Turkish Renewable Energy Law (amendment 30.12.2010)

Technical / Turkish Renewable Energy Law (amendment 30.12.2010)

Turkish Renewable Energy Law (amendment 30.12.2010)

December 30 2010-Renewable Energy Resources (RER) Bill Passes from Parliamentary General Assembly

RER incentives will be 7.3 US$ cents for HEPP’s and WPP’s, 13.3 US$ cents for solar power and biomass, and 10.5 US$ cents for geothermal energy – These incentives will be applied for 10 years to license owners making production depending on RER, which are already put or will be put into operation between the dates of May 18, 2005 and December 31, 2015...

Renewable Energy Resources (RER) Bill which was prepared by the Ministry of Energy and Natural Resources (MENR) also by obtaining the opinions of related institutions, to encourage electricity generation depending on renewable energy resources, and which was on the agenda of the Parliamentary General Assembly since a while, is approved on December 29, 2010 upon being taken up in the General Assembly after the budget discussions ended in the Parliament.

In the Law, the prices that will be applied for production facilities depending on RER, are determined as “Dollar cents” instead of “Euro cents”. Accordingly, the incentive amounts determined in “RER support mechanism” for RER facilities are as follows:

- For Hydroelectric Power Plants (HEPP) : 7.3 US$ cents

- For Wind Power Plants (WPP) : 7.3 US$ cents

- For production facilities depending on solar power : 13.3 US$ cents

- For production facilities depending on biomass, including landfill gas (LFG) : 13.3 US$ cents

- For production facilities depending on geothermal energy : 10.5 US$ cents

These incentives will be applied for 10 years to production license owners subject to RER support mechanism, and for which are already put or will be put into operation between the dates of May 18, 2005, the date when RER Law is enacted, and December 31, 2015. Prices that will be applied to RER facilities which will be put into operation after December 31, 2015 will be determined by the Cabinet, without exceeding these prices.

Hybrid production facilities generating energy by using other energy resources which are not intensified solar power and renewable, will also be within the scope of this support mechanism. Market Financial Settlement Center(PMUM) will announce the RER total amount for each invoicing period and will determine the liabilities of suppliers that provide electrical energy to the consumers.

RER areas will be determined by Regulations

According to the Law, determining of resource areas regarding electrical energy, grading, and the procedures and merits on their usage will be arranged by Regulations, by obtaining the opinions of related offices and institutions. The determined RER areas will be communicated to related authorities by the Ministry of Energy and Natural Resources, to be recorded sua sponte to development plans.

Decrees on RER application process and electricity sale

Making applications for production facilities depending on RER, will be arranged by Regulations which will be issued by

Energy Market Regulatory Authority (EMRA) upon obtaining the opinions of the Ministry of Energy and Natural Resources, the Ministry of Interior, and the General Directorate of State Hydraulic Works (DSİ). Provincial Accounting Administrations will be authorized to grant water use right for HEPP’s, with condition of obtaining DSİ’s opinion.

In case real and legal entities generating electricity from RER give the generated electricity exceeding their needs to the distribution system, they will benefit from the determined purchase prices for a period of 10 years. Within this scope, it will be compulsory that the electrical energy given to the distribution system will be purchased by the related distribution company having retail sales license.

Additional incentive will be given if electro-mechanical equipment is manufactured domestically

In case mechanical or electro-mechanical equipment used in production facilities depending on RER of licence-owner legal entities and which are put into operation before December 31, 2015 are manufactured domestically, an additional incentive of between 0.4 and 2.4

US$ cents per kWh will be given on top of the determined prices for electrical energy given to the transmission or to the distribution system, being generated in these plants, for a period of 5 years starting from the date of putting the production facilities into operation.

Sub-stations which solar power facilities can be connected to, will be determined and published by MENR

Within 6 months starting from the date of enactment of the arrangement, and until December 31, 2015, sub-stations which production facilities depending on solar power can be connected to and the connection capacities will be determined and published by MENR, upon obtaining technical opinions of

Electrical Power Resources Survey & Development Administration (EİE) and Turkish Electricity Transmission Co. (TEİAŞ). Connection capacities and sub-stations for the years after the date of December 31, 2015, will be determined and published by MENR each year, the first being on April 1, 2014.

In the stage of constituting connection opinions while license applications are being evaluated by EMRA, priority will be given to RER facilities within the scope of this arrangement. For license applications made for electricity generation facilities depending on solar power, in case the owner of the landpiece where facilities are located makes a license application, another application will not be made for the same location. In case there are more applications then one for the same location or for the same sub-station, contest will be introduced by TEİAŞ, by means of competitive bidding of prices determined to be applied for the periods determined by Law, to determine the proportion that will be connected to the system up to the capacity that is announced, among applications made.

With the Law, the total installed power of RER licensed production facilities depending on solar power that will be connected to the transmission system until December 31, 2013, will not be over 600 MW. The Cabinet will be authorized to determine the total installed power of production facilities depending on solar power that will be connected to the transmission system after December 31, 2013.