The Regulation Amending the Electricity Market Licence Regulation (the “Regulation”) published in the Official Gazette on 23 December 2015 brings substantial changes to the Electricity Market Licence Regulation. Below are the most significant changes introduced by the Regulation to the licencing and pre-licencing procedures applicable to electricity generation facilities:
- Application dates for wind and solar pre-licences: The Energy Market Regulatory Authority (“EMRA”) will accept applications for wind and solar pre-licences on the first five business days of April and November, respectively. The application dates were previously the first and last five business days of October for wind and solar, respectively.
- Changes to applications for solar and wind projects: Previously, a licence applicant for a solar or wind project must have submitted all necessary documentation and information as requested by EMRA at the time of the application. However, the Regulation now only requires the submission of a limited number of documents during the initial application, thereby significantly reducing the initial burden on licence applicants for solar or wind projects. The remaining documentation shall then only become due within 90 days of the acceptance or deemed acceptance (i.e. no objections raised to the opinion within 10 business days) of the connection opinion issued by Türkiye Elektrik İletim A.Ş. (Turkish Electricity Transmission Corporation). It is expected that EMRA will issue within the upcoming weeks a list of documents to be submitted with the initial application and afterwards. For other pre-licence applications, the applicant will still need to provide EMRA with all the necessary documentation and information as part of its application package.
- Changes to shareholding structure: In principle, the transfer of shares representing 10% or more of the share capital of a licence holder or otherwise resulting in a change of control of the licence holder is subject to pre-approval by EMRA. Share transfers are strictly restricted during the pre-licencing period, although, a limited number of exceptions do exist. The Regulation has added two new exceptions to this restriction: (i) changes in the shareholding structure, whether direct or indirect, resulting from the public offering of shares at the licence holder’s level or its direct or indirect shareholders’ level; and (ii) shareholding changes resulting from the use of subscription rights.
- Defined timeframe for transfer of licences: There are a limited number of instances where generation licences can be transferred. One of these instances is the transfer of a generation licence to another legal entity with the same shareholding structure as the current licence holder. However, while this is permissible, the transferee will have an obligation to fulfil all the obligations expected from a licence holder within the timeframe defined by EMRA., otherwise, EMRA will reject such transfer.
- Broadened scope of prohibition: Previously, shareholders who owned 10% or more of the capital in an entity whose licence was cancelled were prohibited from applying for a licence through a new applicant. However, the scope of this prohibition has been extended by the Regulation to include the board members (or managers for limited liability companies) and the direct and indirect shareholders.
- Environmental Impact Assessment Report: Save for pre-licence applications based on renewable energy (i.e. wind, solar, hydroelectric and geothermal energy), an Environmental Impact Assessment Report (“EIAR”) is required to be submitted during the application process. Previously, the EIAR needed to be obtained after the pre-licence was granted regardless of the type of project. In line with this change, applicants for pre-licences for projects other than wind, solar, hydroelectricity and geothermal projects, whose applications are in the assessment process, are required to submit an EIAR to EMRA within 24 months from 23 December 2015. Otherwise (except for force majeure situations), their applications will be rejected and the guarantee (provided to the EMRA during the application process to secure the future obligations of electricity generation) will be returned to the applicant.
- Less bureaucracy during pre-licence period: The Regulation has abolished the (i) requirement to execute a system use agreement; and the (ii) requirement to obtain official opinions with regards to whether the project site is within a military prohibited zone or security zones during the pre-licencing period.
- Priority order: In the event that there are more than one renewable energy based pre-licence applications for the same location, priority will be given in the following order: (i) geothermal, (ii) hydroelectricity, (iii) wind and (iv) solar energy projects.