• Turkey’s Connection with ENTSO-E And T-CAT Auction Systems
  • April 13, 2015 | Author: Safak Herdem
  • Law Firm: HERDEM Attorneys At Law - Istanbul Office
  • Turkey’s power system has been synchronized with the European interconnection grid in 2011 and the first international energy trading has been made in 2012. As being neighboring countries with Bulgaria and Greece, Turkey’s interconnection grid directly connected with those countries and the capacity assignment for auctions are only possible for these countries within the scope of ENTSO-E.
    The organizational structure of ENTSO-E is consisted of three main committees:

    - System Development Committee is responsible for TSOs cooperation with regard to network development, and adequacy & security planning of the transmission system;

    - System Operations Committee is responsible for technical operational cooperation of TSOs including implementation of rules and standards between different regions to deliver accurate and fast information system regarding the power system operation;

    - Market Committee is responsible for integrating the views of market participants and all stakeholders to facilitate the Internal Market Integration (IME) at a well-functioning European electricity market. This efficient market covers long-term, day-ahead, intra-day and balancing markets and system services;
    ENTSO-E sets the goal of ensuring a secure and qualified operation of European power transmission system by providing a balance of supply and demand. Other than that, it is conducting operations on the secured integration of renewable energy sources and follows EU’s main Energy Policies regarding securement of the environment. However, ENTSO-E’s purpose of establishment is to set-up an Internal Energy Market. ENTSO-E is achieving this goal by proposing and implementing standardized market integration and transparency frameworks of TSOs operations.
    One of the main duties of ENTO-E is to foresee the consumption, generation and demand capacities in order to sustain the power system adequacy and balance. The ENTSO-E System Adequacy Forecast (SAF) was developed after ETSO Power System Adequacy Report and UCTE System Adequacy Forecast Report released for the time period 2010-2025. SAF is an essential program also a milestone of ENTSO-E’s Ten-Year Network Development Plan (TYNDP) defined by the ENTSO-E Regulation.

    The SAF provides an overview of Generation adequacy analysis for the whole of ENTSO-E grid system; Generation adequacy assessment for each individual country based on national comments received from TSO’s data correspondents; Role of transmission capacities related to security of supply on a regional basis.

    ENTSO-E released a “Pilot Network Code” in order to harmonize the grid code necessities for all type of generators and connection of them to the transmission networks across Europe. This is a Guideline, necessary for code drafting on grid connection with special focus on wind generation. ENTSO-E and ERGEG (European Regulator’s Group for Electricity and Gas) worked together with support from the European Commission, acknowledging that wind energy is set to shoulder the greatest part of renewable energy growth over the next few years.

    Turkey’s Synchronization with ENTSO-E and Connection Procedures

    The New Import-Export Regulation indicates that the import and export operations shall be conducted by the state-owned authorized company and private companies possessing a supplying license. According to Old Regulation, Energy Market Regulatory Authority (the "EMRA")’s permission is required to commence export and import activities via interconnection transmission lines, however New Regulation allows companies to perform import/export activities without a special permission from EMRA. Relevantly, companies owning a supplying license under EMRA, shall legally permitted to participate in auctions for allocations in synchronous parallel interconnections. Licenses taken according to Old Regulation, will be replaced by EMRA without any additional fee and these license owner shall be able to join auctions with old licenses until the EMRA transforms the licenses according to New Regulation.

    Investors deciding to make cross-border energy trades through ENTSO-E must join the T-CAT Auction process that is operating under the Turkey’s transmission system operator: TEIAS.

    T-CAT Auctions

    As explained above, supplying license owners shall participate auctions to merchandise via interconnection lines between Turkey-Bulgaria or Greece. The auctions for capacity allocation are announced by Turkish Transmission System Operator (TEIAS) for monthly periods. TEIAS established a private auction platform only for license owners with a Grid Code named T-CAT. Within the scope of New Regulation, System Operators will submit the principles, procedure, terms and conditions of auctions to EMRA Board for These information still weren’t submitted to EMRA yet.

    First condition to participate auctions is to obtain a valid supplying license under the terms and conditions of EMRA. Companies having supplying licenses shall sign interconnection usage agreements with TEIAS and responsible for monthly System Usage Fee determined in TEIAS Regulation. Free Capacity shall be announced 5 days prior the day of the auction at 12.00 am. Unless otherwise agreed, monthly auction results will be announced in a day latest until 16.00 on T-CAT auction platform Participants should be ready to pay both interconnection capacity prices and transmission fees according to the legislations.

    Companies sign the auction documents and deposit a performance guarantee of 50,000 Euros. This fee is only for one direction, for instance if companies intend to both export and import electricity between Turkey-Bulgaria, they should deposit 100.000 Euros in total.

    Furthermore, they must obtain an electronic signature and an EIC (Grid) code from TEIAS and register themselves to Market Financial Settlement Center ("PMUM") which is the operation manager of T-CAT Market System. Wholesale companies fulfilling such conditions stipulated in the regulation are legally able to register T-CAT and be allowed to join capacity auctions. Since these import or export actions are bilateral transactions, both of the parties must be qualified as wholesale companies according their laws.