On the purpose of meeting the energy gap of Turkey and of increasing of the energy production, adequate legal reforms have been made regularly by taking the market requirements and market situation. Recently, a resolution in renewable energy support mechanism has been enacted. In addition to this, the Ministry of Customs and Trade has been working on support of the establishment of energy cooperatives.
Tariff incentives for renewable investments extended until 2020
The feed-in tariff incentives for renewable energy manufacturing plants have been extended until 2020 through a resolution of Council of Ministers dated 05.12.2013. Accordingly, the feed-in tariff will also be applicable for the manufacturing license owners which will be put into operation between 2016 and 2020. As is known, the investments in renewable energy has been supported in Turkey regarding the energy resources through the related legislation since 2010. According to the recent law, manufacturers in renewables may benefit from the feed-in tariff incentives of Renewable Energy Resources Support Mechanism (“Support Mechanism”) under certain conditions for 10 years. Not only manufacturing, but also use of local equipment has been supported by laws. In addition to the amendment in feed-in tariff period, the premium for local equipment in renewable energy plants is also extended until 2020 within the frame of the above mentioned Resolution. This bonus for local equipment changes depending on the energy resource and there are no differences between local and foreign investors in these legal regulations.
New entity structure: energy production and consummation cooperatives
Cooperative as a legal entity type is not common in energy sector in Turkey compared to other countries in Europe. Recently, the Ministry of Customs and Trade has declared that energy cooperatives will be put into practice according to the Cooperative Plan for 2012-2016. This plan intends to provide the establishment of renewable energy cooperatives as an alternative initiative type in Turkey to increase the energy supply from local resources. According to the declaration of Ministry of Customs and Trade, energy cooperatives will operate within the frame of the Unlicensed Power Generation Regulation and related legislation. The establishment of cooperatives is subject to the Cooperative Law and a sample articles of association has been confirmed by the Ministry of Customs and Trade.
When examining the support mechanisms in the European Union, it may be determined that each support mechanism has been implemented in accordance with the market situation and with the and that the feed-in tariffs are applied in several countries for a longer period than in Turkey. If the demand and external dependence for the energy of Turkey is regarded, the extension of feed-in tariffs may lead up more investments in renewables and thereby as a factor for meeting of the gap in energy of Turkey for the long term.
The premium for local equipment in power generation may be regarded as a positive development for the local investors and it will contribute to technology development in related sectors in Turkey to a large extent.
The support of establishment of new legal entity types in energy production may be regarded also as a contribution to energy market. Within the establishment of energy cooperatives, more renewable energy resources will be evaluated and this will contribute to the energy efficiency and accordingly to decrease of external energy dependence.