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Legal Alerts
09/06/2022

6-month Time Extension in Renewable Energy Support Mechanism

Legal Alerts
Covid-19
Energy, Mining & Infrastructure

Recent Developments

In accordance with the Presidential Decree No. 2949 dated September 17, 2020 (“Presidential Decree“), RER-certified production license holders initiating their operations between January 1, 2021 and June 30, 2021 under the Renewable Energy Resources (“RER“) support mechanism will be able to benefit from the incentives provided under Articles 6 and 6/B of the Law on the Use of Renewable Energy Resources for the Purpose of Generating Electrical Energy (“Law“), until December 31, 2030. The Presidential Decree was published in the Official Gazette No. 31248 dated September 18, 2020, and entered into force on the same day.

What’s New?

Prior to the amendment, the RER support mechanism incentives for RER-certified production license holders were valid for those that initiated their operations by December 31, 2020.

In accordance with the Presidential Decree:

  1. The prices in Schedule I in the Law will be applied until December 31, 2030 for RER certified production license holders that initiate their operations under the RER support mechanism between January 1, 2021 and June 30, 2021.
  2. If the mechanical and/or electro-mechanical parts used in the RER-certified production facilities that initiate their operations between January 1, 2021 and June 30, 2021 are manufactured domestically, the prices in Schedule II in the Law will be applied to the prices in Schedule I, for additional five years from the date of operation of the production facility for the electrical energy produced and provided to the transmission or to distribution system.

Conclusion

The future of the RER support mechanism, particularly whether the deadline would be extended or not,  was widely debated in the energy market. The Presidential Decree provides a short-term answer to the debate and flexibility to production license holder companies facing operational delays due to COVID-19. The Presidential Decree ensures the continuity of energy investments and the minimization of delays that emerged during the pandemic by extending the RER support mechanism for facilities unable to initiate their operations by December 31, 2020.