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Legal Alerts

17/05/2021

Electricity Market – Regulation on Storage Facilities Comes into Effect

Legal Alerts
Energy, Mining & Infrastructure

The Electricity Market Storage Activities Regulation, which was issued by the Energy Market Regulatory Authority (“EMRA”), was published in the Official Gazette on 9 May 2021 and became effective on the same date.

New Developments

In addition to the Electricity Market Storage Activities Regulation, certain other regulations were issued and became effective on 9 May 2021, these included following:

  • Regulation Amending the Electricity Market Licensing Regulation
  • Regulation Amending the Regulation on Certification and Support of the Renewable Energy Resources
  • Regulation Amending Electricity Market Connection and System Usage Regulation
  • Regulation Amending the Electricity Market Balancing and Settlement Regulation
  • Regulation Amending Electricity Market Grid Regulation

Regulations Concerning the Storage Activities

Important regulations on storage activities in the electricity market are summarized below.

Storage facility establishment:

Storage facilities must be within the area stated under the license/preliminary license, and should not change electrical and/or mechanical capacity, existing connection type, connection point and voltage level of the generation facility. Information regarding the storage facility must be stated under the licenses. No additional capital requirement will be applied for storage facilities.

Storage facilities integrated with generation facilities:

  • The installed capacity of storage facilities cannot exceed the installed capacity stated under licenses.
  • The commissioning of storage facilities can occur only after the commissioning of the relevant generation facilities.
  • The energy supply of generation facilities cannot exceed the maximum generation capability value based on the commissioned installed capacity within a settlement period.
  • Storage facilities integrated with generation facilities that benefit from any purchase guarantee incentive, or possess the required qualifications of being a balancing unit, are registered as a separate settlement aggregation unit.
  • Incentives and purchase guarantees will not be applicable to electricity withdrawn from the system and then supplied back to the system by storage facilities. Settlement withdraw/supply of storage facilities integrated with generation facilities that benefit from the purchase guarantee support mechanism are not taken into account in terms of the purchase guarantee mechanism.

Storage facilities integrated with consumption facilities:

  • The installed capacity of storage facilities cannot exceed the capacity of consumption facilities stated under the relevant connection agreement.
  • Storage facilities integrated with consumption facilities can be established within the scope of Article 5.1(ç) of the License-Exempt Electricity Generation Regulation published in the Official Gazette dated 12 May 2019 (facilities consuming all of the energy they generate without giving any energy to the system and having generation and consumption at the same measurement point).
  • The electricity supply of storage facilities is not considered within the scope of the settlement supply volume.

Autonomous Storage Facilities:

  • Only supply license holders can establish autonomous storage facilities and their installed capacity must be at least 2 MW.
  • It is possible to establish more than one storage facility under one supply license.
  • The electricity supply/withdrawal of these storage facilities is 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. On 27 January 2021, the EMRA amended the Electricity Market Auxiliary Services Regulation to include provisions regarding storage facilities.

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 be used in any activity other than distribution activities.

Organized industry zones:

Storage facilities to be established within organized industry zones by the relevant organized industry zone 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 and relevant connection facilities, except for storage facilities integrated with generation facilities.

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.

Connection and System Usage:

  • Integrated storage facilities are deemed a unit of the relevant generation facility or a part of the relevant consumption facility and connected to the system at the same measurement point as the relevant generation/consumption facility.
  • Owners of autonomous electricity storage facilities are responsible for connection investments and permitting fees.

Balancing and Settlement:

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.

Applications:

Applications will start one month after following the announcement of technical criteria by TEİAŞ (national transmission system operator) which should be completed until 1 September 2021.

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.

Conclusion

Storage facilities now have the required legal ground and applications are expected to start in October 2021 at the latest.