ARTICLE
4 January 2023

Aggregation Activity In The Electricity Market

LP
LBF Partners
Contributor
LBF Partners, an Istanbul based law and consultancy firm, provides full legal and consultancy services to its foreign and domestic clients both in Turkey and at international level. The unique qualification of our team members enables combining legal theory and practice at all times. Visit us at http://www.lbfpartners.com/en/
Articles 7, 8 and 9 of the Law No. 7429 on the Amendment of the Electricity Market Law, Certain Laws and the Decree Law No. 375 have amended the Electricity Market Law No. 6446...
Turkey Energy and Natural Resources
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Articles 7, 8 and 9 of the Law No. 7429 on the Amendment of the Electricity Market Law, Certain Laws and the Decree Law No. 375 have amended the Electricity Market Law No. 6446 ("Law") and created a new field of activity subject to a license by adding aggregation activity to the electricity market legislation. The procedures and principles regarding the aggregation activity will be determined with a regulation to be issued by the Energy Market Regulatory Authority ("EMRA").

Within the scope of the amendments, the definitions of aggregator and aggregation are made in the Law, the scope of the activities to be carried out subject to a license is expanded, and general principles regarding the aggregation activity are determined. In this context, these amendments to the electricity market legislation are detailed below. 

  1. Collecting Activity

With the addition made to Article 4 of the Law, which lists the activities that may be carried out subject to a license, it is regulated that aggregation activities may be carried out on condition that a license is obtained, and legal entities holding supply licenses may also carry out aggregation activities within the scope of their supply licenses. In this context, with the subparagraphs (eee) and (fff) added to Article 3 titled "Definitions and abbreviations", the definition of the terms "aggregator" and "aggregation" are made. The aggregator is defined as "a legal entity holding an aggregator license or a supply license that has signed an agreement with one or more network users to carry out aggregation activities in the electricity market on behalf of such network users" and the aggregation activity to be carried out by the aggregator is defined as "the market activity carried out by the aggregator within the scope of combining the consumption and/or production of one or more network users".

Article 12/A added to the Law stipulates that aggregators will be authorized by users through agreements, but cannot authorize legal entities holding supply licenses with which users have agreements. In the second paragraph of the same article, the activities that aggregators can perform are listed as managing the programs of the consumers and producers with whom they have signed an agreement, conducting market transactions related to the purchase and sale of electrical energy and capacity, and participating in procurement processes related to ancillary services.

As can be understood from the said provisions, aggregators will enable consumers and producers operating in the electricity market to act as a single entity in their actions in the energy markets by the pool created by collecting many different loads with different characteristics, and will enable market actors who do not trade directly in the electricity markets due to their low load capacities to participate in the market. Aggregators will manage their portfolios according to the flexibility potential of consumers and producers, and provide income to their participants according to load flexibility. Thus, by acting as an energy manager between the system operator, consumers and producers; aggregators will both provide participants with the opportunity to earn income and minimize the risk according to the load flexibility of the pool formed by the participants. In this way, by providing a more balanced market to the system operator, it is aimed to ensure system, supply security and efficient use of energy resources through specialized intermediaries.

  1. Effective Date of Regulation

On December 28, 2022, the aforementioned regulations published in the Official Gazette entered into force on the same day, together with the transitional provisions.

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.

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ARTICLE
4 January 2023

Aggregation Activity In The Electricity Market

Turkey Energy and Natural Resources
Contributor
LBF Partners, an Istanbul based law and consultancy firm, provides full legal and consultancy services to its foreign and domestic clients both in Turkey and at international level. The unique qualification of our team members enables combining legal theory and practice at all times. Visit us at http://www.lbfpartners.com/en/
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