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Electricity Market Storage Activities: Revised Regulation Draft Available for Review and Opinions

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Energy, Mining & Infrastructure

New Developments

The Energy Market Regulatory Authority (“EMRA“) published several draft amendments on its website regarding electricity storage, including a revised draft of the Regulation Concerning Electricity Storage Activities (“Draft Legislation“) for public opinion. Opinions should be submitted to the EMRA Electricity Market Department until 9 February 2021.

What Are the Changes in the Draft Legislation?

An amendment made to the Electricity Market Law No. 6446 in 2018 introduced electricity storage activities into the legislation as one of the license-exempt market activities. The EMRA prepared a draft regulation regarding the principles and procedures for storage activities and received public opinions on the draft in February 2019. The EMRA recently published the Draft Legislation, which claims to reflect the previously received public opinions. The important changes in the Draft Legislation are summarized below.

1. Draft Electricity Market Storage Activities Regulation

Storage facilities integrated with generation facilities: Storage facilities can be integrated with generation facilities subject to the following rules:

  • The installed capacity of storage facilities cannot exceed (i) the installed capacity stated under generation licenses; and (ii) the installed capacity of commissioned facilities for generation facilities benefiting from the renewable energy support mechanism (“YEKDEM“) or any other purchase guarantee incentive.
  • The commissioning of storage facilities can occur only after the commissioning of the relevant generation facilities.
  • Incentives and purchase guarantees applicable for generation facilities are inapplicable to storage facilities executing electricity supply/withdrawal.
  • Storage facilities integrated with generation facilities that benefit from YEKDEM or any other purchase guarantee incentive, or possess the required qualifications of being a balancing unit, are registered as a separate settlement aggregation unit.
  • The energy supply of generation facilities cannot exceed the maximum generation value based on the commissioned installed capacity within a settlement period.

Storage facilities integrated with consumption facilities: Subject to the following rules, storage facilities can be integrated with (i) consumption facilities; or (ii) license-exempt generation facilities granted with a call letter issued after 12 May 2019 and connected to the system at the same measurement point with the relevant consumption facility:

  • The installed capacity of storage facilities cannot exceed the capacity of consumption facilities stated under the relevant connection agreement.
  • The electricity supply of storage facilities integrated with consumption facilities are not considered within the scope of the settlement withdraw volume, except for storage facilities integrated with license exempt generation facilities possessing generation and consumption units connected to the system at the same connection point.

Autonomous Storage Facilities: Autonomous storage facilities can be established only by supply license holders and their installed capacity must be at least 5 MW. These storage facilities’ electricity supply/withdrawal are taken into consideration within the scope of the settlement supply/withdrawal values. These facilities can also participate in auxiliary services and balancing power markets if they satisfy the relevant requirements. The EMRA amended the Electricity Market Auxiliary Services Regulation to include provisions regarding storage facilities on 27 January 2021.

Storage facilities of distribution companies: Distribution companies can establish storage facilities within their investment plans subject to the EMRA’s approval, if they can prove economic efficiency as supported by an economic cost-benefit analysis. These storage facilities cannot perform wholesale and retail sale activities or participate in balancing power markets in which the other market participants can participate.

Organized industry zones: Storage facilities to be established within organized industry zones are accepted as storage facilities integrated with consumption facilities.

Land usage: The EMRA will not take any action regarding land ownerships and usage rights for storage facilities, except for storage facilities to be established by distribution companies.

Storage facilities not subject to the regulation: Hydroelectric facilities with pumped storage and battery backup units used in electricity power outages are out of the regulation’s scope.

2. Draft Amendments to the Electricity Market Licensing Regulation

Affirmative opinion of the grid operator: Storage facilities integrated with generation or consumption facilities or autonomous storage facilities are subject to the affirmative opinion of the relevant grid operator for system connection and usage.

Generation facilities: The request for the establishment of storage facilities integrated with generation facilities can be submitted to the EMRA at any stage (preliminary license application, preliminary license or license). For requests made at the preliminary license or license stages, storage facilities integrated with generation facilities (i) must be located within the site of the generation facility as stated under the preliminary license or license; and (ii) should not change the installed capacity, connection type, connection point and voltage level of the generation facility.

Completion of storage facility in due time: Provisions that allow time extension for completion of generation facilities due to force majeure or other events as accepted by EMRA are applicable to storage facilities.

3. Draft Amendments to the Electricity Market License-Exempt Generation Regulation

Establishing a storage facility with an installed capacity equal to at least 20% of the total installed capacity of the generation facility is compulsory for license-exempt renewable energy based generation facilities established based on the installed capacity stated in their connection agreements and connected to the system on transmission system.

4. Draft Amendments to the Electricity Market Connection and System Usage Regulation

Integrated storage facilities are deemed a unit of the relevant generation facility or a part of the relevant consumption facility.

Autonomous electricity storage facility owners are responsible for the construction, maintenance, repair and renewal of connection facilities required for connection of the storage facility to the system, as well as demolishing the same elements when these are no longer required.

5. Draft Amendments to the Electricity Market Balancing and Settlement Regulation

Each storage facility and unit that can (i) independently comply with up-regulation and down-regulation instructions; and (ii) be independently measured based on settlement periods, will be accepted as a balancing unit, provided that the relevant market participant makes a request in that regard and the relevant system operator accepts the request.

6. Draft Amendments to the Grid Regulation

The transmission system operator (TEİAŞ) will determine the technical criteria applicable for storage facilities concerning grid connection and auxiliary services until 1 June 2021, after receiving the opinions of the distribution companies.

7. Draft Amendments to the Principles and Procedures Concerning Automatic Meter Reading Systems and Meter Value Determinations

Meters measuring energy supply/withdrawal by (i) autonomous storage facilities; and (ii) storage facilities integrated with generation facilities and registered as a settlement aggregation unit are subject to the automatic meter reading system.

Conclusion

The Draft Legislation aims to provide implementation specifics regarding electricity storage activities. The deadline for opinion submissions to the EMRA is 9 February 2021.

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