Turkish electricity market is rapidly transforming a competitive
open market by consistent privatization and liberalization policies
of Turkish government. In line with these regulations, a
manipulation risk has been revealed which restricts advantages of
privatized market. Recent reforms have indicated to market players
a horizontal structure will dominate the energy markets while it
was completely vertical and state-controlled in the recent past.
Turkish government commenced this process with privatization of
electricity distribution and small sized generating companies. The
fact remains that mainstream of this strategy is increasing the
competition on wholesale and retail markets.
Main Reasons of Manipulation on Electricity Markets
There is no elasticity on electricity markets. Hence, a small
decrease in distribution of electricity may result with unexpected
The main drawback for electricity manufacturers is storage
difficulty which makes a well balanced electricity market
In case of there is an electricity transmission issue occurs,
manufacturers may gain market power as price determinants.
Electricity producers are likely to operate with maximum
capacity regarding their marginal cost. Thereby, they are not able
to adapt themselves in terms of price increases.
As a consequence of these matters above, Turkish electricity
spot market needs an authorised body for well organized market
mechanism and dealing with manipulation possibility.
Worldwide War Against to Electricity Market Manipulation
In US, Security Exchange Commission ("SEC") and
Commodity Futures Trading Commission ("CFTC") are
responsible for preclusion of manipulative transactions. However,
these institutions are only restricted with capital markets so
physical electricity market trading is not able to be regulated
under these authorities' implementations. As a result,
manipulation is subject to antitrust law in US. On the other hand,
there is no need for market power to apply manipulation. In this
regard, Federal Energy Regulatory Commission's authorizations
have been extended.
European Union solved this issue in the way that US applied.
Energy markets manipulations are defined under Market Abuse
Directive ("MAD") but this does not comprise
physical electricity trading. With respect to this lacunae in law,
Regulation on Energy Market Integrity and Transparency (REMIT) has
been enacted and The Agency of Cooperation of Energy Regulators
("ACER") has been authorised for data collection and
Regulatory Framework of Fraud-Based Manipulation
At a glance, Fraud-Based Manipulation refers financial and
commodity markets distortions. In accordance with article 237
Turkish Criminal Law Code 5237, any person who applies
fraud-based manipulation in such a way to decrease or increase of
prices of goods is punished with imprisonment from three months to
two years together with judicial fine. Additionally, article
107 of Capital Markets Law Code 6362 the persons who attempt
any misleading transaction for changing prices, demand or supply of
capital markets' instruments are given prison sentence from two
years to five years along with punitive fine.
In the scope of Electricity Market, Recent enacted
Electricity Market Law Code 6446, any definition does not
take part about fraud-based manipulation which poses risk on this
volatile market. As one might expect, after establishment of energy
market exchange ("EPİAŞ") in Turkey, debates
will arise regarding legislation of manipulation in electricity
market. A new secondary legislation will be highly needed market
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On 6 October 2016, the UK's Secretary of State for Communities and Local Government, Sajid Javid, overruled local councillors on appeal and approved Cuadrilla's plans to explore for shale gas in Lancashire.
On Friday, 7th October the General Assembly of the International Civil Aviation Organisation passed a resolution, resolving to implement the world's first global regime for combatting CO2 emissions from aircraft.
Turkey's energy regulator previously ruled (decision numbered 5709, dated 30 July 2015) that a total capacity of 2,000 MW would be reserved in the period up until 2020 for wind power pre-license applicants to connect to the grid.
The WTO dispute "India – Solar Cells" concerns the Jawaharlal Nehru National Solar Mission ("National Mission"), launched in India six years ago.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).