Important Amendments Concerning Unlicensed Electricity Generation Plants
Introduction
Despite the emphasis on “small-scale generation” regarding unlicensed (license-exempt) electricity generation plants in the Regulation on Unlicensed Generation in the Electricity Market (“Unlicensed Regulation”)[1] , especially in the last three years, quite a few unlicensed electricity generation plants have been established, which cannot be described as small-scale. The increasing number of such electricity generation plants based on renewable resources has started to raise issues concerning their integration into the grid.[2]
Taking into account the increasing number and generation capacity of unlicensed electricity generation plants, the Electricity Market Regulatory Authority (“EMRA”) published, for consultation, several draft amendments to the various regulations concerning the electricity grid.[3] These regulatory changes have entered into force after being published in the Official Gazette dated 21.01.2025 numbered 32789. Out of these amendments, when the ones relating to Electricity Market Ancillary Services Regulation (“Ancillary Services Regulation”)[4], Electricity Grid Regulation (“Grid Regulation”)[5] and Electricity Market Balancing and Settlement Regulation (“Balancing and Settlement Regulation”)[6] are examined, it would be seen that a variety of obligations are imposed on the part of the owners of unlicensed electricity generation plants connected to the grid at the transmission level.
In this newsletter, we will outline these obligations regarding unlicensed electricity generation plants, which are introduced through the amendments to the regulations.
Reactive Power Control Service
The first notable issue out of the amendments made to the Ancillary Services Regulation is the addition to its article 39, which obliges the owners of unlicensed electricity generation plants (i) connected to the grid at the transmission level at 66 kV and above and (ii) with an installed capacity of over 30 MW to sign a reactive power control agreement with TEİAŞ. In the amended version of article 39 of the Ancillary Services Regulation, it is regulated that plants based on wind energy and solar energy will participate in the reactive power control service under the conditions specified in the provisions of the Grid Regulation. Indeed, with the amendment made to Article 109 of the Grid Regulation, it is regulated that unlicensed plants based on wind energy and solar energy with the above-mentioned characteristics are obliged to participate in the reactive power control for power factor values within the limits specified in Annex 18 of the regulation.
In light of these amendments, unlicensed electricity generation plants that meet the technical values mentioned above will be required to sign a reactive power control agreement and participate in reactive power control. This ancillary service agreement for the provision of reactive power control will include the penalties to be imposed on generation plant owners in case of (i) failure to provide reactive power control or synchronous compensation service (ii) failure to fulfill the data submission obligation regarding the service, and (iii) failure to submit the test report on reactive power control to TEİAŞ in due time.
The obligation to provide reactive power control service will apply not only to new unlicensed electricity generation plants, but also to those already installed. Under the provisional article 10 added to the Ancillary Services Regulation, electricity generation plants for which provisional acceptance has been carried out as of the effective date of this article will be obliged to submit their reactive power test certificates to TEİAŞ within 180 days of the effective date of this article.
Emergency Precautions
As is known, article 63 of the Grid Regulation stipulates that in the event of critical[7] or unstable[8] system conditions defined in the same article, emergency precautions shall be implemented by TEİAŞ and system users. Emergency precautions for generation plants are regulated under Article 65 of the Grid Regulation. According to the provision, the National Load Dispatch Center (MYTM) and/or Regional Load Dispatch Center (BYTM) may notify the legal entities and/or other users engaged in generation activities to protect the system's operational safety in case of emergency. The relevant generation plant does not need to be a balancing unit for MYTM or BYTM to issue an emergency notification. As per Article 75 of the Balancing and Settlement Regulation, emergency notifications have the same structure as load-taking and load-shedding instructions under the balancing power market. System users are obliged to perform emergency notifications. If system users cannot perform an emergency notification, they shall notify MYTM or BYTM immediately (as the case may be).
With the amendment to the Grid Regulation, unlicensed electricity generation plants connected at the transmission level became a party to the emergency precautions regulated in Article 63 of the Grid Regulation. Indeed, with the addition to Article 75/2 of the Settlement and Balancing Regulation, it is regulated that the owners of unlicensed electricity generation plants connected to the transmission system may be given an emergency instruction by TEİAŞ for the relevant generation plants.
In addition to our above explanations, it should be noted that the unlicensed electricity generation plants are not included in article 22/2 of the Balancing and Settlement Regulation, which defines balancing units. Hence, although unlicensed electricity generation plants connected at the transmission level are subject to emergency precautions, they do not qualify as balancing units in the Balancing and Settlement Regulation.
Ongoing Notification Requirements
As per the amendments to the Balancing and Settlement Regulation, unlicensed electricity generation plants connected to the grid at the transmission level will be obliged to notify TEİAŞ of their finalized intraday generation plans (FIDP) and available capacities. To be able to make the said notification, the necessary authorization process in the relevant systems will be carried out by the authorized supply company and/or aggregator in whose portfolio they are located.
In addition, generation plants connected at the transmission level must designate at least one person who could be accessed immediately in case market management system’s failure procedures apply.
Therefore, with the amendments, unlicensed electricity generation plants connected to the grid at the transmission level will also have ongoing notification obligations.
Conclusion
With the amendments published in the Official Gazette on 21.01.2025, various obligations were introduced at the grid level for unlicensed electricity generation plants connected at the transmission level. However, it is noteworthy that no amendments were made to the Unlicensed Regulation. These amendments should be separately evaluated against article 32/4 of the Unlicensed Regulation, which prohibits the sale of electricity generated from plants within the scope of the Unlicensed Regulation in organized wholesale markets. We believe a reference to the new provisions of the Grid Regulation, Ancillary Services Regulation, and Balancing and Settlement Regulation would be appropriate.
In conclusion, these amendments create a different class of unlicensed electricity generation plants. Unlike other unlicensed electricity generation plants, they are subject to various obligations concerning the electricity grid. Among these obligations, the ones that apply to all plants connected at the transmission level are the obligation to notify FIDP and available capacity and being subject to emergency precautions. In addition, among the unlicensed generation plants connected at the transmission level, those with a connection voltage level of 66 kV and above and an installed capacity of more than 30 MW will be obliged to provide reactive power control services.
- Published in the Official Gazette dated 12.05.2019 and numbered 30772.
- Indeed, the Energy Market Regulatory Authority (“EMRA”) drew attention to the increasing number of distributed generation power plants in its general rationale for the draft Regulation on Aggregation Activities in the Electricity Market. See: EMRA, https://www.epdk.gov.tr/Detay/Icerik/4-14428/elektrik-piyasasinda-toplayicilik-faaliyeti-yonet (Access Date: 09.01.2025); This regulation draft has been published in Official Gazette dated 17.12.2024 and numbered 32755.
- EMRA, https://www.epdk.gov.tr/Detay/Icerik/4-15652/mevzuat-taslaklarinin-goruse-acilmasi, (Access Date: 09.01.2025).
- Published in the Official Gazette dated 26.11.2017 and numbered 30252.
- Published in the Official Gazette dated 28.05.2014 and numbered 29013.
- Published in the Official Gazette dated 14.04.2009 and numbered 27200.
- Critical operating conditions occur when the system frequency (f) is within the following parameters: 47,5Hz ≤ f < 49,5Hz ve 50,5Hz < f ≤ 51,5Hz. (Grid Regulation art. 63/1-c).
- Unstable operating conditions occur when the system frequency (f) is within the following parameters: : f < 47,5 Hz ve 52,5 Hz < f. (Grid Regulation art. 63/1-ç).
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