London's message to European countries is clear: Mutual dependence in energy security and trade is of critical importance.

Particularly through the support and resilience it provided during the Russia-Ukraine war, it argues that energy cooperation is beneficial for both sides. Although the new system it has established does not fully meet expectations in terms of cost and efficiency, the trust built in the past and its role in crisis management function today as a strategic leverage in negotiation processes. Therefore, it conveys the message that it provided confidence during times of crisis and now expects reciprocity, emphasizing that the other side’s contribution is vital for both consumer interests and carbon reduction targets.

From the perspective of the EU, the situation is symmetrical. The role of the U.K. as a reliable and integrated partner is of key importance in terms of cross-border trade, long-term planning and price stability.

However, there are two questions remaining at the negotiation table: through which mechanism will the U.K. and the EU sustain this cooperation, and how will they establish a solution that is both efficient and low-cost for both sides?

Türkiye's critical issues

In Türkiye, the situation is entirely different. The Turkish electricity market has undergone a significant transformation over the past decade.

As of 2026, Türkiye’s total installed electricity capacity has reached approximately 123 GW. Around 62% of this consists of renewable sources. Solar and wind capacity have reached approximately 40 GW in total, while hydroelectric capacity holds a high share overall. This development has occurred through increasing Renewable Energy Resource Area (YEKA) tenders and private-sector investments in recent years.

However, Türkiye presents significant opportunities and challenges both in terms of the national legal framework and international interconnection dynamics. While laws and regulations govern the liberalization and integration of the market, technical harmonization efforts with ENTSO-e European Network of Transmission System Operators for Electricity, aim to strengthen the European connection.

Other than that, is everything perfect? Certainly not.

The critical issue emerging within our market’s internal dynamics is transmission connection capacity and generation connection limits. According to data published by Turkish Electricity Transmission Corporation (TEIAŞ) and Ember’s 2025 report, a shortage of connection capacity at the transmission level emerged from 2024 to 2025.

During this period, approximately 65% of the total 11.6 GW of unlicensed project applications made to connect to the system at the transmission level, around 7.5 GW, were rejected due to regional capacity constraints. In particular, 96% of the 3.5 GW capacity allocated at the transmission level, 3.36 GW, was assigned in a short period of time, yet as of September 2024, no new capacity at the transmission level has been announced, and therefore, many applications have continued to be rejected.

This situation appears as a capacity bottleneck that limits not only renewable energy investments but also the overall growth of the electricity market. At the distribution level, the available capacity has remained around 0.52 GW, and sufficient space for new applications has not been found.

These data reveal that Türkiye faces critical bottlenecks in terms of both grid flexibility and commercial connection capacity in its energy market. This capacity crisis in the Turkish electricity sector is also frequently voiced by investors.

Energy project investors emphasize that the current process makes it difficult to implement new projects due to insufficient connection capacity and that more predictable and transparent capacity announcements in system planning would increase investor confidence. Therefore, overcoming capacity and flexibility problems on the supply side is considered critical for accelerating renewable energy investments and ensuring grid security.

These shortcomings do not overshadow Türkiye’s strategically stable position. However, resolving capacity bottlenecks stands out as a step that will further strengthen Türkiye’s advantage both in domestic market growth and in integrated electricity trade with Europe.

Differing integration structures

Türkiye stands in a strong position regarding integration with Europe in the electricity market. Observer membership with ENTSO-e and the long-term synchronization agreement provide Türkiye with a solid basis of alignment in commercial capacity allocation with Europe and enable the system to operate based on common standards with the European internal energy market. In this way, supply-demand balance, capacity allocation, and market planning can be carried out in coordination with Europe.

The U.K., on the other hand, left the EU’s internal energy market mechanisms after Brexit, and trade has become subject to a less integrated and relatively more costly regime.

The differences in the relationship of Türkiye and the U.K. with European electricity markets are the result of their energy market integration strategies. While Türkiye has adopted a model that maintains legal and technical harmonization processes with the EU and carries out coordinated capacity allocation with ENTSO-e, the U.K. withdrew from these joint mechanisms after Brexit and transformed its trade structure into a more independent but more costly and less integrated framework.

In the EU, the market coupling system is a structure that automates cross-border capacity allocation and electricity trade between countries. When the U.K. left this system, it had to conduct existing interconnector trade with the EU under its own independent rules. This technically meant establishing a new connection system, yet the U.K. could not achieve this with a fully integrated and efficient system.

Trade began to be carried out through explicit auctions, meaning that capacity and price were determined separately for each interconnector. This is a more manual and more costly method compared to the implicit trading mechanism within the EU internal market. In practice, the U.K. established a new interconnector management system, but compared to the EU system, it became inefficient and expensive.

In the current negotiations, the U.K. is requesting the establishment of a new trade and capacity allocation model that is compatible with the EU but preserves its own independence, rather than taking back the previous system exactly as it was.

London’s objective is clear: to increase efficiency in electricity trade, reduce costs and use interconnector capacity more effectively. The EU approaches the issue with the concern of keeping the market strong and stable, which makes finding a middle ground in negotiations difficult.

In the current process, the search for solutions continues over partial integration and harmonized regulatory models, yet it has not become clear which model they will agree upon. This uncertainty stands out as a critical factor determining the strategic positions of the parties in both electricity trade and cross-border capacity management.