Projects

General government authorisation

What government authorisations must investors or owners obtain prior to constructing or directly or indirectly transferring or acquiring a renewable energy project?

Provided that the response to question 4 is also applicable for this question, it should be noted that legal persons that engage in electricity market operations shall be able to initiate their activities only after securing a separate licence for each activity and for each plant if those activities are to be conducted in more than one plant.

All legal persons subject to private law provisions have to be incorporated as a joint stock company or limited liability company under the provisions of Turkish Commercial Code No. 6102, and all shares of joint stock companies have to be registered, apart from the public companies traded in exchange markets under the capital market legislations.

The company’s articles of association shall be submitted, indicating that the minimum equity capital of the company has been increased by five per cent of the total investment amount anticipated by the authority for the generation plant. If the legal person is a joint stock company, the articles of association for the relevant company must include a provision that all the shares are registered and the company shall not be entitled to issue bearer shares with the exception of public companies traded in exchange markets under capital market legislations as well as a provision that the company shall not make any variations in the shareholding structure during the preliminary licensing period and the company shall seek the approval of EMRA if it intends to amend the articles of association in order to reduce the equity capital.

Also, legal persons acting in the market are obliged to obtain the permission of EMRA for any processes and transactions that shall lead to change in the title to or usufruct right of the plants.

Offtake arrangements

What type of offtake arrangements are available and typically used for utility-scale renewables projects?

See questions 4 and 6 for the special regulations on renewable energy field. Plants that are not included in YEKDEM system and those for which YEKDEM liabilities have expired may sell electricity to supply companies or end users through bilateral agreements subject to the provisions of private law just as conventional power generation plants. Also, they may engage in trade activities in day-ahead and day markets.

Procurement of offtaker agreements

How are long-term power purchase agreements procured by the offtakers in your jurisdiction? Are they the subject of feed-in tariffs, the subject of multi-project competitive tenders, or are they typically developed through the submission of unsolicited tenders?

The long-term bilateral agreement market is open to development in Turkey. The general trend is to trade the electricity in day-ahead and day markets or evaluate it under the YEKDEM system for renewable energy plants.

Operational authorisation

What government authorisations are required to operate a renewable energy project and sell electricity from renewable energy projects?

The roles of private and public sector institutions with regard to both licensed and unlicensed projects have been detailed above and the fact that it has been guaranteed for the electricity to be sold over the amount stated under the list attached to the Law on the Utilisation of Renewable Energy Sources for Electricity Generation No. 5346, and the relevant rights and obligations of the parties was emphasised. Apart from this mechanism, there is no other obligation against any government entity with regard to establishment of a renewable energy plant and sale of electricity produced in such plants.

Decommissioning

Are there legal requirements for the decommissioning of renewable energy projects? Must these requirements be funded by a sinking fund or through other credit enhancements during the operational phase of a renewable energy project?

If a licence holder legal person intends to terminate its operations under the licence, a written application before EMRA shall be filed, along with the justifications for termination at least six months before the intended termination date, whereas distribution companies and commissioned supply companies shall be required to make the relevant application at least 12 months before the intended termination date. Nevertheless, EMRA may, at its sole discretion, not require observation of this notice term based on the impact of the intended termination on the market. Under this application, it is mandatory to list the obligations of the licence holder legal person as of the intended termination as well as the measures to be taken for fulfilling those obligations.

If EMRA confirms the termination request as a result of the assessment, the licence shall be terminated on the date specified in the resolution rendered by EMRA. If EMRA becomes convinced that the termination will give rise to any condition that will be to the detriment of consumers and market conditions, it may deny the request or postpone the termination by duly informing the licence holder legal person of the justifiable reasons for the decision.

If any legal person holding a distribution licence intends to terminate the licence prematurely, the licence shall not be regarded as terminated until a new legal person receives a licence for conducting the operations indicated in the licence.

Decommissioning is not yet explained in detail in Turkish legislation. Therefore, this regulation is open to development for both renewable energy investments and conventional plants.