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Source-based support fee collection and distribution mechanism

The Energy Market Regulatory Authority of Turkey (“EMRA”) recently introduced a source-based support fee collection and distribution mechanism (“Support Mechanism”), applicable to licensed electricity generation market participants, which are (i) not benefitting from renewable energy resources support mechanism (YEKDEM); and (ii) not in the portfolio of EÜAŞ. The Support Mechanism will enter into force on 1 April 2022.

With the significant increases in commodity prices in local and international markets, the chasm between the costs of different electricity generation sources has been deepened. To avoid further increases in the electricity prices, similar to other jurisdictions, EMRA decided to take some measures with the authority granted to it through the recent amendments to the Electricity Market Law.

EMRA in its decision, the Rules and Procedures on the Determination and Implications of the Source-Based Support Fee dated 17 March 2022 and numbered 10866 (“Support Fee Decision”) introduced the concept of source-based support fee. This fee is envisaged to be collected from low-cost electricity generation sources, such as wind and solar power plants and distributed to high-cost electricity generation sources, such as lignite fired plants and natural gas power plants.  

Under the Support Fee Decision, the source-based support fee is calculated for each settlement period as per a formula, principally based on the source-based maximum settlement price, market clearing price and electricity generation amount of the relevant facility. The source-based maximum settlement prices are also determined by EMRA for each settlement period as per the source-based electricity generation costs. Further rules and procedures are expected to be published by EMRA within the upcoming ten days detailing the determination of the source-based maximum settlement prices and electricity generation costs.

As per the Support Fee Decision, the market participants operating generation facilities with lower costs, are also obliged to provide securities for the payment of the support fee.

For further information please contact:

Zeynel Tunç | Partner

Bengü Coşkun | Senior Associate


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Tunç Fırat Dereli

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