Energy Exchange flourished in Europe from the late 1990's with the liberalization legislative packages influencing the way, in which energy is traded. Today they are the vital part of Europe energy markets, and still will be in the EU Internal Energy Market. Similarly, with the development of Turkish energy market and its liberalization via privatizations after 2000's, Turkey has taken important steps to regulate its own energy market operations. Market operation activities are defined under the Electricity Markets Law ("EML") as (i) the operation of organized electricity wholesale markets, (ii) financial settlement transactions of the activities carried out in these markets and (iii) other financial transactions with respect to the said activities.
Energy Markets Operation A.S. was Established on March 18, 2015.
EML provided that a joint stock corporation namely "Energy Markets Operation A.S." ("EPIAS") would be incorporated within six months following the date of coming into force of EML. EML became effective on March 30, 2013, but EPIAS could be incorporated, with a quite extended delay, only on March 18, 2015.
According to EML, EPIAS must, within a period of six months following the date of its incorporation, commence market operating activities by obtaining the required market operation license from Energy Market Regulatory Authority ("EMRA"). EPIAS, under such license, will carry out the activities of operating the organized wholesale electricity markets other than markets operated by Istanbul Stock Exchange Corporation and Turkish Electricity Transmission A.S. EMRA provided EPIAS with such license for 49 years being effective from September 1, 2015.
Which Legislation Should be Taken into Account?
In parallel with the increasing trend in the electricity market in Turkey, new legislations have been introduced in the recent years. Some of them are directly related to the energy market operation activities and should never be ruled out by the players who carry out energy market operation activities in Turkey. Here are the most important ones:
- Electricity Market Balancing and Settlement Regulation sets forth the principles of balancing and realizing the settlement of supply and demand of active electricity energy.
- Regulation on the Organizational Structure and Working Principles of EPIAS aims to set forth the principles regarding the (i) accomplishment of the activities of EPIAS, (ii) determination of duties and responsibilities of the organizational structure of EPIAS and (iii) conducting the coordination between departments of EPIAS.
- Electricity Market License Regulation covers (i) the requirements of licenses and pre-licenses that must be obtained to carry out electricity market activities and fundamental provisions thereof, (ii) transactions regarding the license issuance by the EMRA and (iii) rights and responsibilities of license holders.
- Regulation on Electricity Network determines principles on (i) planning the electricity transmission network on a cost efficient and reliable basis and management of the same and (ii) conditions of the "credibility of supply" and the quality to be applied to provide consumers with qualified and sufficient electricity.
- Regulation on Electricity Market Tariffs sets forth the (i) criteria on preparation of the tariff proposals regarding transmission, wholesale, distribution, connection, retailing, market operation and last source tariffs and (ii) principles on regulating income and/or ceiling prices of relevant license holders.
What Do Energy Sector Players Expect from Energy Exchange?
Incorporation of EPIAS and establishment of Energy Exchange have been met with enthusiasm by energy sector players. The general understanding is that active operation of EPIAS is essential for Turkey who aims to be the energy center of Europe and Asia. Furthermore, players in the Turkish energy sector believe that Energy Exchange will ensure their future energy investments since they will be able to sell the electricity in advance through Energy Exchange before producing the same.
Transparency Is Again an Important Issue!
Besides the promises of Energy Exchange, "Transparency" is an important issue for energy sector players and Energy Exchange to operate efficiently. Sector players wish to know the amount of available electricity and the price of it. On November 11, 2015; EPIAS organized the "First Transparency Workshop" to compose data and analysis platform. Conditions in relation to data and information sharing between parties in order for the electricity market to operate efficiently were discussed in the Workshop with the participation of representatives of both public and private institutions.
The First Step to the Membership to the Association of European Energy Exchange Has Been Taken.
In order to strengthen the connection between Europe in the energy sector and secure Turkey's position, EPIAS applied to the Association of European Energy Exchange ("EUROPEX") on November 26, 2015 to be a member. It has been announced by EPIAS that the membership of EPIAS will be resolved on the general assembly meeting of EUROPEX to be held in May 2016.
Although there had been a quite extended delay on incorporation of EPIAS, introduction of relevant foregoing legislations, EUROPEX membership application and public and private institutions' involvement are indeed very promising for market operation activities in Turkey. It seems that with the enthusiasm and support of the energy sector in Turkey, activities of EPIAS will gain momentum in 2016.
 Electricity Market Law; dated March 14, 2013 and numbered 6446 and published in the Official Gazette dated March 30, 2013 and numbered 28603.
 A.S. is the abbreviation for "Anonim Sirket"; which stands for the Joint Stock Corporation in Turkish language.
 Electricity Market Balancing and Settlement Regulation; published in the Official Gazette dated April 14, 2009 and numbered 27200.
 Regulation on the Organizational Structure and Working Principles of EPIAS; published in the Official Gazette dated April 1, 2015 and numbered 29313.
 Electricity Market License Regulation; published in the Official Gazette dated November 2, 2013 and numbered 28809.
 Regulation on Electricity Network; published in the Official Gazette dated May 28, 2014 and numbered 29013 (Repeated).
 Regulation on Electricity Market Tariffs; published in the Official Gazette dated August 22, 2015 and numbered 29453.
 http://www.europex.org/index/pages/id_page-51/lang-en/ , February 8, 2016.
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.