AMENDMENTS TO THE LEGISLATION REGARDING RENEWABLE ENERGY RESOURCE AREAS BY LAW NO. 7226admin
The Law No. 7226 (“Amendment”), which included numerous legislative amendments in many laws, which was accepted at the Turkish Parliament on 25.03.2020, was published in the Official Gazette dated 26.03.2020 and numbered 31080.
Through this Law, some amendments were also introduced in the Law on the Use of Renewable Energy Resources for the Generation of Electrical Energy No. 5346 (the “Renewable Energy Law”). In this article, these amendments will be briefly discussed.
Consolidation of the Repeating Regulations Regarding Renewable Energy Resource Areas
The matters that constitute the legal basis of the regulations regarding “renewable energy resource areas” were regulated both in the Renewable Energy Law and in paragraph 12 and 13 of Article 5 of the Electricity Market Law (EML) No. 6446. Through the Law No. 7226, the provisions regarding determination, protection, and usage of the renewable energy resources areas and the provisions of expropriation in the EML were abolished and consolidated to the Article 4 of the Renewable Energy Law.
In this framework, with the amendment, repeating regulations regarding renewable energy resource areas are combined in a single law article. The matters stipulated in paragraphs 12 and 13 of Article 5 of the EML were moved to Article 4 of the Renewable Energy Law and the repetition problem was resolved. The paragraph 12 and 13 of Article 5 of the EML have been repealed due to the amendment and a clause that references made to these paragraphs are deemed to have been made to Article 4 of EML is also introduced.
Making the Tenders of Renewable Energy Resource Areas over Turkish Lira
Through Law No. 7226, the Ministry of Energy and Natural Resources (”Ministry”) has been given new and broad powers to accelerate renewable energy investments. Through this amendment, the following provisions were added to the 4th article of the Law:
“… The lowest price to be offered at the ceiling price to be determined in Turkish lira by the Ministry for the generation facilities to be established in the renewable energy resource areas is applied within the scope of the RER Support Mechanism for the period to be determined in the competition conditions for the said renewable energy resource area.”
Through this amendment, the ceiling price application will be made on TL basis in renewable energy resource areas tender. According to the previous regulation, while the lowest price to be offered at the ceiling price to be determined by the Ministry according to the table (I) and (II) attached to the EML, for the period to be determined in the competition conditions for that renewable energy resource area; with the addition the paragraph 2 of Article 4 of the Law, from now on, the competitions for renewable energy resource areas will now be carried out through the ceiling price application to be determined by the Ministry in TL, regardless of the tables attached to the EML. Therefore, the Ministry will not be subject to any legal restrictions when setting or updating the ceiling price.
From now on, purchase price guarantees to be given to renewable energy investments will now be given in TL instead of foreign currency. While the ceiling prices to be applied in the current tenders will be calculated according to the limits in the tables attached to the EML, there will be no limitation for the Ministry and the Ministry has discretionary power in updating both the ceiling prices and the prices formed in the tenders.
Announcement of the Allocation of Renewable Energy Resource Areas to the Land Registry
With the amendment, the following provisions are added to Article 4 of the Renewable Energy Law:
“The Ministry creates renewable energy resource areas by choosing the location of public and Treasury immovable properties and private properties subject to the purpose of using the renewable energy resources effectively and efficiently, and realizing the investments rapidly with the allocation of these areas and connection capacities to investors. This issue is annotated to the Land Registry. As per the Article 10 of the Expropriation Law dated 4/11/1983 and numbered 2942, within three years from the date of the annotation, the document to be obtained from the court regarding the request for registration on behalf of the Treasury upon the determination of the expropriation value is deleted from the Registry officially. Development plans that impress the use and efficiency of renewable energy resource areas cannot be regulated. The designated renewable energy resource areas are notified to the relevant authorities by the Ministry for inclusion in the zoning plans.”
Through this arrangement, it has been decided to annotate the renewable resources created to the Land Registry. Within three years from this annotation, according to Article 10 of the Expropriation Law No. 2942, if the document to be obtained from the court, indicating that the request for registration on behalf of the Treasury with the determination of the expropriation value, was not submitted, this annotation will be deleted officially from the Registry.
With the amendment to paragraph 1 and 2 of article 4 of the Renewable Energy Law, “the determination of renewable energy resource areas for electricity generation by taking the opinion of the relevant institutions and organizations” is envisaged.
Through this new arrangement, the Ministry will decide to create renewable energy resource areas on public and treasury properties and the immovable subject to private property, by taking the opinions of the relevant institutions and organizations.
Principles and Procedures Regarding Tariffs and Other Income Applied to Support Electricity Generation from Renewable Energy Resources
With the amendment, a new paragraph has been added to Article 6 of the Renewable Energy Law, and accordingly, the principles and procedures regarding the assessment of other revenues within the scope of the RER Support Mechanism will be determined by the regulation to be issued by Energy Market Regulatory Authority.