Regulation on Electricity Market Capacity Mechanism

In recent years, the owners of natural gas-fired electricity generation facilities have been undergoing financial difficulties due to ever-increasing natural gas prices and the relatively low sales prices in the electricity market. Some of these facilities ceased operations, and the licenses of some others were terminated and their equipment and machinery were sold abroad.

The Ministry of Energy and Natural Resources and the Energy Market Regulatory Authority (“EMRA“) were working to find a solution to address this problem and resolved on making capacity payments to provide financial support to these power plants. The policy behind this measure for preservation of these power plants originates from their significance in terms of energy supply security. In this respect, Article 20 of the Electricity Market Code (“Code“) numbered 6446 was amended with the omnibus bill numbered 6475, published in the Official Gazette dated 7 September 2016, and it was stated that the principles and procedures concerning the establishment of capacity mechanisms will be regulated by EMRA, and the payments to be made by Türkiye Elektrik İletim A.Ş. (“TEIAS“) within this scope will be taken into account during the calculation of the transmission tariff.

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