Electricity grids are transitioning from a centralized production and unidirectional energy flow model to a new structure based on flexibility, digitalization, and distributed generation. Globally and in Türkiye, the increase in electricity production from renewable energy sources, which are typically small-scale and decentralized, has necessitated the transformation of traditional electricity grid models. In this context, with the widespread adoption of renewable and distributed energy sources, a flexible, efficient, and balanced grid operation has become a priority, making the concept of aggregation increasingly essential. The need to enhance consumer participation and develop supply-demand optimization mechanisms has further underscored the importance of aggregation in electricity markets.
Emerging as an innovation in the sector, aggregation is an activity that requires flexibility and interaction not only on the production side but also on the consumption side, aiming to optimize the integration of energy resources into the grid and to enable effective consumer participation and demand-side flexibility. Aggregators can generally be categorized as third-party organizations that consolidate distribution, generation, consumption and storage resources under a single structure and enable them to be utilized in the grid as if they were a single energy source.
The successful implementation of aggregation activities requires the consideration of multi-dimensional factors such as forecasting, past consumption behaviours, and grid requirements. Furthermore, the establishment of control and monitoring systems is deemed necessary.
In Türkiye, legal grounds for aggregation were established with the addition of Article 12/A to the Electricity Market Law on December 22, 2022. This amendment granted the Energy Market Regulatory Authority (EPDK) the authority to issue secondary regulations to support aggregation activities.
Key Thresholds for Aggregators
- Aggregators may include licensed generation facilities with a maximum total installed capacity of 100 MW.
- The upper limit for unlicensed generation portfolios is set at 500 MW.
- Aggregators may consolidate generation portfolios up to a maximum of 2000 MW.
- Authorized to supply electricity exclusively to its own portfolio.
- Both unlicensed and licensed facilities must obtain approval from TEİAŞ for designation as a balancing unit.
- Consumption facilities participate in demand-side participation mechanism and Balancing Power Market (DGP) activities through TEİAŞ approval.
Areas of Activity for Aggregators
- Licensed generation facilities: Ancillary services, Balancing Power Market (DGP)
- Unlicensed generation facilities: DGP
- Consumption facilities: Demand-side participation, DGP
- Storage facilities: Ancillary services, DGP, arbitrage
- Aggregator Portfolio Management: Execution of the aforementioned activities, energy sales, energy supply, and balancing activities
Detailed Areas of Activity
The potential activities of an aggregator include:
- Selling the energy of licensed/unlicensed generation facilities in its portfolio
- Establishing and operating independent storage facilities
- Using storage facilities of production plants in its portfolio
- Aggregating unlicensed production facilities into its portfolio
- Supplying energy to consumption facilities in its portfolio
- Aggregating consumption facilities in its portfolio
- Utilizing them for demand-side participation
- Utilizing them within the Balancing Power Market (DGP)
- Using generation facilities in its portfolio for ancillary services and participation in the DGP
- Managing energy imbalances within its portfolio
Procedures to Be Carried Out During the Activity
- Licensing: Obtaining an Aggregator License
- Portfolio Formation
- EPİAŞ Registration: Registering in the Power Futures Market (VEP), and participation in GÖP (Day-Ahead Market), GİP (Intraday Market); completing settlement processes, establishing settlement and data-sharing units, registering balancing units, and signing market participation agreements
- TEİAŞ Compliance: Ensuring technical eligibility of the group established on a balancing zone basis for participation in the DGP and/or ancillary services; DGP Offer/Bid facilities (Up Regulation-Down Regulation); ensuring conformity with ancillary services agreements
- Obligations: For licensed, unlicensed generation, consumption and independent storage facilities, submitting the “Final Day-Ahead Generation Schedule” (KGÜP) and the “Available Capacity” (EAK) to TEİAŞ; fulfilling other obligations under applicable legislation concerning market transactions
- Management: Establishing aggregator control systems; setting up infrastructure for communication systems and installing controller meters
- Commencing Activity
Scope of the Aggregation Service Agreement
According to Article 4/1(j) of The Regulation on Aggregation Activities in the Electricity Market, an Aggregation Service Agreement is executed. This agreement is signed between aggregators and:
- Legal entities holding a license for generation facilities,
- Eligible consumers with free consumption rights,
- Legal entities owning independent storage facilities, and
- Real and legal persons operating under the Regulation on Unlicensed Electricity Generation in the Electricity Market.
Aggregators are authorized to act on behalf of these parties to sell their electricity to the grid or market and to participate in ancillary services. The agreement is a commercial arrangement not subject to Board approval. It defines profit-sharing mechanisms and specifies whether aggregators, producers, or consumers are responsible for fulfilling portfolio obligations. It also governs portfolio exits, removals, and other essential rights and obligations.
Comparison of Balance Responsible Group (DSG) and Aggregators
DSG and aggregator structures have different economic motivations in the electricity market. DSGs are designed to avoid financial losses by mitigating imbalances, while aggregators play a commercial role in various areas, including demand-side participation and balancing markets.
A DSG's primary function is to forecast the production or consumption of its users and manage deviations. These deviations are offset through netting of positive and negative imbalances aiming to create synergy (the intra-group balancing of forecast inaccuracies across the affiliated facilities) within the group. It presents itself as a mechanism aimed at reducing imbalance costs and create revenue through this advantage. However, it appears that due to physical grid constraints, the imbalance mitigation methods implemented by DSGs have not yielded the anticipated benefits for the grid.
At this stage, it is becoming evident that aggregator structures are being considered as potential contributors to physical energy balance, particularly through approaches centred on balancing zones and energy management.
Currently, a threshold has been imposed within DSGs by restricting synergy to 10%, making any imbalance beyond this level the direct responsibility of the respective users. Aggregators, however, are not subject to such limits, which gives them a competitive advantage.
The Energy Market Regulatory Authority (EPDK) is expected to evaluate removing the DSG structure entirely by 2026, shifting toward a fully aggregator-based model. Regulatory amendments are being planned to align DSG operations with aggregator practices. The 2000 MW portfolio limit for aggregators is designed to prevent market monopolization and preserve competitive balance. EPDK's stance indicates that aggregators are seen as a better solution to grid requirements compared to DSGs.
Exit Process for Unlicensed Plants Reaching 10 Years of Operation
By 2034, approximately 14,839 MW of installed capacity (14,098 MW solar) is expected to complete its 10-year unlicensed operational period. For producers unfamiliar with market dynamics and lacking specialized operational staff, aggregation is anticipated to provide a valuable transition mechanism. Yet, it is likely that not all producers in this position will become part of aggregator portfolios; some may instead opt to obtain a license and continue their operations independently.
However, when support tariffs exceed the Market Clearing Price (PTF), the level of profitability seen in previous periods will no longer be achievable, as the price difference must be paid into the YEKDEM mechanism. Unlicensed plants completing their 10-year term may still receive payments through their Obligated Supplier (GTŞ). Payment cycles may occur on a monthly or bi-monthly basis, but hourly, daily, and weekly settlements through aggregators offer the potential for more frequent and efficient cash flow. This makes aggregation a promising opportunity for these plants.
Process of Completing YEKDEM for Licensed Power Plants
By 2032, nearly 17 GW of licensed power plants are expected to exit the purchase guarantee mechanism, leaving behind the unlicensed ones. These licensed generation facilities, currently active in the YEKDEM market, are expected to prefer joining an aggregator portfolio and conducting market operations through that structure rather than individually managing imbalances and following market procedures.
Requirements for Aggregator License
- Capital Requirement: 50 million TL
- License Application Fee: 10 million TL
- Articles of Association and Other Documents: Required items in the articles of association, no prohibitions or control declarations, documents regarding the ownership structure
- Additional Capital and Guarantee Requirement for Central Electricity Storage Facilities (MEDT) under aggregator license:
- Additional capital equal to 20% of the investment amount
- A guarantee is requested at certain ratios of the investment cost, based on the installed capacity
Conclusion
The structural transformation in Türkiye's electricity market, along with the widespread adoption of renewable energy sources and the proliferation of distributed generation facilities, has significantly increased the need for flexible and integrated market solutions. This transformation has necessitated the creation of new market structures to enable more active participation from both producers and consumers. Aggregation has emerged as a strategic tool to meet these needs, combining diverse generation and consumption components under a single portfolio to support grid balancing and flexibility.
Aggregators, by professionally managing generation and consumption resources and assuming an active role in ancillary services markets, play a critical role in ensuring transparency and efficiency in market operations. Moreover, in response to the limitations of the current DSG (Balance Responsible Group) model, aggregation is seen as a more effective and functional solution—signalling a sector-wide shift toward this new model.
Incorporating unlicensed generation facilities, decommissioned YEKDEM plants, and storage units into aggregator portfolios contributes to supply-demand balance, enhances participation in balancing markets, and unlocks new commercial opportunities. With Article 12/A of the Electricity Market Law establishing a legal foundation, and subsequent secondary regulations issued by EMRA (EPDK), implementation is now moving into a more structured phase.
In conclusion, aggregation is expected to gain greater importance as a model that both enhances system security and offers new revenue mechanisms for market participants. From this perspective, we believe strengthening the systemic integration of aggregators is a critical and strategic step for the energy market.
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