Insights

With the Law No. 7257 Amending the Electricity Market Law and Some Laws (“Law”), which was published in the Official Gazette dated December 2, 2020 and numbered 31322, fundamental changes were made to the energy regulations.

Although the amendments brought by the Law are especially related to natural gas, electricity, mining and renewable energy fields, these changes may affect the whole sector.

The important changes made by the Law are listed below:

• “Organized Wholesale Natural Gas Sales Market” definition has been added to the Natural Gas Market Law, and amendments have been made to expand the use of natural gas throughout the country. Some transfers carried out in accordance with the Natural Gas Market Law are exempted from VAT.
• Last resort supplier mechanism has been introduced to provide gas supply to consumers who cannot obtain natural gas for various reasons, and EMRA has been authorized to determine the last resort tariffs and last resort suppliers.
• In order to eliminate natural gas outages and cuts and to ensure system and supply security, a regulation has been introduced to exempt all kinds of natural gas purchases by BOTAŞ from the scope of the Public Procurement Law.
• With regard to renewable energy, a regulation was introduced to determine the cost of RES in Turkish liras.
• Incentives and amenities were provided for renewable energy facilities established to provide one’s own electricity.
• Amendments were introduced regarding the repayment of the investment made in the electricity distribution network. In this context, the payback period previously determined as 10 years for generation and consumption facilities has been reduced to 5 years.
• In the electricity market, various regulations have been made regarding connection tariffs and connection fees, real estate procurement in production activities, price equalization mechanism, and general lighting expenses.
• Regarding the Mining Law, many amendments have been introduced in terms of the documents required for licensing, the license fee and the conditions for the extension of the licenses.
• In terms of geothermal resources, the share of the administration to be collected in 2020 from spa and thermal hotels operating for tourism purposes has been postponed until December 20, 2021, without the need for an application.

The law enters into force on the date of its publication.

• You may find the full text of the Law here.