Licensing Procedure in Turkish Electricity Sector (General Framework and Current Status) Iskender Basat SAHIN Energy Expert - EMRA isahin@epdk.org.tr Ankara 22/01/2013
Licensing Procedure in Turkish Electricity Sector: General Presentation Plan 1. Introduction 2. Licensing Procedure in EMRA 3. Current Situation on Licences 2
Percent - Introduction Licensing Procedure in Turkish Electricity Sector; General As one of the most important developing countries in the world, Turkey, in line with its strong economic development in recent years, is faced with a rapidly increasing demand for energy. (especially electricity). Turkey, entered into a phase of significant investment in energy sector to meet the huge demand for energy 6,0 5,3 5,0 4,0 4,0 3,6 4,1 3,0 2,0 1,0 0,0 1971-1980 1981-1990 1991-2000 2001-2011 Average Economic Growth of Turkey* 3
- Introduction Turkey Electrical Power View (GWh) Years PRODUCTION IMPORT EXPORT CONSUMPTION 2002 129.399,50 3.588,20 435,1 132.552,60 2003 140.580,50 1.158,00 587,6 141.150,90 2004 150.698,30 463,5 1.144,30 150.017,50 2005 161.956,20 635,9 1.798,10 160.794,00 2006 176.299,80 573,2 2.235,70 174.637,30 2007 191.558,10 864,3 2.422,20 190.000,20 2008 198.418,00 789,4 1.122,20 198.085,20 2009 194.812,90 812 1.545,80 194.079,10 2010 211.207,70 1.143,80 1.917,60 210.434,00 2011 229.395,10 4.555,80 3.644,60 230.306,30 With respect to 2002; Electricity production increased 77,3%; Electricity consumption increased 73,7%; Electricity export increased 27,0%. 4
- Introduction Turkey, which has Europe's fastest-growing energy market; as a result of investments made in the last few years, the total installed capacity exceeded the level of 56.000 Megawatts (MW). 5
1. Introduction Turkey has the public monopolistic power sector until 1984. The first steps were taken in 1984 to end the monopoly of the public sector. In 1984, the private sector, though few in number, began to operate in the market in electricity generation. But the real advancement against the public monopoly occurred after The Energy Market Law (EML) No. 4628 was published in March 2001, with the aim of to ensure the production of cost-effective, sufficient, reliable and qualified electricity and to make available for the use of the end users. Before the EML, all of these activities were handled by state companies. The EML essentially foresees a vertically integrated electricity sector, wherein the three main activities of the sector, namely generation, transmission and distribution shall be carried out by separate entities and in a competitive market. 6
1. Introduction At present the following actors are dealing with generation: 1. EUAS (State owned generation company): It is the largest generating company in the market. It is expected that all the generation facilities will be privatized in the following years. 2. IPP s: These companies shall generate electricity in their own facilities and shall expected to sell their energy to the free market. 3. Auto-producers: They are the legal entities who generate electricity mainly for their own consumption. Transmission: Transmission is carried out by a public authority called Turkish Electricity Transmission Inc. (TEİAS). TEİAS is a natural monopoly. Distribution: Distribution activities are carried out by regional distribution companies and TEDAS was the owner of all distribution assets before the EML. * There are 21 distribution regions and 13 of them have already been privatised. 7
2. Licenses and Licensing Procedure in EMRA All market activities are conducted under licenses issued by «Energy Market Regulatory Authority» (EPDK/EMRA) founded on November 19th, 2001. License is the permission document given by the EMRA for legal persons to be able to operate in the market in accordance with EML and Electricity Market Licensing Regulation. Separate licenses are required for each market activity and for each facility where the activity is carried out. Types of licenses are: - Generation License - Auto-production License - Transmission License (TEİAs) - Distribution License - Wholesale License - Retail Sales License The general licensing procedure is as follows: Generation Activities Network Licenses Commercial Activities 8
2. Licensing Procedure in EMRA 1- License application 2- Review and Evaluation Stage 3- License application deemed eligible (proper) by EMRA 4- Granting of License by EMRA Permission and Approvals Construction Commercial Operation 9
Source / Fuel Application Stage Total Number Licensing Procedure in Turkish Electricity Sector; General 3. Current Situation on Licences Capacity (MW) Review and Evaluation Stage Total Number Capacity (MW) Applications Deemed Eligible Licensed TOTAL Total Number Capacity (MW) Total Number (End of 2011 Except Public Plants) Capacity (MW) Total Number Capacity (MW) Wind 4 64,60 14 547,60 87 3.799,10 209 7.464,90 314 11.876,20 Hydro 105 2.704 126 1.841,09 289 3.496,40 751 18.507,73 1.271 26.549,21 Fuel-Oil 1 25,32 37 1.227,82 38 1.253,14 Natural Gas 49 17.460,17 42 11.700,19 37 7.989,52 275 20.630,56 403 57.780,43 Lignite 3 1.282 2 502,66 29 1.638,55 34 3.423,21 Anthracite 5 2.891,64 5 1.416,55 4 1.684,59 20 8.206,28 34 14.199,06 Asphaltite 1 135 2 675 3 810 Geothermal 4 66 4 84 17 363,97 25 513,97 Waste Gas 1 4,02 6 108,67 7 112,70 Biogas 4 10,53 3 4 4 28,75 13 21 24 64,28 Biomass 5 41,21 4 40,25 4 30,27 5 16,16 18 127,89 Pyrite 1 11,50 1 11,5 Naphta 2 19,40 2 19,4 LPG 2 15,55 2 15,55 Nuclear 1 4.800 1 4.800 TOTAL 181 26.524,17 201 20.936,34 427 17.188,94 1.369 58.907,07 2.180 121.556,52 Number of Licences Granted with respect to Energy Sources (MW) (2012) 10
3. Current Situation on Licences Source Installed Capacity (MW) Ratio (%) Natural Gas* 19.558,0 35,30 Hydro 18.811,0 33,95 Coal* 12.522,0 22,60 Wind 2.001,0 3,61 Fuel-Oil / Diesel* Biowaste / Biogas 1.948,0 3,52 115,0 0,21 Geothermal 114,0 0,21 Other* 332,0 0,60 TOTAL 55.401,0 100 Installed Capacity (MW, September 2012) Thermal (Natural Gas)* 35,30% Other 0,60% Waste/Biogas 0,21% Hydro 33,95% Geothermal 0,21% Thermal (Coal) * 22,60% Fuel-Oil / Diesel* 3,52% Wind 3,61% Installed Capacity with respect to Energy Sources (MW) (September 2012) 11
FINAL COMMENTS The liberalization movement in Turkish electricity sector, which began in 2001 still continues. The state owned generation company EÜAS is still the largest electricity generation company in the market, but with the privatization of state owned distribution and generation assets, the final stage will be reached in the process of establishing a competitive electricity market envisioned in the EML. The dominant capacity consists of thermal and hydro power. But there is a big potential in wind, solar, geothermal and hydro. Licensing activities rapidly continues for every energy source. In parallel with the implementation of regulations and high increases in the electricity demand (about 7,5% per annum), the electricity sector has the capacity to attract more investors to the sector. 12
Licensing Procedure in Turkish Electricity Sector; General Framework and Current Status İskender Basat SAHİN Energy Expert - EMRA isahin@epdk.org.tr THANK YOU...