Author: Rüştü Mert Kaşka
Introduction
Turkish electricity market has been going through turbulent times particularly in 2022. Steep increases in commodity prices that are used in electricity generation have urged the policy makers to take measures for minimizing further price increases in the electricity market as well as for maintaining security of supply. One such measure was the introduction of the source-based support fee mechanism.
In broadest terms, this mechanism contemplates that low-cost power plant owners will set aside a portion of their revenues generated from their electricity trade and pay that portion to Enerji Piyasaları İşletme Anonim Şirketi (“EPİAŞ”) (in English: Energy Exchange Istanbul), which will then distribute the accumulated pool of cash to high-cost power plants. Although an exception was contemplated for bilateral agreements concluded before the adoption of source-based support fee mechanism, there has been a recent disagreement between Energy Market Regulatory Authority (“EMRA”)/EPİAŞ and market participants as to the scope of such exception. This was followed by retrospective invoices and administrative lawsuits.
This article will examine the source-based support mechanism and its implications on the existing bilateral agreements.
