TURKEY: Electricity Market Law No. 6446 of 2013

Meta Data
Title in national language: 
Elektrik Piyasasi Kanunu
Draft: 
No
Revision of previous policy?: 
No
Draft Year: 
2013
Effective Start Year: 
2013
Scope: 
National
Document Type: 
Law
Economic Sector: 
Power
Energy Types: 
Power, Renewable, Hydropower, Solar, Wind, Other
Issued by: 
Government of Turkey - Council of Ministers
Overall Summary: 
This Law aims to ensure the establishment of a financially sound, stable and transparent electricity market operating in a competitive environment under, and subject to, private law provisions. It also aims to ensure the independent regulation and supervision of the private market for purposes of providing sufficient, good quality, uninterrupted, low cost and environment-friendly electricity to consumers. It applies to electricity generation, transmission, distribution, wholesale and retail sale, import and export, market operation as well as to the rights and obligations of all real and legal persons engaged in such activities. ---Note: TEIAS: Turkish Electricity Transmission Corporation; TETAS: Turkish Electricity Trade and Contracting Corporation.
Renewable Energy
RE reductions in taxes: 
For the electricity generation facilities which are based on renewal energy sources under the Law no. 5346 and are to be put into operation until 31/12/2020, including those in operation as of the day of publication of this Law, [...], eighty-five percent deduction shall be applicable to the values of investment and permits in the first ten years of their operating period, rent, easement and utilization right, as of the date of permit granted by the authority.
Environment
Energy environmental priorities: 
Objective: [...] to ensure the independent regulation and supervision of this market for purposes of providing [...] environment-friendly electricity to consumers.
Energy-water nexus: 
A right of water use agreement shall be signed with the beneficiaries of the hydroelectric power plants [...].
Pricing
Renewable energy subsidies: 
For the electricity generation facilities which are based on renewal energy sources under the Law no. 5346 and are to be put into operation until 31/12/2020, including those in operation as of the day of publication of this Law, [...], eighty-five percent deduction shall be applicable to the values of investment and permits in the first ten years of their operating period, rent, easement and utilization right, as of the date of permit granted by the authority.
Energy pricing: 
1) The tariffs set forth under this Law and proposed to be implemented in the following period shall be prepared by the relevant legal entity in line with such principles and procedures as will be prescribed by the Board and submitted to the Authority for approval.---Types of tariffs subject to regulation by the Board shall be as follows: a) Connection tariffs:[...]b) Transmission tariff: [...] c) Wholesale tariff:[...] c1) Distribution tariffs:[...] d) Retail sale tariffs:[...] e) Market operating tariff: [...] f) Last resource supply tariff:[...].---A price equalization mechanism, which is established in such a way as to protect, in whole or in part, the consumers who buy electrical energy out of tariffs subject to regulation from interregional cost differences or from existing price differences, and the implementation matters of which are regulated under a communiqué prepared by the Authority, shall be implemented until 31/12/2015. All public and private distribution companies and assigned supplier companies shall be included in the price equalization mechanism.
Energy Supply and Infrastructure
Infrastructure development priorities: 
TEIAS shall, in such a way as to minimize the transmission constraints, be responsible for ensuring the planning, installation of the transmission network, for maintaining the system security and preparing a twenty-year Long Term Electrical Energy Generation Development Plan under a generating capacity projection.
Trade
Standard power production and purchasing agreements: 
TETAS shall execute the energy purchase and sale agreements signed under the scope of existing agreements. It may also sign energy purchase and sales agreements under the scope of existing concession and implementation contracts, and may sign electrical energy import or export agreements under the scope of intergovernmental agreements.----Distribution activities shall, under a license, be conducted by the distribution company at such region as specified in the license thereof.---The export of electrical energy and/or capacity to countries, [...], shall be performed by the companies and generation companies holding a supply license [...].---The import of electrical energy and/or capacity from countries, [...], shall, subject to the approval of the Board, be performed by the companies holding a supply license[...]
Investment
Financial incentives for energy infrastructure: 
Infrastructure works to be performed by legal entities holding a transmission or distribution license shall not be subject to infrastructure excavation license charge.---For the electricity generation facilities which are based on renewal energy sources under the Law no. 5346 and are to be put into operation until 31/12/2020, including those in operation as of the day of publication of this Law, [...], eighty-five percent deduction shall be applicable to the values of investment and permits in the first ten years of their operating period, rent, easement and utilization right, as of the date of permit granted by the authority.
Tax and duty exemptions for energy equipment: 
Under the scope of privatization of electricity distribution companies and generating facilities and/or companies, profits arising from transfer, merger, demerger, partial demerger procedures to be made until 31/12/2023 shall be exempt from corporate tax.---(1) For purposes of creating the required supply capacity in the short term along with a sufficient reserve, the legal entities holding a generation license, which will start operating until 31/12/2015 for the first time shall be provided with the following incentives. The authority to extend the said duration up to five years shall rest with the Council of Ministers. a) Fifty percent discount shall be made for the system use prices of transmission systems for a period of five years as of the date of commissioning of generation facilities. b) At the investment period of generating facilities, the procedures and works performed in respect of generating facilities shall be exempt from charge, and the documents and papers executed shall be exempt from stamp duty.
Electricity wholesale markets: 
Wholesale and retail sale activities shall be carried out by generation companies and supply companies of public and private sector under a supply license in accordance with this Law and regulations made pursuant to this Law.---The legal entities holding a wholesale and retail sales license shall, by protecting their rights under their existing license, be granted ex officio a supply license free of charge.
Public Private Partnerships: 
Generation activities shall be carried out by generation companies of public and private sector and legal entities located at organized industrial zone under the scope of their licenses.---Wholesale and retail sale activities shall be carried out by generation companies and supply companies of public and private sector under a supply license in accordance with this Law and regulations made pursuant to this Law. (2) Supply companies may, without a regional restriction, conduct the activities of wholesale or retail sale to consumers.
Governance
Energy management principles: 
Objective: to ensure the establishment of a financially sound, stable and transparent electricity market operating in a competitive environment under, and subject to, private law provisions as well as to ensure the independent regulation and supervision of this market for purposes of providing sufficient, good quality, uninterrupted, low cost and environment-friendly electricity to consumers.---The activities which may be carried out in the market subject to the obtainment of a license under Law shall be as follows: a) Generation activities b) Transmission activities c) Distribution activities ç) Wholesale activities d) Retail sale activities e) Market operating activities f) Import activities g) Export activities.---Electrical energy transmission activity may exclusively be carried out by TEIAS under the scope of a license.----The Ministry shall advise to the Privatization Administration its proposals and opinions regarding the privatization of TEDAS, EUAS and the establishments, affiliates, subsidiaries, business and business units thereof as well as the assets thereto.
Energy institutional structures: 
TETAS shall execute the energy purchase and sale agreements signed under the scope of existing agreements. It may also sign energy purchase and sales agreements under the scope of existing concession and implementation contracts, and may sign electrical energy import or export agreements under the scope of intergovernmental agreements.---The Ministry shall be responsible for monitoring the supply security of electrical energy and adopting measures with respect to supply security.