Draft Electricity Market Amendments Under Public Consultation: Key Changes and Potential Impacts

The Energy Market Regulatory Authority (“EMRA”) announced on 4 June 2026 that it had launched a public consultation on a comprehensive regulatory package proposing amendments to various pieces of legislation governing the electricity market. The package consists of ten separate draft regulations, with the deadline for submitting comments set as the close of business on 15 June 2026.

The drafts opened for public consultation cover regulations relating to balancing and settlement processes, balancing power market practices, unlicensed electricity generation, renewable energy support mechanisms, connection and system use provisions, ancillary services, the electricity market activities of organized industrial zones, and various market operation mechanisms. In this respect, the package addresses a broad regulatory area, ranging from the technical operation of the electricity market to the rights and obligations of market participants.

A holistic review of the drafts indicates that EMRA aims to update various regulations in light of recent needs arising in the electricity market, uncertainties encountered in practice, and transformations in the market structure. That said, the scope and impact of each draft differ, while certain amendments are technical in nature and seek to clarify existing practices, others introduce structural changes that may have more pronounced implications for market operation.

Within this framework, this study will examine each of the ten draft regulations opened for public consultation under separate headings. For each draft, the proposed amendments will be summarized, the key provisions will be highlighted, and the position of the relevant changes within the existing regulatory framework will be assessed in general terms. The purpose of this study is to bring together the principal amendments and noteworthy issues arising from the draft regulations in a single analysis.

Although the final regulations may be revised considering the comments submitted during the public consultation process, the current drafts provide important indications of EMRA’s regulatory priorities and the likely future direction of the market.

1) Draft Regulation Amending the Regulation on the Certification and Support of Renewable Energy Resources

Overall, the draft amendments appear to introduce provisions aimed at clarifying Renewable Energy Resources Support Mechanism (YEKDEM) calculations for facilities with storage, supporting compliance with system operator instructions, updating the payment mechanism applicable to unlicensed generation facilities, and strengthening oversight and audit mechanisms relating to support schemes.

As expressly stated in the general rationale to the draft, the main drivers of the regulation are the impact of energy movements arising from the internal consumption of storage units on YEKDEM calculations, and the reflection of generation behaviour under emergency instructions in the support mechanism. The amendments to Article 27 also appear to strengthen the recovery framework for undue or unjustified payments.

Purpose of the Regulations on Facilities with Storage

One of the key parts of the draft consists of the new provisions introduced under Article 8 for storage-integrated generation facilities. While the current regulation sets out the basic principles as to which energy held in a storage unit is to be considered within the scope of YEKDEM, certain matters are not expressly regulated, including the exceedance of the storage unit’s capacity, the coexistence of energy from different sources in the same storage unit, and the status of energy held in storage at facilities that join YEKDEM at a later date.

The new paragraph 12 introduced by the draft provides that the total amount of virtual records maintained for a storage facility may in no event exceed the physical capacity in operation. This provision appears intended to ensure that virtual records do not exceed the operational capacity of the relevant storage unit for YEKDEM calculation purposes.

 In addition, where new energy is stored after the capacity has been reached, the existing records are to be reduced proportionally. This approach may contribute to maintaining virtual records in a manner consistent with the operational capacity of the storage unit.

The new paragraph 13 specifically addresses facilities that initially operate outside YEKDEM and subsequently join the support mechanism. Accordingly, no YEKDEM payment will be made for energy held in storage before the date of participation in YEKDEM.

This provision appears intended to ensure that energy stored before participation in YEKDEM is not eligible for support payments under the mechanism, subject to the provisions of Article 6/C of the Law.

When considered together, these amendments indicate an intention to establish a more stringent accounting and monitoring system for distinguishing between energy within the scope of support and energy outside the scope of support at storage-integrated generation facilities.

Change to the Payment Mechanism for Unlicensed Generation Facilities

Through the amendments made to Articles 12 and 18 of the draft, a new element is introduced into the payment system applicable to unlicensed generation facilities. Accordingly, a new cost component named the Unlicensed Generation Non-Compliance Cost Amount (“TELMT”) is introduced. This amount refers to the costs calculated where unlicensed generation facilities fail to comply with instructions issued under the Regulation on Unlicensed Electricity Generation in the Electricity Market. Under the draft, it is envisaged that this amount will be included in YEKDEM calculations, thereby reflecting the financial consequences of instruction breaches by unlicensed generation facilities in the support mechanism.

With this amendment, TELMT is reflected in the YEKDEM calculation not directly through the producer, but through the incumbent supplier or aggregator. Accordingly, the amendment appears to link compliance with the relevant instructions to the financial calculations carried out under the YEKDEM framework.

Treatment of Excess Generation Under Emergency Instructions

Another important part of the draft is the amendments made to Article 23, which relate to system operation considerations. Where the System Operator issues instructions under emergency conditions or within the scope of the Balancing Power Market (“BPM”), the expected generation level of the market participant is determined and any generation exceeding that level is assessed separately.

The new regulation introduces rules on the treatment, within the scope of YEKDEM, of generation amounts exceeding the expected generation level in settlement periods where the Market Clearing Price (“MCP”) and the conditions defined in the relevant article are met under certain system conditions. In other words, the draft does not regulate the physical operation of generating units directly, but rather the treatment of certain generation amounts for YEKDEM calculation purposes.

The regulation may also contribute to a closer alignment between the operation of the support mechanism and system operation considerations. In this respect, the draft appears to be not only a financial regulation, but also a measure relating to operational security and balancing policy.

Stricter Oversight Against Undue and Unjustified Payments

The amendments made to Article 27 constitute the strongest audit-related aspect of the draft. The existing regulation largely focuses on the recovery of amounts paid where misleading information or documents are submitted where the draft is more detailed and introduces additional recovery and compliance-related measures. Matters such as removal from the final YEK list, recovery of payments made in previous periods, application of interest, recovery of domestic component support, and additional sanctions in cases involving the use of false or misleading documents are regulated in detail.

The new provisions indicate that not only the conditions for participation in YEKDEM, but also the conditions for benefiting from domestic component support, will be subject to stricter scrutiny. In this context, the draft appears to establish a stronger link between the Ministry’s domestic component assessments and the market operator’s recovery mechanism.

Accordingly, the draft appears intended to support the proper functioning of the YEKDEM and domestic component support mechanisms by ensuring that support is granted only where the relevant conditions are met.

Assessment

When assessed as a whole, the draft regulation appears to aim not at creating a new incentive mechanism or increasing support levels, but rather at operating the existing support mechanism in a more controlled, more auditable manner that is better aligned with system needs.

The draft principally focuses on the more precise treatment of energy stored in storage facilities for YEKDEM purposes, the incorporation of compliance-related elements into the support calculation framework, and the reduction of risks associated with undue payments and overcompensation. Within this framework, the draft may be considered to aim at making the rules governing the implementation of the existing support mechanism more detailed and strengthening the alignment of the support mechanism with system operation.

2) Draft Amendments to the Regulation on Electricity Market Activities of Organized Industrial Zones and Industrial Zones

Considering the general rationale of the draft together with the newly introduced provisions, the regulation appears to aim, among other things, to address the implementation of emergency instructions issued in response to surplus generation on the grid and to facilitate the implementation of such instructions in respect of Organized Industrial Zones (“OIZs”) and Industrial Zones (“IZs”), where relevant.

Strengthening the Intervention Mechanism for Unlicensed Generation Facilities

As noted in the general rationale, surplus generation on the grid may require emergency measures, including instructions relating to the curtailment of generation from unlicensed generation facilities.

The draft regulation makes it an explicit obligation for load shedding or generation curtailment instructions relating to unlicensed generation facilities issued by TEİAŞ in such circumstances to be implemented not only by electricity distribution companies, but also by Organized Industrial Zones and Industrial Zones holding distribution licences. In other words, unlicensed generation facilities operating within an OIZ or IZ may also be required to reduce or fully cease generation where system security so requires.

Potential Relevance for Aggregation Activities

One noteworthy aspect of the draft is that incumbent supply companies and aggregators are referred to together in the new provisions.

The express reference to aggregators suggests that they may have a role in the communication and monitoring of emergency instructions in circumstances falling within the scope of the draft.

Accordingly, where deemed necessary from a system operation perspective, instructions to reduce or cease generation may be communicated to unlicensed generation facilities where such facilities fall within the relevant scope of an aggregator’s activities, and compliance with such instructions may be monitored or facilitated.

In this respect, the draft appears to acknowledge the role of aggregators in processes relating to the implementation and monitoring of emergency instructions.

Introduction of a Data-Sharing Obligation

Another important pillar of the draft is the introduction of a data-sharing obligation. Under the new regulation, OIZs and IZs will be required to share with incumbent supply companies and aggregators information on unlicensed generation facilities connected to their distribution systems, as well as information regarding the implementation of the instructions by the facilities subject to such instructions. This regulation may be said to aim at establishing a monitoring and verification mechanism.

The provision is intended to facilitate the sharing of information necessary for monitoring compliance with the relevant instructions and may support a more systematic approach to the monitoring and verification of their implementation.

The Regulatory Context in Which the Draft Has Emerged

The draft may also be viewed in the broader context of recent regulatory developments relating to distributed energy resources, unlicensed generation facilities and aggregation activities. In recent years, Türkiye’s electricity system has evolved into a far more complex structure compared to previous periods, against the broader background of intensive solar power investments, electricity generation facilities with storage, growth in unlicensed generation capacity, and the increasing prevalence of distributed energy resources.

While system operation was historically carried out largely through TEİAŞ and licensed generation companies, substantial unlicensed generation capacity has also become a factor that may directly affect system operation.

From the perspective of investors, the regulation could be viewed as supporting objectives such as strengthening grid security, enabling faster intervention in emergencies, improving the functionality of the aggregation market, and clarifying duties and responsibilities in instruction processes. That said, making the mechanism for implementing generation curtailment instructions more effective for unlicensed generation facilities may also bring certain consequences. In our view, it may be necessary to take into account matters such as the possibility that certain unlicensed generation facilities, particularly those with variable renewable generation profiles, may be subject to more frequent curtailment during high-generation periods, the imposition of new operational obligations on OIZ and IZ administrations, increased data-sharing and reporting obligations, and the emergence of administrative sanction risks due to the reference to Article 16 of the Electricity Market Law.

Assessment

Although this draft may at first glance appear to be a technical amendment consisting of only two articles, it may signal a broader evolution in the approach reflected in the regulatory framework. It may be argued that the draft reflects an approach aimed at integrating unlicensed generation facilities more actively into system operation, strengthening the applicability of the existing emergency instruction mechanism for OIZs and IZs, and enabling this process to be monitored through data sharing among incumbent supply companies, aggregators, OIZs and Industrial Zones.

In this context, the draft may be considered a regulation that could contribute to the more effective management of the effects of increasing renewable energy and unlicensed generation capacity on system operation, the strengthening of processes relating to the implementation and monitoring of emergency instructions, and the practical functioning of the aggregation mechanism. However, the practical effects of the amendments and their consequences for market participants will become clearer once the content of the final regulation and implementation practice take shape.

3) Draft Regulation Amending the Regulation on Unlicensed Electricity Generation in the Electricity Market

While the draft may initially appear to introduce only limited technical amendments, it contains provisions of considerable importance considering the growing generation capacity of unlicensed facilities, particularly those based on solar energy, and the resulting impact on grid operation. Taken together, the amendments appear intended to facilitate the implementation of emergency instructions issued by TEİAŞ during periods of surplus generation on the grid in respect of unlicensed generation facilities.

The draft introduces provisions relating primarily to the remote control of certain unlicensed generation facilities, compliance with emergency curtailment instructions, and the consequences of non-compliance with such instructions. In this respect, the draft appears to integrate certain unlicensed generation facilities more closely into system operation arrangements aimed at maintaining grid security.

Remote Control of Unlicensed Power Plants

The provision added to Article 21 authorizes the relevant grid operator to remotely control unlicensed electricity generation facilities connected to the distribution system and falling within the scope of Article 75, paragraph 4 of the Balancing and Settlement Regulation. The draft would expressly authorize the relevant grid operator to remotely control certain unlicensed generation facilities for the purpose of implementing emergency instructions issued within the scope of the balancing power market.

If the draft enters into force, emergency instructions issued by TEİAŞ may be implemented directly at facility level, and grid operators may be able to use remote control capabilities for the limitation or suspension of generation. Accordingly, emergency instructions issued by TEİAŞ may be implemented directly at facility level through the remote-control capabilities of the relevant grid operator.

Enhanced Consequences of Non-Compliance with Curtailment Instructions

One of the most significant provisions of the draft is Additional Article 4. This provision expressly states that, where emergency generation curtailment instructions issued by TEİAŞ are not complied with, no payment will be made for generation corresponding to the unfulfilled part of the instruction.

Although the limitation or reduction of generation was possible before this amendment, the financial consequences and sanctions associated with non-compliance had not been set out with such clarity. The draft therefore not only introduces a technical control mechanism but also specifies the financial consequences of non-compliance with emergency curtailment instructions.

Financial Consequences of Non-Compliance

Under the second part of Additional Article 4, the amount calculated for energy generated despite the instruction may be recovered from the relevant unlicensed producer. This would not merely result in a loss of revenue for the producer; it may also lead to the recovery from the producer of amounts calculated based on the prices under the Renewable Energy Law or the tariff amounts used for pricing surplus energy.

Accordingly, the draft provides both for the non-payment of amounts corresponding to the unfulfilled portion of the instruction and for the recovery of certain amounts from the relevant producer.

Taken together, these provisions are likely to strengthen incentives for compliance with TEİAŞ’s emergency instructions.

Strengthening the Role of Aggregators

Another noteworthy feature of the draft is that aggregators, alongside incumbent supply companies, are expressly included in the process. This is consistent with the aggregation legislation that has entered into force in recent years.

Given EMRA’s recent broader approach of enabling distributed generation resources, flexibility services, storage facilities and consumer portfolios to be managed more effectively through aggregators, the draft does not merely regulate emergency instructions; it also envisages a clear role for aggregators in the process. This may be viewed as reflecting an approach aligned with the aggregation framework developed recently.

Sharing Offset Data with Suppliers

Under the provision added to Article 26, the market operator will notify the relevant suppliers of the net consumption amount and the amount of consumption offset against generation.

This amendment may facilitate the sharing of settlement-related data with suppliers and support their billing and portfolio management processes.

In our view, it may be regarded as a technical amendment with potentially significant implications for data management and market operation.

Aligning Connection Agreements with the New Regime

Provisional Article 14 requires unlicensed producers falling within the scope of Article 75, paragraph 4 of the Balancing and Settlement Regulation to align their existing connection agreements with the new system.

Accordingly, the draft would also affect existing facilities falling within the relevant scope.

Transition Period and Contractual Penalties

The second paragraph of Provisional Article 14, which postpones the application of certain contractual penalties under connection agreements until 31 December 2026, indicates that the draft contemplates a transition period before the relevant contractual penalties become applicable.

Assessment

Overall, the draft appears to be aimed at strengthening the operational mechanisms available during periods of surplus generation, facilitating the implementation of TEİAŞ's emergency instructions, and setting out the consequences of non-compliance for certain unlicensed generation facilities and other relevant market participants.

4) Draft Regulation Amending the Electricity Market Ancillary Services Regulation

As expressly stated in the general rationale, the practical experience gained during the December 2025–February 2026 period has revealed the need to revise the existing rules. The draft appears to aim at improving the practical operability of the demand-side participation mechanism and addressing the operational issues encountered by aggregators.

Making Demand-Side Participation More Workable

Under the current framework, when TEİAŞ issues a load reduction instruction, the aggregator is expected to fulfil that instruction within certain tolerances. In practice, however, consumption facilities cannot be controlled with the same degree of precision as generation facilities. As a result, aggregators often reduce load beyond the instructed amount, which, according to the general rationale, is mainly due to the inability to measure interim consumption values with sufficient accuracy. The draft appears to recognise that load reductions exceeding the instructed amount may occur in practice and seeks to introduce a more flexible approach to their treatment.

Providing Aggregators with Operational Flexibility

Under the provision added to Article 31/c, the current structure requires the consumption facilities participating in the service and the meters associated with them to be fixed in the ancillary service agreement. The draft, however, allows the service to be provided through only some of the registered meters belonging to the relevant consumption facilities, subject to TEİAŞ’s approval.

Changes to the Performance Assessment Framework

A significant amendment in the draft is found in Article 31/f, where the relationship between the instruction issued by TEİAŞ and the actual load reduction achieved is reassessed. Under the current regulation, various sanctions apply in cases of underperformance. Under the draft, performance classification continues where the load reduction falls short of the instruction; however, where the load reduction exceeds the instructed amount, the result is directly deemed to be “fulfilled”.

Under the draft, where the load reduction exceeds the instructed amount, the relevant performance will be deemed to have been fulfilled.

Accordingly, the draft treats load reductions above the instructed amount as successful performance of the relevant obligation.

Controlled Flexibility for Excess Load Reduction

Another notable point in the general rationale is that load reductions exceeding the activation instructions issued within the scope of demand-side participation services are permitted under certain conditions. The regulatory authority acknowledges that, in practice, aggregators may reduce load beyond the instructed amount because interim consumption values at consumption facilities cannot be determined with sufficient precision. As stated in the general rationale, unlike generation facilities, consumption facilities do not allow interim consumption values to be established with the same level of accuracy. Since this practical issue makes it difficult to assess performance under the existing rules and may hinder the effective provision of demand-side participation services, the regulatory authority proposes a more flexible approach.

The approach set out in the general rationale is based on the principle that load reductions exceeding the activation instruction should not automatically be treated as non-compliance or underperformance. On the contrary, where such excess reductions may benefit system operation and grid operations, the generale rationale indicates that load reductions above the instructed amount may, under certain conditions, be treated as compliant. This approach appears to aim at operating demand-side participation services by taking account of operational realities in the field, rather than applying purely theoretical and rigid performance criteria.

The general rationale further states that, where load is reduced by up to fifty per cent more than the instruction in a manner beneficial to system and grid operation, the instruction will be deemed to have been fulfilled. In addition, subject to TEİAŞ’s prior approval and provided that no payment is made beyond the amount payable under the activation instruction, additional load reduction of up to one hundred and fifty per cent of the instructed amount may be allowed. This aspect of the general rationale appears to reflect consideration of the measurement uncertainties encountered in practice.

That said, the draft does not provide for additional remuneration beyond the activation instruction. The general rationale also indicates that, while additional load reduction is permitted, the draft specifically seeks to prevent such additional contribution from becoming an additional revenue stream. As expressly stated in the general rationale, even where TEİAŞ’s prior approval has been obtained, no payment will be made for load reductions exceeding the activation instruction beyond the amount specified in that instruction. In other words, additional load reduction that is considered beneficial for system security may be accommodated within the framework set out in the draft, but such additional reduction is not separately priced and is not allowed to become a new revenue-generating mechanism for market participants.

The approach described in the general rationale appears intended to introduce greater operational flexibility while maintaining the existing remuneration framework. On the one hand, it reduces the operational risks faced by aggregators due to measurement uncertainties and field conditions; on the other hand, it prevents market participants from generating additional revenue by reducing load beyond activation instructions.

The draft may be interpreted as indicating that additional contribution to the system may be provided, but payment will be made only for the requested service level. Accordingly, the amendment may be viewed as increasing operational flexibility in demand-side participation services while maintaining the principle that payment is limited to the instructed service level.

A New Approach to Capacity Payment Sanctions

Under the current regulation, where the result is “not participated”, neither the activation payment nor the capacity payment for the relevant settlement period is made. Under the draft regulation, the activation payment is still not made; however, the capacity payment is not forfeited in full. Instead, the reduction will be applied in proportion to the ratio of “not participated” hours in the critical month to the total activation hours, which represents a significant change.

Assessment

This draft may essentially be viewed as a regulation aimed at refining the demand-side participation mechanism. Based on the experience gained during the initial implementation period between December 2025 and February 2026, it seeks to address issues encountered in the performance measurement and remuneration of aggregators.

The regulation appears to aim at making demand-side participation services more workable and commercially more predictable, while enabling TEİAŞ to obtain greater flexibility without compromising system security. Amendments such as applying a performance-proportionate reduction rather than a full loss of the capacity payment and treating excess load reduction directly as “fulfilled”, may have an impact on the practical attractiveness of the demand-side participation mechanism and may influence certain market participation decisions.

5) Draft Regulation Amending the Electricity Market Connection and System Use Regulation

The Draft Regulation Amending the Electricity Market Connection and System Use Regulation introduces more detailed rules on grid connection and system use for electricity storage facilities. In particular, it proposes amendments to the capacity values to be taken into account in connection and system use processes for stand-alone storage facilities, generation facilities with storage, and storage units integrated into generation facilities, as well as to the applicable system use charges.

The proposed amendments are intended to clarify the connection and system use regime for storage assets, including the capacity values to be reflected in agreements, the calculation of system use charges, and the treatment of capacity increases.

Reflecting the Actual Capacity of Storage Facilities in Connection Agreements

Under the draft, the injection and withdrawal values specified in the connection and system use agreements of stand-alone storage facilities, generation facilities with storage under Article 7, paragraphs 10 and 11 of the Electricity Market Law (the “Law”), and storage units integrated into generation facilities may not be lower than the licensed electrical capacity of the relevant storage unit.

This provision requires that the injection and withdrawal values reflected in connection and system use agreements may not be lower than the licensed electrical capacity of the relevant storage unit.

Accordingly, the contracted injection and withdrawal values may not be lower than the licensed electrical capacity of the relevant storage unit.

The amendment therefore links the capacity values reflected in connection and system use agreements to the licensed electrical capacity of the relevant storage unit.

Introducing a Specific System Use Charge Regime for Storage Facilities

A key element of the draft is the treatment of fixed transmission and distribution system use charges for storage facilities. For stand-alone storage facilities, generation facilities with storage within the scope of Article 7, paragraph 10 of the Law, and capacity increases made under Article 7, paragraph 11, fixed transmission system use charges and fixed charges under the two-part distribution tariff would be applied on a single-direction basis. This provision introduces a specific approach for the application of fixed system use charges to such facilities.

For transmission-connected facilities, the draft indicates alternative approaches for determining the applicable unit price, namely the average of, the higher of, or the lower of the applicable generation and consumption charges. This aspect of the provision appears not yet to have been finalised.

Standardising Cost Calculations for Storage Facilities

The draft also defines the capacity values to be used in calculating fixed system use charges. For stand-alone storage facilities and generation facilities with storage within the scope of Article 7, paragraph 10 of the Law, the calculation would be based on the higher of the contracted injection capacity and the contracted withdrawal capacity.

Separate Treatment of Capacity Increases Through Storage

The draft further addresses capacity increases made under Article 7, paragraph 11 of the Law. For facilities benefiting from such increases, the withdrawal-side capacity value would be determined by reference to the existing contracted withdrawal capacity outside the scope of the increase. On the injection side, the electrical capacity of the storage unit would be added to the existing injection capacity. The provision therefore sets out the capacity values to be used for facilities benefiting from storage-based capacity increases.

This provides further guidance on how such increases would be treated for system use charge purposes.

Clearer Calculation Rules for Storage Units Integrated into Generation Facilities

The draft also clarifies the treatment of storage units integrated into generation facilities for system use charge purposes. For multi-source generation facilities, injection and withdrawal capacity values would be determined without taking auxiliary source units or storage units into account. This provision specifies the capacity values to be taken into account for system use charge purposes in the case of multi-source generation facilities.

Points for Investors to Consider

The requirement that contracted capacity may not be lower than the electrical capacity of the storage unit could have cost implications for certain projects. In addition, using the higher of the relevant capacity values may, in some cases, increase fixed system use charges. For transmission-connected facilities, the draft leaves open whether the applicable unit price will be based on the average of generation and consumption charges, the higher amount or the lower amount. In our view, the approach adopted in the final regulation may affect investment costs.

Assessment

Overall, the draft seeks to provide a more detailed framework for the connection and system use regime applicable to electricity storage facilities and to clarify certain aspects of the related calculation methodology.

6) Board Decision on the Reporting of Non-Fulfilment of Balancing Power Market Instructions

Under Articles 71/A and 73 of the Electricity Market Balancing and Settlement Regulation, system operator (TEİAŞ) reports non-fulfilled instructions to EMRA under Articles 71/A and 73 of the Electricity Market Balancing and Settlement Regulation. This draft Board Decision appears to introduce a more selective and resource-based framework for the assessment of non-compliance with load increase and load decrease (“YAL/YAT”) instructions issued in the Balancing Power Market (“BPM”). In other words, rather than requiring every instruction breach to be reported automatically, the draft appears to exclude cases falling below certain thresholds from the reporting scope, by introducing specific criteria and thresholds.

Short-Duration Instructions Are Effectively Carved Out

Under the decision, YAL/YAT instructions shorter than 15 minutes will not be considered, and instructions issued to thermal power plants where the period between issuance and commencement of the instruction is less than 15 minutes will also not be reported. Given that short-duration instructions may be technically difficult to implement, this provision appears to take into account the technical limitations associated with such instructions and applies specific thresholds for their exclusion from reporting.

Flexibility Is Introduced for Reverse-Direction Instructions

Under the decision, if a reverse-direction instruction is issued within 15 minutes after the end of YAL/YAT instructions given to a thermal power plant, such reverse-direction instructions will not be included in the reporting assessment. This provision allows certain operational constraints of thermal generation facilities to be taken into account in the reporting process.

An Exemption Is Introduced for Low-Volume Participants

Under the decision, where a settlement-relevant unit (UEVÇB) has 10 or fewer instructions in a month and its total monthly instruction energy is below 500 MWh, the amount of non-delivered instructions will not be subject to reporting. This provision will result in such units not being included in the reporting assessment within the specified thresholds.

Participation in Secondary Frequency Control Is Considered

Under the decision, imbalance amounts arising from secondary frequency control for settlement-relevant units (UEVÇB) providing SFC services will be deducted from the amount of non-delivered instructions. Accordingly, deviations resulting from interventions made to maintain system frequency may be excluded from the assessment of non-delivered instructions.

A Resource-Based Performance Framework Is Introduced

Rather than applying the same performance criterion to all generation facilities, the decision sets different thresholds by resource type based on instruction fulfilment rates. The establishment of separate performance thresholds for resources other than reservoir hydro and natural gas power plants means that operational differences among generation technologies will be reflected in the reporting process. This approach may be seen as introducing a framework that considers the technical characteristics of different resource types.

Exemptions Fall Away Where System Security Is at Risk

Under the decision, if non-compliance with an instruction has jeopardized system security, the assessment will be carried out without applying any of the thresholds or exemptions described above. The decision therefore grants market participants a degree of flexibility, while giving overriding priority to system security.

Assessment

The overall direction of this draft Board Decision appears to be to make the reporting of non-fulfilled instructions in the Balancing Power Market more selective and operationally practicable. The decision’s general approach can therefore be summarized as focusing on instruction breaches that are material within the framework defined by the specified thresholds and criteria.

7) Draft Board Decision on the Permissible Spread Between Bid Prices in the Balancing Power Market

Under the draft Board decision opened to public consultation by EMRA, it is proposed, pursuant to Article 70(4) of the Electricity Market Balancing and Settlement Regulation, that the permissible ratio applicable to the spread between the highest and lowest bid prices, submitted by Balancing Power Market ("BPM") participants be set at 50% for all quantity levels, separately for load increase and load reduction bids, excluding hydraulic facilities.

Although the draft appears relatively brief at first glance, it can be considered a notable change in bid parameter limits that may affect the way bids are structured in the BPM.

How Are BPM Bids Structured Under the Current Practice?

According to the BPM bid structure published by EPİAŞ, market participants may submit bids at 15 different quantity levels, separately for load increase ("YAL") and load reduction ("YAT") directions. Bid prices are subject to certain rules, including the requirement that the spread between the highest and lowest prices within the same bid set may not exceed 20%. In addition, load increase bids must be equal to or higher than the Market Clearing Price ("MCP") applicable for the relevant hour, while load reduction bids must be equal to or lower than the MCP. This structure enables the system operator to procure the balancing capacity it requires from the market across different price and quantity levels.

The draft regulation, by contrast, envisages increasing the permissible spread between the highest and lowest bid prices within the same bid set, compared to the current practice (as reflected in EPİAŞ bidding rules), where a 20% limit is applied, excluding hydraulic facilities. This would allow for wider differentiation between price levels within the same bid structure.

Potential Implications of the Regulation

The draft may allow market participants to reflect the costs and operational conditions associated with different quantity levels in their bids with greater flexibility. Since different quantity or capacity levels at certain generation facilities may not have the same cost structure, widening the permissible spread between bid prices may make differences in cost structures more explicitly reflected in bid curves. This may have implications for pricing outcomes in the balancing mechanism.

The draft regulation provides participants with a broader pricing range when formulating their bids, allowing cost elements and operational considerations associated with different quantity levels to be reflected more flexibly. As a result, bids for different quantity levels may be submitted with more differentiated price structures. Hydraulic generation facilities are excluded from the scope of the draft.

Assessment

The draft regulation envisages setting the permissible difference between bid prices in the Balancing Power Market at 50%, excluding hydraulic generation facilities. This change may allow for a wider range between the highest and lowest bid prices within the same bid set.

While this may introduce greater flexibility in bid structuring, the overall impact of this change on market behaviour and balancing outcomes will ultimately depend on implementation details and market participants’ response.

8)Draft Decision Amending the Decision on the Determination of the KÜPSM Value and the Coefficients to Be Used in KÜPSM and KÜPST Calculations Pursuant to Article 110 of the Electricity Market Balancing and Settlement Regulation

The draft introduces changes to the methodology used to calculate Deviation Quantity from the Final Day-Ahead Generation Schedule(“KÜPSM”), under Article 110 of the Balancing and Settlement Regulation. The most critical change, as expressly stated in the general rationale, is the transition to a net Final Day-Ahead Generation Schedule (“KGÜP”) approach.

As stated in the general rationale, the draft introduces a transition to net KGÜP notifications, aiming to increase the effectiveness of the data used in real-time balancing.

Transition to a Net KGÜP Approach

The rationale of the draft expressly refers to the “transition to net KGÜP notifications”. Whereas generation and consumption have so far been assessed separately in many calculations, a single net schedule will be established by netting generation and consumption within the same settlement period, together with load increase instructions, load reduction instructions, and the effects of secondary frequency control reserves.

This change may be relevant for storage-integrated facilities, hybrid generation structures and market participants that combine generation and consumption within the same portfolio.

The KÜPSM Calculation Is Being Redesigned

Under the new formula, the calculation of the Expected Settlement Period Generation/Consumption Schedule (BUDÜP) includes KUDÜP, load increase instructions, load reduction instructions, secondary frequency control reserve imbalances and limited frequency sensitive mode services. This means that where a participant deviates from its schedule due to an instruction issued by the system operator (TEİAŞ), that deviation will be reflected in the calculations. This approach may result in a structure that more closely reflects actual operational conditions.

Inclusion of Frequency Services in the Calculation

For the first time, the draft directly incorporates the effects of Secondary Frequency Control (SFC) service and Limited Frequency Sensitive Mode into the formula. This change may affect how imbalances arising from such services are reflected in the calculation.

Separate Provisions for Storage Facilities

For the first time, the draft regulates electricity generation facilities with storage and stand-alone storage facilities as separate categories. The draft sets out specific provisions applicable to storage facilities, taking into account their operational characteristics.

Implications for Group-Based Structures

The draft sets a separate coefficient for “groups established as balancing units”. The fact that group-based structures are considered separately in the calculation mechanism has implications for such structures.

A Separate Approach Is Introduced for Unlicensed Power Plants

The draft treats unlicensed power plants connected to the transmission system and those connected to the distribution system as separate categories. Different pricing and tolerance coefficients are set for each. In particular, a tolerance of 20% is envisaged for unlicensed power plants connected to the transmission system, while a tolerance of 25% is envisaged for those connected to the distribution system. This differentiation reflects the regulator’s intention to distinguish between different operational characteristics of these facility types.

Outage-Based Differentiation in Coefficients

The draft introduces a coefficient structure linked to monthly outage performance for renewable energy resources and other resources. Facilities exceeding specified outage thresholds are subject to different coefficient values.

Differentiated Tolerance Levels for Storage Facilities

The draft envisages a 5% tolerance for electricity generation facilities with storage, which is lower than the tolerance applied to wind and solar power plants. This indicates that different tolerance coefficients are defined for storage facilities compared with certain other generation types.

Assessment

Although the draft may appear at first glance to be a technical regulation concerning the KÜPSM calculation methodology, it introduces a number of changes relating to net KGÜP implementation, storage facilities, and coefficient structures.

The overall impact of these changes on market participants and deviation calculations will ultimately depend on implementation details and market practice.

9) Draft Decision Amending the Decision on the Distribution System Connection Agreement for Unlicensed Electricity Producers

A review of the amendments to Article 16 indicates that the revision to subparagraph (ç), together with the newly introduced subparagraphs (f) and (g), is aimed at ensuring that unlicensed generation facilities can be remotely monitored and, where necessary, remotely controlled. This approach is consistent with the recent regulatory trend pursued by EMRA, TEİAŞ and distribution companies, which increasingly focuses on grid operational security.

The evolving function of subparagraph (ç) in light of subparagraphs (f) and (g)

Under the current framework, subparagraph (ç) provides for the imposition of a contractual penalty where defective communication equipment belonging to the producer is not repaired or replaced within one month despite the distribution company’s written notice. Historically, this provision appears to have operated primarily as a technical obligation aimed at ensuring that communication equipment remains operational.

However, failure of communication equipment is no longer merely a communications issue, it may also affect SCADA integration, the ability to perform remote switching (connection/disconnection) operations, and the implementation of emergency instructions.

When assessed together with the newly introduced subparagraphs (f) and (g), the importance of communication equipment is further emphasised, and the practical effect of subparagraph (ç) can therefore be understood as broader in scope.

The main effect of this amendment can be interpreted as reinforcing the ability of distribution companies to remotely monitor unlicensed generation facilities falling within the scope of Article 75(4) of the Balancing and Settlement Regulation and, where necessary, to carry out remote switching operations. Communication infrastructure has thus become an increasingly important element from a system operation perspective.

What the new subparagraph (f) introduces

The new subparagraph (f) makes it mandatory for unlicensed generation facilities falling within the scope of Article 75(4) of the Balancing and Settlement Regulation to be integrated into the SCADA control centre of the relevant distribution company and to provide remote monitoring and remote switching (connection/disconnection) functionality. Accordingly, a contractual penalty will apply for each month in which such integration is not achieved. This introduces an explicit regulatory obligation, subject to contractual penalties.

From the system operator’s perspective, this enables distribution companies to monitor generation levels and operational conditions of such facilities in near real time and to better assess their impact on the distribution system. This, in turn, contributes to improved management of system conditions and operational parameters.

For the owners of unlicensed generation facilities, this may lead to additional capital and operating costs related to RTU systems, SCADA communication equipment, modems, communication lines and remote-control infrastructure. However, given that a penalty will be imposed for each month in which integration is not completed, the installation of this infrastructure effectively becomes necessary in practice.

What the new subparagraph (g) introduces

The new subparagraph (g) is particularly noteworthy in that it addresses operational continuity. Under this provision, a contractual penalty will apply where, in the context of complying with an emergency instruction, the distribution company is unable to carry out a remote disconnection operation due to a failure in the SCADA system or communication equipment of the unlicensed generation facility.

This provision indicates that not only the establishment of integration but also its ongoing operability is essential. If intervention cannot be performed because of a failure in the SCADA or communication system, the relevant facility owner may be subject to contractual penalties.

Assessment

When the amendment to subparagraph (ç) and the newly introduced subparagraphs (f) and (g) are considered together, the draft places increased emphasis on the integration of relevant unlicensed generation facilities with the SCADA control centres of distribution companies. Furthermore, the draft encourages the use of remote monitoring and remote-control capabilities, enabling distribution companies to intervene in generation facilities in certain circumstances, particularly in emergency situations, thereby supporting grid security.

From an energy market perspective, these amendments may indicate a gradual shift toward more active grid management and suggest that the regulatory framework is moving toward enhancing distribution companies’ visibility over, and operational interaction with, distributed generation resources.

10) Draft Regulation Amending the Electricity Market Balancing and Settlement Regulation

As is clear from the general rationale, the draft regulation appears to seek to address the surplus supply created by solar power plants during midday hours, appears to support the increased participation of demand-side resources, allows unlicensed generation facilities to be involved in system operation through emergency instruction mechanisms in certain circumstances, introduces further provisions concerning compliance with and monitoring of dispatch instructions, including in relation to thermal power plants, and introduces a broader use of settlement-period-based references in place of hourly structures, while also clarifying the role of electricity storage facilities and aggregation activities.

Possible Regulatory Direction: Towards a More Flexibility-Oriented Market Structure

Throughout the draft, the phrase “generation and/or consumption” is introduced in numerous provisions in place of “generation or consumption”. This may indicate a broader policy direction and suggests that the framework increasingly accommodates not only generation facilities, but also consumption units, storage systems and aggregator portfolios as elements that may be considered in balancing and settlement processes. The draft therefore may be seen as supporting the broader incorporation of flexibility resources and demand-side participation into the market structure.

Transition from an Hourly Structure to a Settlement-Period Structure

The replacement of the concept of “hour” with “settlement period” in several provisions of the draft reflects an effort to move balancing and settlement references to a settlement-period basis. This amendment creates a regulatory basis for a more granular time structure, depending on the applicable settlement period, and may support more refined system operation, particularly in managing intraday fluctuations in renewable generation.

More Explicit Inclusion of Storage Facilities

The draft explicitly incorporates electricity storage units and facilities into a number of provisions. Storage assets are clearly recognised within the regulatory framework in relation to day-ahead generation programs, available capacity and balancing processes. This development contributes to the clearer treatment of storage assets within market and balancing processes.

Closer Monitoring of Unlicensed Generation Facilities

The provision added to Article 23 requires the registration of meters used to measure the electricity drawn from the consumption point associated with an unlicensed electricity generation facility. This change enables more detailed monitoring of such facilities and may support their more accurate treatment for balancing and settlement purposes.

Strengthening the Role of Aggregators

The draft provides that day-ahead generation schedules and available capacity notifications for unlicensed electricity generation facilities connected to the distribution system are submitted through settlement-based injection-withdrawal units established on the basis of incumbent supply companies and/or aggregators. This framework enables aggregators to manage such portfolios in a more consolidated manner and may support the coordination of distributed energy resources, as well as the development of aggregation-based structures.

Consideration of Thermal Power Plants’ Technical Characteristics

The draft introduces provisions requiring bids for thermal power plants to take account of ramp-up and ramp-down curves. It also allows the system operator to issue dispatch instructions by considering the technical characteristics of such plants in greater detail. This approach may support system flexibility, particularly during periods of variability in renewable generation. However, the provision allowing instructions to be issued to thermal Settlement-Relevant Injection-Withdrawal Units (“UEVÇBs”) that are in operation by taking their load variation curves into account is subject to the transitional rule and applies as of 1 October 2026.

Introducing a Cap on the Difference between Bid Prices

Under the current framework, the relevant ratio may be determined by the Board; under the draft, it is set directly at 50%. Accordingly, the spread between the highest and lowest bid prices for each direction is capped at 50%. This amendment limits price dispersion and supports the formation of more predictable bid structures.

Expansion of the Scope of Emergency Instructions

The draft extends emergency instructions beyond generation facilities to include consumption facilities and stand-alone storage facilities. This change enables the system operator to intervene through adjustments in generation, consumption and storage behaviour where necessary to maintain system balance. This structure aligns with the demand-side considerations highlighted in the general rationale. The draft sets out coordination obligations between distribution companies, licensed organised industrial zones, industrial zones, incumbent suppliers and aggregators, and introduces an order of implementation for facilities with an electrical installed capacity of 900 kW or above, starting from the largest facility.

Stricter Monitoring of Compliance with Instructions

The provision added by the draft states that the criteria for reporting unfulfilled instructions in the balancing power market will be determined by a Board decision. This regulation introduces a more structured monitoring framework and supports a more consistent assessment of compliance.

Additional Consequences under the Invoicing Provisions

The amendment to Article 132/C extends the existing collection mechanism by introducing additional market restrictions where amounts notified by the Energy Market Regulatory Authority (“Authority”) are not paid within the prescribed period. In such cases, the Authority instructs the Market Operator to collect the relevant amount from the receivables of the respective legal entity, including advance and invoice receivables, which are transferred to the Authority’s account on the following business day.

In addition, the draft imposes market restrictions, including the prohibition on submitting seller-side bilateral agreement notifications, the cancellation of existing forward seller-side bilateral agreement notifications, and exclusion from aggregator portfolios and balance responsible groups. Where applicable, the relevant legal entity is removed from such structures or, if it is a party to a balance responsible group, the group is dissolved.

These measures remain in effect until the notified amount is fully collected, and such receivables are prioritised for collection.

Consideration of Thermal Power Plants’ Technical Characteristics

One of the notable amendments in the draft is the authority granted to the System Operator under Article 72 to issue instructions by considering the technical characteristics of thermal generation facilities. Under this provision, thermal units can be instructed by considering whether they are in cold reserve, warm reserve or hot reserve, as well as their ramp-up and load variation curves.

For units already in operation, the use of load variation curves will become effective as of 1 October 2026, in accordance with the relevant transitional provision (which refers to Article 73(3)(a), although the substantive rule appears to be set out under Article 72).

While dispatch instructions have traditionally been based primarily on submitted bids, the draft allows the System Operator to take technical constraints and capabilities more directly into account where necessary for system operation. In particular, the provision enabling non-operational thermal units with available capacity to receive instructions provides additional operational flexibility.

The regulation also allows, in certain circumstances, relevant units to be operated down to their minimum stable operating level. Accordingly, the System Operator may issue instructions for at least three hours and maintain such facilities at minimum stable levels where required, thereby ensuring faster response capability if system conditions change.

This approach, when considered together with the increasing share of variable renewable generation, supports the availability of flexible generation resources during periods of rapid change in supply conditions.

Assessment

The draft indicates a gradual move in the Turkish electricity market towards a more flexibility-oriented balancing approach. Through the regulation, storage facilities, consumption units, unlicensed generation portfolios and aggregators are more explicitly integrated into system operation. At the same time, the draft may support a more effective use of the technical capabilities of thermal power plants and may contribute to enhanced real-time system management.

For these reasons, the draft may be regarded as part of a broader transition towards a more flexibility-oriented market structure, rather than solely a set of isolated technical amendments.

 @Zeynep EMİROĞLU