Recent Developments in Electricity Storage Activities
Introduction
The first regulations on electricity storage activities were included in Electricity Market Law No. 6446 dated 14/3/2013 ("EML" or "Law"). Subsequently, the Regulation on Storage Activities in the Electricity Market ("Storage Activities Regulation"), which implements the law, entered into force through its publication in the Official Gazette dated 09.05.2021 and numbered 31479. Thereafter, as a result of the amendment made to the EML by Article 56 of Law No. 7417, which entered into force on 01.07.2022, the need to amend the Regulation on Storage Activities arose. Finally, the expected regulations on electricity storage activities were made by EMRA and entered into force through publication in the Official Gazette dated 19.11.2022 and numbered 32018.
Amendments
Law No. 7417 necessitated the publication of the Regulation Amending the Regulation on Storage Activities in the Electricity Market ("Regulation"). This law added paragraphs 10 and 11 to Article 7 of the EML:
(10) (Addition: 1/7/20227417/56 Art.) Legal entities undertaking to establish an electricity storage facility shall be granted a pre-license by the Authority for the establishment of an electricity generation facility based on wind and/or solar energy, up to the installed capacity of the electricity storage facility they undertake to establish. The provisions of the fourth paragraph of Article 7 of the Law shall not apply to these generation facilities. For the facilities to be established within the scope of this paragraph, the procedures and principles regarding applications, including the conditions for granting pre-licenses and licenses, their amendment and cancellation, the issues of recording the deposit as revenue in case of failure to fulfill obligations, and the delivery of the electricity generated to the system through the storage facility, shall be structured by the Authority through a regulation. The facilities to be established under this paragraph may benefit from the provisions of Article 6 of Law No. 5346.
(11) (Addition: 1/7/20227417/56 Art.) Legal entities holding electricity generation licenses based on wind and/or solar energy, undertaking to establish an electricity storage facility from generation facilities that are partially or fully in operation, are allowed to increase their capacity up to the installed capacity of the electricity storage facility they undertake to establish, provided that they do not transgress the areas specified in their licenses, the power supplied to the system at the time of operation does not exceed the installed capacity specified in their licenses and the connection decision within the scope of the amendments received from TEİAŞ and/or the relevant distribution company is positive. The provision of the first sentence of the second paragraph of Article 6/C of Law No. 5346 shall not apply to capacity increases within this framework. The procedures and principles regarding the application, including the distribution of the electrical energy generated to the system through the storage facility, shall be structured by the Authority through a regulation.
With these amendments to the Law, it became necessary to change some of the definitions in the Regulation on Storage Activities and to add new definitions. The Regulation also includes changes in definitions in its first article.
These are defined in the first article of the Regulation as follows:
Electricity storage facility: A facility capable of storing electrical energy by converting it into another type of energy and re-converting the stored energy into electrical energy for use and supplying it to the system, and
Electricity generation facility with storage: A generation facility established under the tenth and eleventh paragraphs of Article 7 of the Law. Furthermore, in the second article of the Regulation, the phrase "electricity storage unit within the electricity storage facility with storage" has been added after the phrase "integrated electricity storage unit" in the second paragraph of Article 4 of the Regulation on Storage Activities.
With the additions made to Article 7, paragraphs 10 and 11 of the EML by Law No. 7417 and the amendments introduced by the Regulation, four different facility/unit types for storage activities have been defined.
- Electricity storage unit integrated into the generation facility: An electricity storage unit within the boundaries of the generation facility site that can store the electrical energy generated in the generation facility or withdrawn from the system and supply the stored energy to the system for re-use. In the context of this class of unit, the electrical and mechanical power subject to the license should not be exceeded and the existing connection type, point and voltage level must not change.
- Electricity storage facility integrated with a consumption facility: Refers to electricity storage facilities connected to the same measurement point as a consumption facility.
- Stand-alone electricity storage facility: Electricity storage facilities directly connected to the grid without any connection to any generation or consumption facility. This type of storage facilities can be established by supply license holders by amending their licenses.
- Electricity generation facility with storage: refers to generation facilities with storage established in accordance with paragraphs 10 and 11 of Article 7 of the Law. Although the amendment to the Law was made earlier, the Regulation sets out the procedures and principles of these two types of storage.
Other important changes made by Article 3 of the Regulation involve fundamental changes to Article 5 of the Regulation on Storage Activities, which regulates the establishment and activities of electricity storage units integrated into generation facilities. One of the most significant of these is the simplification of paragraph 1, which introduces the following statement: "Legal entities holding a generation license may install an electricity storage unit integrated to a licensed generation facility." and the regulation of the installed capacity limitation in a separate paragraph, which was included in the previous version before the amendment. The paragraph that imposes this limitation is the amended 7th paragraph. "(7) The amount of energy to be supplied to the system on the basis of the settlement period by electricity generation facilities with storage and generation facilities including an integrated electricity storage unit, cannot exceed the amount of generation that the generation facility can produce with its electrical installed power included in its license." As can be seen here, in addition to the integrated electricity storage unit, paragraph 7 also introduces a limitation on electricity generation facilities with storage. Similarly, under newly added paragraph 11 of the Article, this Article shall also apply to electricity storage units established within electricity generation facilities with storage.
Another noteworthy amendment to Article 5 of the Regulation on Storage Activities is in the 9th paragraph added by the Regulation. In this context, it has been made compulsory for the electricity generated in electricity generation facilities with storage to be supplied to the transmission or distribution system through the electricity storage unit. In the event that electricity generation facilities with storage are installed according to the connection type defined in the eighth paragraph added to the same article, the energy supplied to the system will be deemed to be supplied to the system through the electricity storage unit. The relevant grid operator is obliged to take all necessary measures to ensure the application of the provisions of this paragraph regarding connection configurations, measurement, and monitoring of operational status.
The 10th paragraph added to Article 5 also regulates electricity storage units established under it. Those that meet the necessary conditions of the relevant legislation can participate in providing ancillary services and those that qualify as balancing units can participate in the balancing power market.
In addition, Article 2 of the Regulation introduces an additional provision on unlicensed electricity generation by adding a new paragraph to Article 5 of the Regulation on Storage Activities. This paragraph permits electricity storage facilities to be established in unlicensed electricity generation facilities, if they receive a call letter within the framework of the Regulation on Unlicensed Electricity Generation in the Electricity Market and if they make a monthly offset for surplus energy. However, the electricity storage facilities to be established under this provision are required to meet the conditions stated in the sixth paragraph of Article 37 of the Regulation on Unlicensed Electricity Generation in the Electricity Market.
Conclusion
All of the amendments and regulations discussed in this article have created a great demand for storage activities. These new developments make the facilities regulated in paragraphs 10 and 11 of Article 7 of EML attractive for all energy sector actors and investors.
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