Altre stanze in Politiche Energetiche
Altri articoli della stanza Politiche Energetiche
Tariff design - Tolga Turan -
1. Electricity Market:
The market model targeted by the Law No: 4628 envisages a competitive structure where the prices are determined in line with the supply and demand conditions. Within that scope, it is envisaged that the sale of electricity is realized primarily through bilateral agreements. In the generation and wholesale sectors where a competitive market structure is possible, it is foreseen that the prices are determined freely among the parties.
It is envisaged by law that EMRA makes tariff regulation in order to encourage the effective operation of the legal persons operating in the fields where a competitive structure is not possible due to natural monopolistic qualifications and to prevent excessive returns. Retail tariffs applicable for non-eligible consumers and the wholesale tariffs to be applied by TETAS are also regulated tariffs. The tariffs regulated by EMRA are stated in the Law No: 4628 as follows;
Connection and use of system tariffs,
Transmission tariff,
TETAS wholesale tariff,
Distribution tariffs,
Retail tariffs applicable to non-eligible consumers.
The licensees subject to tariff regulation shall prepare and submit to the Authority for Board approval their tariff proposals that include the prices to be effective in the following year and the applicable procedures and principles as per the provisions of the applicable legislation by the end of October every year.
The examination and evaluation of the tariff proposals shall be completed by the Authority before December 31 of the current year. If the tariff proposal is deemed appropriate, the tariffs proposals shall be approved. The tariffs approved shall be effective for the tariff period between January 1 and December 31 of the following year. The tariff methodologies adopted by EMRA are shown in the table hereunder;
2. Natural Gas Market
The market model objected by the Law: 4646 envisages a competitive structure where the prices are determined in accordance with the supply and demand conditions. In this framework, it is envisaged that the natural gas sale is made basically through bilateral agreements. It is envisaged that in sectors where a competitive market structure is possible the prices are determined freely among the parties.
It is stated by law that EMRA makes tariff regulation in order to encourage the effective operation of the legal persons operating in the fields where a competitive structure is not possible due to natural monopolistic qualifications and to prevent excessive revenue. Retail tariffs applicable for non-eligible consumers are also regulated tariffs. The tariffs regulated by EMRA in the natural gas market are stated as follows in the Law no: 4646.
Connection tariffs,
Tariffs pertaining to the control of transmission and dispatch,
Storage tariff,
Wholesale tariff,
Retail tariff.
When making tariff regulation in the natural gas market, EMRA takes into consideration the principles of provision of adequate amount of natural gas of good quality to consumers, at low cost, and in a safe and reliable manner, and principles of non-discrimination and transparency.
The prices to be applied for the following period and the tariff proposals including the principles and procedures regarding the implementation of the tariff , together with the necessary information and documents are submitted to EMRA by the related license holders 90 days before the end the previous tariff period.
EMRA determines the tariffs taking into consideration the financial data of the related legal persons and the tariff proposals thereof and the tariffs are approved by the Board. The approved tariffs are implemented by the related legal persons throughout the new tariff period. The principles and limits of tariffs may be rearranged by EMRA within the tariff period considering the inflation and other factors. As seen in the below table, revenue cap for transmission tariffs and PRICE CAP for distribution tariffs are adopted as methodology. In addition, prices and tariffs regarding the storage activity are being determined by EMRA until the sufficient amount of storage capacity takes place within the country.
Another important issue to be mentioned about the tariffs is about the wholesale tariffs. With the Board Decision of EMRA dated 27.12.2007 and numbered 1439/2 the wholesale price implemented by BOTAS and other wholesale companies was set free for the year 2008. Then, for the purpose of eliminating the troubles in the financial structure of BOTAS, it was decided to arrange the prices of BOTAŞ within the framework of Automatic Pricing Mechanism with a decision of High Planning Council. After that decision, as a result of the studies of the Under- secretariat for Treasury it was envisaged that the wholesale price of BOTAS is determined by Under-secretariat for Treasury, High Planning Council and BOTAS and such price is updated by Automatic Pricing Mechanism. The Board continued the implementation of determining the wholesale tariffs freely among the parties by the decisions taken after 2008. The continuation of such implementation was adopted for 2012 by the Board Decision dated 22.12.2011 and numbered 3577.
The final issue to be mentioned about the natural gas tariffs is that; the tariffs which were determined by tenders (applicable for eight years) of the legal persons entitled to perform natural gas distribution within their respective regions comes to an end gradually and had to be replaced by a new tariff methodology. Regulation to this end has been introduced by EMRA at the end of 2011 and “Regulation on the Principles and Procedures for Tariff Calculation” was published in the Official Gazette and the ambiguity in some market players’ minds was eliminated.
3. Oil and LPG Markets:
It is adopted as a general principle by the Law no: 5015 that the prices in the petroleum trade are formed according to the nearest accessible world liberal market conditions. Prices pertaining to the market activities conducted within the scope of refining undertaking and distributor license are notified to the Authority as PRICE CAPs taking into consideration the formations in the nearest accessible liberal world market.
Regarding the goods and/or services supplied in the petroleum market, the principle of tariff is applied for the activities within the scope of transmission, storage, refining undertaking and distribution licenses. Price list is applied for the activities within the scope of the processing license. Price notification is applied for the activities within the scope of the retailer (with station) licenses.
Besides, EMRA may decide on the implementation of one of the principles of tariff, price list or price notification for all or a part of the activities within the scope of transportation, bunker delivery, naphtha and retail (without station) licenses. Similarly, EMRA may decide on the exemption of price list principle or implementation of price notification for all or some of the activities within the scope of processing licenses.
Prices in the petroleum market are basically determined freely among the parties. However, in some cases, EMRA’s approval is obligatory in terms of notification and effectiveness of the notified prices.
Although the general rules are such, the Law no: 5015 adopts an exceptional case and entitles the Authority to directly intervene with the prices under certain conditions and for limited periods. Accordingly, in case agreements or actions aiming to or possible to hinder, violate or strain the activities or competition in the petroleum market cause effects violating the market structure, together with the commencement of the necessary procedures, EMRA is entitled by Law to take any measures and determine the base price and/or PRICE CAP to be implemented on regional or national level for each phase of the activities not exceeding two month on each time.
Similarly, it is adopted by the Law no: 5307 that the prices in the LPG market are formed according to the accessible liberal world market conditions. Accordingly, refining undertakings and distributors are liable to notify EMRA of their prices regarding their licensed activities as PRICE CAPs by taking into consideration the price formations in the accessible liberal world markets. The authority of EMRA to directly intervene with the prices under certain conditions and with limited periods is applicable also to the LPG market.
4. Renewable Energy
As mentioned earlier, the support mechanism put into effect by the Law No: 5346 includes a differentiated tariff support system for different renewable energy resources. Such tariff support is taken under guarantee by law in terms of US-cent and per KWh electricity generated. Basically, in addition to the guaranteed tariff countervailing the electricity generated, in case the equipment used in the establishment of the generation facilities based on renewable energy resources are domestically produced, some additional tariff supports are provided to the RES certificate holding generators. Data pertaining to the basic and additional tariff support are shown in the table hereunder;
