Turkey: the rise of utility-scale energy storage technologies
Mehmet Feridun İzgi
Balcıoğlu Selçuk Ardıyok Keki, Istanbul
Miray Tezcan
Balcıoğlu Selçuk Ardıyok Keki, Istanbul
Introduction
Turkey is in step with the global shift towards renewable energy, shaping its future energy plans around sustainability. Recognising the significance of storing energy from sustainable sources, the Regulation on Storage Activities in the Electricity Market (RSAEM), effective since 9 May 2021, outlines the principles governing storage activities. Subsequent legislative changes aim at promoting investments in energy storage projects, creating a framework for licensing and regulating energy storage systems, supporting companies in this sector, and identifying storage needs while determining the most suitable solutions for integration into the country’s energy system.
Moreover, there have been significant investments in battery technologies, specifically targeting the storage and the effective use of energy from volatile sources such as wind and solar power. Various projects are underway to integrate energy storage systems into smart grid infrastructure. These initiatives collectively represent crucial strides in fortifying the country’s energy infrastructure and meeting the challenges of future energy demands.
Legislative development of storage activities in Turkish law
The first legal provision on storage activities in Turkish law was introduced with the subparagraph (e) added to Article 14 of the Electricity Market Law No 6,446 (EML) with the amendment dated 21 March 2018.[1] With the relevant amendment, storage activities have been regulated as an activity which can generally be conducted without a licence. An incentivising legal provision has been implemented to promote the widespread establishment of storage facilities.
On 9 May 2021, the RSAEM, which sets the main framework for storage activities, came into force. It defines four different storage facilities:
- Electricity storage unit integrated to the generation facility – the storage unit that legal entities holding generation licences may install for licensed electricity generation facilities, not exceeding the installed capacity determined on behalf of the generation facility.
- Electricity storage facility integrated into the consumption facility – an electricity storage facility which can be installed by consumers if they meet the following conditions: (1) an appropriate connection opinion is given by the relevant grid operator; (2) its installed capacity does not exceed the contractual capacity of the relevant consumption facility in the connection agreement; and (3) it is located at the same measurement point.
- Detached electricity storage facility – an electricity storage facility that can be established provided that it has a supply licence and its installed capacity is not less than two MW.
- Electricity storage facilities to be established by grid operators – electricity storage facilities to be established by distribution companies with the approval of the Board, if they prove that they are more economical than new network investments through cost-benefit analysis and by including them in their investment plans.[2]
Electricity storage facilities can be established in different ways depending on the licence types of legal entities operating in the electricity market. Storage facilities with a maximum installed capacity of 1 MW can also be established by technology development zones and industrial zones for use in their R&D activities.
After the RSAEM came in force in 2021, regulating the main framework of storage activity, a significant amendment was made to storage activities, which was introduced in July 2022,[3] with paragraph (10) being added to Article 7 of the EML by Article 56 of the relevant Law:
‘Legal entities that undertake to establish an electricity storage facility are granted a preliminary licence by the Authority (EMRA) for the establishment of an electricity generation facility based on wind and/or solar energy up to the installed capacity of the electricity storage facility they undertake to establish.’
This article serves as an incentive for investors aiming to set up storage facilities, as the standard procedure for establishing a generation facility in Turkey typically requires obtaining a licence. One notable simplification introduced by this amendment is the removal of the competition procedure for determining applicants connected to the system when there are more applications than the announced capacity for a specific connection zone in pre-licence applications for wind or solar energy-based generation facilities. From now on, applicants in pre-licence applications for such facilities can secure pre-licences up to the capacity of the committed storage facility they plan to build, if they include a storage facility in their plans. This adjustment streamlines the process and encourages the integration of storage solutions in renewable energy projects.
In order to determine the legal basis of storage activity, various amendments have been made to the following regulations: the Electricity Market Licence Regulation; the Electricity Market Connection and System Utilisation Regulation; the Electricity Market Balancing and Settlement Regulation; RSAEM; the Electricity Grid Regulation; and Regulation on Certification and Support of Renewable Energy Resources. These amendments were published in the Official Gazette of 19 November 2022 and numbered 32,018. The important changes made in terms of storage activities can be listed as follows: (1) electricity storage facility is defined as a facility which can store electrical energy by converting it into another type of energy and convert the stored energy back into electrical energy for use; (2) electricity storage facilities can be established in unlicensed electricity generation facilities which receive a call letter within the scope of Regulation on the Unlicensed Electricity Generation in Electricity Market and monthly offsetting is made for surplus energy.
Under the new legislation, the conditions for obtaining a pre-licence with a commitment to establish an electricity storage facility are briefly defined as: (1) the ratio of the electrical installed capacity of the electricity generation facility to the installed capacity of the electrical storage unit committed to be installed should be maximum 1; (2) the installed capacity should be 20 MWe for wind energy, minimum ten MWe and maximum 250 MWe for solar energy based applications; and (3) the committed electricity storage unit should be within the boundaries of the power station site subject to the application.
It can be noted that the aim of the amendments is to expand the installation of storage facilities. It is also significant that the installed capacity of the storage facility should be proportional to the installed capacity of the generation facility.
However, under an amendment which came into force on the same date, it has been accepted that the sale of energy stored in the storage facility established by legal entities that have been granted a pre-licence in return for a storage facility commitment will also be considered within the scope of YEKDEM. This is an incentive system established to support and encourage Turkey’s renewable energy producers. The amendment should be interpreted as a type of incentive provided by the state to investors to establish storage facilities.
Current investments in storage activities
With the steps taken to shape storage legislation, significant investments have started to be made in Turkey for the establishment of storage facilities. The support and incentives provided within the scope of regulatory arrangements offer energy investors significant opportunities to develop their projects for establishing such facilities. Accordingly, many projects such as battery facilities, large-scale storage facilities, and production facilities integrated with storage facilities are being realised by investors.
In 2018, Turkey’s first large-scale battery plant was established in Manisa, integrated with a wind power station. During the following year, Turkey’s first grid-connected solar energy and storage facility came into operation in Konya, showcasing simultaneous solar energy generation and battery storage. A ground-breaking Lithium-Ion energy storage facility is planned for Silivri, Istanbul, with a connection capacity of 250 MW and a total energy storage capacity of 1000 MW-hours – one of the few worldwide.
Turkey is actively engaged in projects relateing to energy storage technology, specifically focusing on smart grids and batteries. Aligned with the Turkey Smart Grids 2023 Vision and Strategy Determination Project, developed by the Electricity Distribution Services Association in collaboration with the Energy Market Regulatory Authority, Turkey aims to realise its smart grid ambitions by 2035. The inaugural initiative under this goal is the Smart Grid Pilot Project, Turkey’s first such initiative. The project focuses on enhancing grid management through the integration of smart sensors and communication technologies into energy grids.
Conclusion
Depleting fossil fuel reserves and their environmental impact, notably on climate change, have globally spurred a shift towards increased reliance on renewable energy. However, the intermittent nature of renewable energy poses challenges in balancing production and supply, affecting overall energy efficiency. Consequently, energy storage has become a vital global focus, including in Turkey, which has substantial potential in renewable energy.
Turkey has strategically developed broad policies and implemented legislative measures to enhance the efficiency and sustainability of renewable energy. Recent legislative amendments have not only encouraged investors to establish storage facilities but also provided specific legislation and incentives, fostering the realisation of numerous storage facility projects in Turkey in recent years. These initiatives demonstrate a commitment to addressing energy challenges and advancing sustainability in the renewable energy sector.
Turkey is aligning with the global trend of grid-scale storage and smart grid applications in energy storage technology. Several projects are planned, leveraging Turkey’s advantageous position in renewable energy resources. In the near future, Turkey is expected to store produced energy efficiently, taking significant steps toward widespread clean energy use in accordance with adopted policies.
Notes
[1] The relevant regulation was introduced by Art 84 of Law No 7,103 on the Amendment of Tax Laws and Certain Laws and Decree Laws published in the Official Gazette, 27 March 2018 and numbered 30,373.
[2] This type of storage facility was included in the RSAEM with the Regulation Amending the Regulation on Storage Activities in the Electricity Market, which came into force after being published in the Official Gazette, 19 November 2022 and numbered 32,018.
[3] The relevant regulation came into force with the Law on the Amendment of the Civil Servants Law, Certain Laws and the Decree Law No 375, published in the Official Gazette, 5 July 2022 and numbered 31,887.