Unlicensed Renewable Energy Generation: A Review of Regulation and Applications in the Context of Turkey

Abstract

Turkey has stipulated that renewable energy sources (RES) will have at least 30% share in electricity generation by 2023. To reach this target, a renewable energy promotion law (Law No. 5346) was enacted in 2005 and later amended in 2011. Through Law No. 5346, Turkey has launched a feed-in tariff (FIT) for RES-based electricity with additional premium for the use of local equipment. The FIT is guaranteed for 10 years from the date of operation and valid only for RES power plants commissioned between the 18th May, 2005 and the 31th of December 2020. In addition, RES power plants with a capacity of up to 1 MW are exempted from licensing and establishing legal entities. There is an increasing demand to install unlicensed RES generators, mostly solar power plants, all over the country. At least one consumption unit must be associated with an unlicensed power plant. Excess generation from unlicensed RES power plants is automatically priced at the FIT for 10 years. Except for the FIT mechanism, unlicensed generators have no options to sell unconsumed electricity in the electricity market. The main difficulties lie in limited connection possibilities, the selection of plant locations, and coordination among relevant authorities. Moreover, an awareness campaign would help people to better understand the related regulation and applications. Keywords: Unlicensed generation; distributed generation; electricity market; Turkey JEL Classifications: L5; Q40; Q43; Q48; Q49