The European Green Deal presented on December 11, 2019. The European Green Deal is a strategic road map aiming to regulate the commitments of the European Union regarding the struggle against climate change. The European Union's aim is to become a carbon-neutral continent by 2050. Therefore, "Carbon Border Adjustment Mechanism" is on the agenda of the world. With this respect, in some sectors, it is foreseen that the import price will be determined by considering the carbon content of the goods to be imported. Although the application procedures and principles regarding the price determination processes have not been explained yet, it is considered that the products imported by the European Union may be subject to taxation in line with "carbon emissions" in the upcoming period. At this point, it becomes important to document that the electricity consumption is supplied from renewable energy sources. In Turkey, the necessary infrastructural preparations are made in terms of certification and legislative changes. Also, new legislation has been implementing.1
Accordingly, the Regulation on Renewable Energy Resource Guarantee Certificates in the Electricity Market ("Regulation")2 and the Amendment to the Regulation on the Certification and Support of Renewable Energy Resources ("Amendment Regulation")3 have been published in the Official Gazette no. 31304 dated November 14, 2020.
Within the scope of the aforementioned regulations, it is aimed to establish a system for the Renewable Energy Resource Guarantee ("YEK-G") Certificate which proves that the energy supplied by consumers is produced by renewable energy sources.
According to the Amendment Regulation, YEK-G Certificate refers to the electronic document. Each YEK-G Certificate is corresponding to 1 MWh of electricity generation that provides evidence that a certain amount or proportion of the electrical energy supplied to the consumer is produced from renewable energy sources.
In the system in which the YEK-G Certificate will be included, 1 YEK-G Certificate will be issued by the Energy Markets Operation Company ("EPIAS")4, which is the market operator, for the production of electricity from renewable sources for each 1 MWh production. The source of electricity, the age of the power plant, whether the plant is included in any support mechanism, the installed power of the plant and the period during which electricity is generated are all described in each YEK-G Certificate.
According to the Regulation that will enter into force on June 01, 2021, the YEK-G certificate will be issued by taking into account the documentable amount of production produced in licensed generation facilities based on renewable energy resources and upon request by the relevant generation license holder legal entities. The YEK-G certificate will be valid for 12 months from the ending date of the production period of electrical energy produced from renewable energy sources.
YEK-G system user is defined as legal entities having production and supply licenses. These entities must sign the YEK-G system participation agreement with the market operator and complete the registration procedures specified in Article 9 of Regulation. In addition, legal entities using the YEK-G system that requires operating in the organized YEK-G market must also sign an organized YEK-G market participation agreement with EPIAS. Within the scope of the relevant regulations, it has been stated that the producers as part of the Unlicensed Electricity Generation Regulation in the Electricity Market cannot be users of the YEK-G system.
In addition, with the above-mentioned regulations, it was stated that generation facility registration in the YEK-G system will not be carried out for a generation facility that has active registration in other certificate markets that aim to provide information on the quality of energy other than the YEK-G system in the same calendar year. At the same time, multi-source electricity generation license holders will be able to participate in the YEK-G system and the organized YEK-G market if all of the energy resources used in the facility are renewable.
Within the context of the Regulation, the Organized YEK-G market, where YEK-G Documents can be traded, is also described. Organized YEK-G market refers to the market organized and operated by market operator EPIAS, where the YEK-G certificate is exchanged among market participants. In the organized YEK-G market, matches will be carried out by continuous trading method, where bids can be matched immediately after they are included in the offer book and trade can take place, and contracts to be opened in the continuous trading method will be traded during the session. Sessions, session periods, contracts to be traded, opening and closing times of contracts, bidding times for contracts and other market-related processes will be regulated in the procedures and principles related to the operation of the YEK-G System and the Organized YEK-G Market. In addition, the types of bids to be submitted to the Organized YEK-G Market, the mandatory aspects of the bids submitted to the contracts, the structure of the bids and all other necessary information will be determined by the procedures and principles and notified to the market participants through the Market Management System by EPIAS.
In accordance with the "Provisional Article 1" of the Regulation; YEK-G documents to be redeemed due to the consumption of the consumers benefiting from the green tariff from August 01, 2020 until the date when the organized YEK-G market will be operational, collectively at the latest one month following the commissioning of the YEK-G system by the assigned supplier companies in the relevant period. The aforementioned YEK-G documents will be exported by EPIAS from production plants based on renewable energy sources owned by the Electricity Generation Company ("EUAS") and transferred free of charge to the account of the relevant supply company.
In addition to the issues mentioned above, according to the draft on YEK-G System and Organized YEK-G Market Operation Procedures and Principles submitted to the public opinion by the Energy Market Regulatory Authority (EPDK), the YEK-G certificate, the YEK-G system in general and the activities related to the Organized YEK-G Market will find a complete regulatory area. In terms of the aforementioned draft, public opinions and evaluations had been collected until February 25, 2021. In this direction, the procedures and principles regarding the process will be shaped by finalizing and publishing the relevant draft.
Climate change is influencing every country on every continent5. Therefore, it is predicted that the demand for electricity produced from renewable energy sources will boost in the upcoming period. At this point, it is considered that the YEK-G system will have positive effect to Turkey's renewable energy investments.
1 In the meeting held by Grand National Assembly of Turkey Plan and Budget Commission on November 11, 2020, the Minister of Energy And Natural Resources expressed the purpose of the system as follows: "In addition to have a positive impact on the use of renewable energy with the YEK-G system, it aims to be prepared for the "Carbon Border Taxes" regulation that will be brought to the agenda in the future by the countries we export products." Please see: https://www.tbmm.gov.tr/develop/owa/komisyon_tutanaklari.goruntule?pTutanakId=2598
4 It should be noted that the working procedures and principles of Energy Markets Operation Company, which will be included as a "market operator" in the relevant processes, have also been harmonized with the YEK-G process. Accordingly, the Regulation on The Amendment of the Regulation on The Organization Structure and Working Principles of the Energy Markets Business Joint Stock Company was published in the Official Gazette no. 31413 dated March 4, 2021.
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