162 / 522
General Overview of the Liberalization Process of the Electricity
Market
Along with the changes come into play since the entry into force
of the Electricity Market Law, the establishment of a competitive envi-
ronment in The Turkish electricity market accelerated. The aim of the
Electricity Market Law is to create a financially powerful, stabilized
and transparent electric energy market that operates competitively, in
accordance with private law provisions, and to provide independent
regulations and auditing procedures within this market, for the purpose
of procuring sufficient, high-quality, constant, and low-cost electricity
to consumers.
In the past, the generation, transmission, distribution and retail
operations of electricity was on public property, in a vertically inte-
grated structure. In order to enable entry into the electricity market,
and to create a sector where balanced competition is achieved, the divi-
sion of a vertically integrated monopoly market has arisen. This divi-
sion could be defined as the separation of the transmission and distri-
bution, which are, collectively, considered as a natural monopoly from
the perspective of generation and marketing.
Determining market entrance and exit conditions, as well as the
tariffs regulating the services that enterprises utilize and/or submit, and
the retention of anti-competitive activities of the enterprises, are essen-
tial to establish competition in the marketplace
2
.
As is stated in the Report, the first stage of the liberalization
process of The Turkish electricity markets was the period after the divi-
sion of the Turkish Electricity Institution (“TEI”). The TEI was divid-
ed into the Türkiye Elektrik Üretim A.Ş. (the Turkish Electricity
Generation Company) (“TEAŞ”) and Türkiye Elektrik Dağıtım A.Ş.
(the Turkish Electricity Distribution Company) (“TEDAŞ”). Afterwards,
TEAŞ split into three independent entities.
As of 2001, which was the year when Law No. 4628 entered into
force, the private sector took its place in the electricity market and
many privatizations ensued. The Report stated that by virtue of the
146
NEWSLETTER 2015
2
CAN, Mustafa Erdem
, Hukuki Açıdan Elektrik Piyasasında Rekabet, Ankara 2006, p. 7.