Turkey: Draft Regulation On Energy Storage Activities

Last Updated: 22 April 2019
Article by Aykut Bakırcı, Zekican Samlı, Duru İyem and Can Yılmaz

Introduction

The Energy Market Regulatory Authority ("EMRA") has published a draft of the "Regulation on Energy Storage Activities" (the "Draft Regulation") for public consultation. The Draft Regulation aims to increase energy efficiency and supply by regulating energy storage activities.

Types of energy storage facilities

The Draft Regulation describes energy storage activities as "the loading of electricity to energy storage facilities and supply of stored electricity to the grid" and energy storage facilities as "facilities which can store electricity from the grid and supply such electricity to the grid ".

The Draft Regulation separates energy storage facilities into two groups:

  • integrated energy storage facilities: facilities connected to the same measurement point, feeder or bar with an electricity generation or consumption facility; and
  • separate energy storage facilities: facilities directly connected to the grid without any connection to a generation or consumption facility.

Based on this classification, the Draft Regulation groups permitted energy storage activities as follows:

  1. an energy storage facility integrated with a licensed electricity generation facility;
  2. an energy storage facility integrated with a consumption point;
  3. a separate energy storage facility; or
  4. an integrated energy storage facility integrated constructed and operated by a distribution network operator.

Energy storage facilities integrated with a licensed electricity generation facility

According to the Draft Regulation, generation licensees will be able to construct an integrated energy storage facility up to a maximum installed power capacity of 20% of the installed power capacity of its integrated generation facility. An increased ratio of 100% applies for hydroelectric power plants with pumping storage (pompaj depolamalı hidroelektrik tesisi).

These storage facilities will be able to operate in the wholesale electricity market provided that their integrated generation facilities have commenced commercial operations.

The Draft Regulation does not permit m energy storage facilities integrated with generation facilities to benefit from incentives or feed-in-tariffs. Therefore, stored electricity will only be available for sale on market prices (either agreed bilateral PPA prices or the system price applicable at the relevant time).

Energy storage facilities integrated with consumption facilities

The Draft Regulation allows the construction of energy storage facilities integrated with consumption facilities which have an installed power capacity of at least 50 kW. In this case, the installed power capacity of these energy storage facility cannot exceed the installed power capacity of its integrated consumption unit.

A key characteristic of this type of storage facility is that it can only be constructed to support its integrated consumption facility. Accordingly, the Draft Regulation does not permit trading of any excess electricity and any such excess delivered to the grid will be on a "gratis" basis, without consideration.

Separate energy storage facilities

According to the Draft Regulation, energy storage activities can also be carried out with a separate energy storage facility provided that such facility has an installed power capacity of at least 10 MW and the relevant network operator approves the connection of such facility.

The Draft Regulation proposes a classification for these type of facilities and states that any electricity delivered to the grid from will be sold as follows:

  1. if the installed power capacity of the facility is less than 15 MW or if the owner of the facility does not have an electricity wholesale licence, in the ancillary services market; or
  2. if the installed power capacity of the facility is more than 15 MW and if the owner of the facility has an electricity wholesale licence, in the wholesale market.

Energy storage facilities established by network operators

The Draft Regulation allows electricity network operators to construct and operate energy storage facilities.

However, the installed power of these facilities cannot exceed:

  1. 50 MW for each transformation station in case it is operated by the transmission network operator (i.e. TEİAŞ); and
  2. 10 MW for each distribution centre in case it is operated by the distribution network operators.

The Draft Regulation prohibits transmission network operator and the distribution network operators to trade the electricity stored in this type of facilities.

Technical and commercial provisions

According to the Draft Regulation, the technical criteria concerning the connection of energy storage facilities to the grid, their activities in the ancillary services market and their supervision by a SCADA system will be prepared and announced by TEİAŞ after consultation with network operators. Furthermore, the terms and conditions for the approval and acceptance procedures of energy storage facilities will be determined by the Ministry of Energy and Natural Resources separately.

Conclusion

Energy storage is arguably the new frontier in the energy market, with the constant decrease in storage costs for both households and industrial facilities, thanks to the introduction of new technologies.

The Draft Regulation will play a key role in shaping the Turkish energy storage market which is keenly looking to catch up with global trends.

For countries like Turkey that have relatively limited base-load resources, efficient use of renewables and other "indigenous" sources takes on particular importance.  Energy storage technologies offer the potential to increase energy efficiency and decrease grid imbalances and, perhaps most importantly, enable renewables to supplement foreign-sourced base load dependency which has been a major deficit driver for Turkey.  Most importantly, the Draft Regulation will offer power plants based on renewable energy will have a new tool in managing output timing and market price exposures after the expiry of the guaranteed feed-in-tariff period.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Zekican Samlı
Duru İyem
 
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