Skip to main content
SpringerLink
Log in

Regulatory Reform and Competition in the Turkish Electricity Industry

  • Chapter
  • First Online:
Reforming Turkish Energy Markets

Abstract

The growth of electricity demand in Turkey has historically been high, growing at an average rate of about 7% per year between 1990 and 2010. As seen, there have been a number of years with exceptionally low growth, namely 1999, the year of a devastating earthquake, and the years 1994, 2001, and 2008–2009, which were years of severe economic crises.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Autoproducers are established primarily to consume the electricity they generate by themselves. According to the Energy Market Law, they have the right to sell 20% of the electricity they produce to the market. Under exceptional circumstances the Board of the regulatory authority may increase this ratio. The ratio has been set at 40% by the Board in December 2011. However, any sale in excess of the ratio set by the Board would require a generator’s license. An autoproducer group is similar, except that it generates electricity not only for itself but for its affiliates. In what follows the term autoproducer will be used to refer to both autoproducers and autoproducer groups.

  2. 2.

    EÜAŞ affiliated partnerships are companies where EÜAŞ’ ownership share is above 50%.

  3. 3.

    The term “non-technical losses” most often refers to theft of electricity. Hence “theft” and “non-technical losses” will be used interchangeably. The term “losses”, when used alone, refers to the sum of technical and non-technical losses.

  4. 4.

    As of December 2011, TEİAŞ loss data for 2010 were not available.

  5. 5.

    The provincial composition of regional distribution companies is provided in Table 2.7 below.

  6. 6.

    The only exceptions were municipally-owned transmission and distribution facilities and three regional concession companies. The municipal facilities later came under TEK’s control in 1982.

  7. 7.

    For the various constitutional and legal problems with private participation in the electricity industry in Turkey see Gülen (1998); Bilgiç et al. (1999); Çetin and Oğuz (2007); Ulusoy and Oğuz (2007) and Atiyas and Oder (2007).

  8. 8.

    For reviews of the regulatory environment in electricity see Atiyas and Dutz (2005); Güney (2006); Atiyas (2006); Hepbaşlı (2005); Erdoğdu (2007); Ulusoy and Oğuz (2007).

  9. 9.

    It seems the California crisis played a role in this choice as well. The California model also had an exchange similar to the Pool, and there were strong indications that exercise of market power played a significant role in the development of the crisis.

  10. 10.

    There were academics and experts in the UK who were not uncritical of the transition from Pool to NETA. See for example, Helm (2003) and Newbery (2005).

  11. 11.

    As of December 2011, 14 regions have been defined for the purposes of transmission system use prices.

  12. 12.

    Decision No. 2004/3 of the High Planning Council, Official Gazette 17.3.2004.

  13. 13.

    According to Price Waterhouse Coopers (2008) “Metering and billing problems coupled with loss & theft ratios much higher than the OECD median constituted the main imperatives behind the policy decision to grant a priority to the distribution segment” (p 17).

  14. 14.

    The following is drawn from Privatization Authority (2009).

  15. 15.

    Through Law No. 5496, Article 6.

  16. 16.

    As per Law No. 5784 enacted in 2008.

  17. 17.

    Article 6 of Law No. 5496 enacted in 2006, adding provisional article 9 to the EML.

  18. 18.

    The teaser for the privatization prepared by the Privatization Authority (2009) argued that “at each distribution company, substantial operational efficiency improvement is achievable through optimizing core business processes, such as billing and collections, arranging and redesigning work flows, enabling effective coordination between divisions, improving information systems, and infrastructure and optimizing personnel productivity.”

  19. 19.

    It turns out the bids of the top three bidders are not that far apart, except for Bedaş, where the two top bids (1.813 and 1.812 billion USD, respectively) were substantially higher than the third and fourth highest bids (1.459 and 1.321 billion USD, respectively).

  20. 20.

    In reference to data presented in Fig. 2.7, note, again, that the privatization process for Boğaziçi, Trakya, Dicle, Ayedaş, Toroslar, Akdeniz, Vangölü have not been completed and the data may change.

  21. 21.

    Many of these plants are small auto-producers; there were some IPP and BO plants as well. Plants that were of more significant size were gas-fired and there was one plant based on imported coal.

  22. 22.

    The daily Referans, 21.9.2007.

  23. 23.

    High Planning Council Decision No. 2008/T-5 dated 14.2.2008.

  24. 24.

    IEA (2011), pp 335 and 336.

  25. 25.

    Directive 2009/72/EC 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC.

  26. 26.

    See European Commission (2010) for an extensive discussion and clarification.

  27. 27.

    Law No. 5398, July 2005. An important restriction imposed on the distribution company was that the price of the electricity purchased from its subsidiary or affiliated companies could not be higher than the country average wholesale electricity price. This price is determined by EPDK and has been set equal to the average price established in the day-ahead market.

  28. 28.

    See Atiyas (2009) for a discussion.

  29. 29.

    Competition Authority (2005). Competition Authority (n.d.) provides the internal report that provided the basis for the Board Decision.

  30. 30.

    Law No. 5784 of July 2008.

  31. 31.

    See Kölmek (2011) for a discussion.

  32. 32.

    See, for example, Borenstein and Bushnell (2000); OECD (2003); Garcia and Reitzes (2007) and Wolak (2005).

  33. 33.

    The Sector Inquiry of the European Commission (2007) states: “Regulated retail tariffs can have highly distortive effects and in certain cases pre-empt the creation of liberalised markets”(p 14).

  34. 34.

    A Decree with the Force of Law is basically a law that is enacted by the Council of Ministers rather than the Parliament. Such decrees are based on “authorizing laws” which have been enacted by the Parliament.

  35. 35.

    See, for example, Amundsen and Bergman (2006).

References

  • Amundsen, Eirik S. and Lars Bergman (2006). “Why Has the Nordic Electricity Market Worked So Well?” Utilities Policy, 14 (3), 148–157.

    Google Scholar 

  • Atiyas, Izak (2009) “Recent Privatization Experience of Turkey – A Reappraisal”, in Ziya Öniş and Fikret Şenses (Eds.) Turkey and the Global Economy: Neo-Liberal Restructuring and Integration in the Post-Crisis Era, New York: Routledge, 101–122.

    Google Scholar 

  • Atiyas, Izak. (2006). Elektrik Sektöründe Serbestleşme ve Düzenleyici Reform, Istanbul: Tesev Publication, http://www.tesev.org.tr/UD_OBJS/PDF/IYIYNTSM/elektrik%20Sektorunde%20Serbestlesme%20ve%20Duzenleyici%20Reform.pdf accessed December 16, 2011.

  • Atiyas, Izak and Mark Dutz (2005). “Competition and Regulatory Reform in Turkey’s Electricity Industry”, B. Hoekman ve S. Togan Turkey: Economic Reform and Accession to the European Union, The World Bank and CEPR.

    Google Scholar 

  • Atiyas, Izak and Jorge N. Ferer (2007). “Electricity” in S. Ülgen (ed.) Second Generation Structural Reforms: De-Regulation and Competition in Infrastructure Industries - The Evolution of the Turkish Telecommunications, Energy and Transport Sectors in Light of EU Harmonisation, CEPS Special Reports, http://www.ceps.be/ceps/download/1416 accessed December 16, 2011.

  • Atiyas, İzak and Burak Oder (2007). Özelleştirmenin Hukuk ve Ekonomisi, Ankara:TEPAV, http://www.tepav.org.tr/upload/files/1271234172r8289.Turkiye___de_Ozellestirmenin_Hukuk_ve_Ekonomisi.pdf accessed December 16, 2011.

  • Bagdadioğlu, N., Başaran A. and C. W. Price (2007) “Potential Impact of Electricity Reforms on Turkish Households” ESRC Centre for Competition Policy and Norwich Business School, University of East Anglia CCP Working Paper 07-8.

    Google Scholar 

  • Borenstein, Severin ve James Bushnell (2000) “Electricity Restructuring: Deregulation or Re-regulation?”, Regulation, 23(2), 2000, 46–53.

    Google Scholar 

  • Camadan, E. (2011). “Why 2012 Will Be So Important for the Restructured Turkish Electricity Market” The Electricity Journal, 24 (10) 70–78.

    Google Scholar 

  • Çetin, Tamer and Fuat Oğuz (2007), “The Politics of Regulation in the Turkish Electricity Market” Energy Policy 35, 1761–1770.

    Google Scholar 

  • Çakarel, E. and J. C. House (2005) “IPP Investment in Turkey’s Electric Power Industry” Prepared specifically for distribution at a PESD Seminar: “The Experience of Independent Power Producers in Developing Countries” Stanford University, June 2-3, 2005, http://iis-db.stanford.edu/docs/59/Turkey.pdf, accessed December 16, 2011.

  • Competition Authority (nd) Türkiye Elektrik Dağitim A.Ş.’nin Özelleştirilmesi Hakkında 1998/4 Sayılı Rekabet Kurulu Tebliği Çerçevesinde Hazırlanan Rekabet Kurumu 1. Daire Görüşü, Ankara. http://www.rekabet.gov.tr/word/gorus/tedasson.doc accessed December 16, 2011.

  • Competition Authority (2005). “Türkiye Elektrik Dağitim A.Ş.’nin Özelleştirilmesine İlişkin Rekabet Kurulu Görüşü”, Ankara. http://www.rekabet.gov.tr/word/gorus/tedasgorus.doc accessed December 10, 2011.

  • Deloitte (2010). Turkish Electricity Market – Developments and Expectations 2010-2011, Istanbul. http://www.deloitte.com/assets/Dcom-Turkey/Local%20Assets/Documents/turkey-en_er_ElektrikEPiyasasi2010_221010.pdf accessed December 20, 2011.

  • Deloitte (2009) “Dengeleme ve Uzlaştırma Yönetmeliği Nihai Dönem Düzenlemeleri” presentation, mimeo.

    Google Scholar 

  • ERGEG (2007) “End-user energy price regulation: An ERGEG Position Paper” Ref: E07-CPR-10-03, http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_PAPERS/Customers/2007/E07-CPR-10-03_E-UPriceReg_0.pdf accessed December 20, 2011.

  • EPDK (2010). Electricity Market Report, Ankara. http://www.emra.gov.tr/documents/10615/b8ff3b3a-8853-45ad-8bdd-00428c1857a8 accessed December 20, 2011.

  • EPDK (2010a). 2010 Yılı Faaliyet Raporu, Ankara. http://www.epdk.gov.tr/documents/10157/34e34f7c-9a18-43ae-a322-c85547239d35 accessed December 20, 2011.

  • Erdoğdu, Erkan (2007) “Regulatory reform in Turkish energy industry: An analysis” Energy Policy 35 984–993.

    Google Scholar 

  • European Commission (2010). Interpretative Note on Directive 2009/72/EC Concerning Common Rules For The Internal Market In Electricity And Directive 2009/73/EC Concerning Common Rules For The Internal Market In Natural Gas - The Unbundling Regime, Commission Staff Working Paper, Brussels 22 January 2010.

    Google Scholar 

  • European Commission (2010b). 2009-2010 Report on Progress in Creating the Internal Gas and Electricity Market, Technical Annex. Commission Staff Working Paper. Brussels, 9 June 2010.

    Google Scholar 

  • European Commission (2007) Communication from the Commission, “Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report)”, COM/2006/0851 final, Brussels, 10 January 2007.

    Google Scholar 

  • Garcia, Jose A. and James D. Reitzes (2007). “International Perspectives on Electricity Market Monitoring and Market Power Mitigation” Review of Network Economics, 6 (3) 397-424.

    Google Scholar 

  • Gülen, S. Gürcan (1998). “Electricity in Turkey; A Legal Battleground in an Ongoing Privatization War.” Power Economics (December 31, 1998).

    Google Scholar 

  • Bilgiç, Haluk, Derman, Özgür and Gürcan Gülen (1999) “Review of Legal Battleground in Turkey’s Power Privatization War.” Utilities Law Review.

    Google Scholar 

  • Güney, Serhat (2006) “Restructuring, Competition and Regulation in the Turkish Electricity Industry”, TEPAV 2006 http://www.tepav.org.tr/tur/admin/dosyabul/upload/Restructuring.pdf.

  • Helm, Dieter (2003). Energy, the State and the Market: British Energy Policy since 1979. Oxford: Oxford University Press.

    Google Scholar 

  • Hepbaşlı, Arif (2005) “Development and Restructuring of Turkey's Electricity Sector: A Review” Renewable and Sustainable Energy Reviews, 9, 311–343.

    Google Scholar 

  • International Energy Agency (2011) Energy Prices and Taxes, Third Quarter 2011.

    Google Scholar 

  • International Energy Agency (2001). Energy Policies of IEA Countries – Turkey 2001 Review, Paris: IEA.

    Google Scholar 

  • Joskow, Paul (2000). “Why Do We Need Electricity Retailers? Or Can You Get It Cheaper Wholesale?” http://econ-www.mit.edu/files/1127 accessed December 15, 2011.

  • Joskow, Paul L. (2008). “Lessons Learned From Electricity Market Liberalization” The Energy Journal, Special Issue on the Future of Electricity, pp. 9–42, 2008.

    Google Scholar 

  • Kayabaş, Çetin and Ercüment Camadan (2011).”2011-2015 Dönemi Elektrik Dağıtım Tarifeleri”, Enerji Piyasası Bülteni, No. 16, 4-10.

    Google Scholar 

  • Kölmek, Fatih (2011). “Gün Öncesi Piyasası ve Bölgesel Fiyatlandırma”Enerji Piyasası Bülteni, No. 16, 34-38.

    Google Scholar 

  • Kurna, İbrahim (2011). “Türkiye’de Enerji Sektöründe Özelleştirme” presentation at the ICCI 2011 Conference, http://www.icci.com.tr/dosya/2011sunumlar/O14_Ibrahim_Kurna.pdf.

  • Littlechild, Stephen (2010) “Why we need electricity retailers: A reply to Joskow on wholesale spot price pass-through” http://www.econ.cam.ac.uk/dae/repec/cam/pdf/WP0008.PDF accessed December 16, 2001.

  • Newbery, David M. (2005) “Electricity liberalization in Britain: The quest for a satisfactory wholesale market design” The Energy Journal, 26, Special Issue, 43-70.

    Google Scholar 

  • OECD (2003). “Competition Issues in the Electricity Sector”, DAFFE/COMP(2003)14, Paris: OECD.

    Google Scholar 

  • Ongün, A. (2011) “Gün Öncesi Piyasası”, presentation. http://enerjienstitusu.com/arsivler/Kasim2011_Gun%20Oncesi%20Piyasasi%20-%20Abdulkadir%20Ongun.pdf accessed December 16, 2011.

  • Özel, Işık and İzak Atiyas (2011). “Regulatory Diffusion in Turkey: A Cross-sectoral Assessment” in Tamer Çetin and Fuat Oğuz (eds.) Political Economy of Regulation in Turkey, New York: Springer, 51–74.

    Google Scholar 

  • Price Waterhouse Coopers (2008) “Privatization of the Turkish Electricity Distribution Companies” http://www.pwc.com/tr_TR/tr/assets/ins-sol/publ/privitization.pdf accessed December 16, 2011.

  • Privatization Authority (2009). “Teaser - Privatization of Turkey’s Electricity Distribution Industry”, http://www.oib.gov.tr/2009/dosyalar/TEDAS%20Teaser%20Ingilizce%20v05-comments%20removed.pdf accessed December 16, 2011.

  • Sevaioğlu, Osman (2007). “Subsidizing Electricity Price; How far?” mimeo; on file with the authors.

    Google Scholar 

  • Sevaioğlu, Osman (2005) “4628 ve Çam Fıstıklı İrmik Helvası”, Global Enerji July 2005.

    Google Scholar 

  • Ugaz, Cecilia and Catherine Waddams Price (2003) Utility Privatization and Regulation: A Fair Deal for Consumers?, Cheltenham, UK: Edward Elgar.

    Google Scholar 

  • Ulusoy, Ali and Fuat Oğuz (2007) “The privatization of electricity distribution in Turkey: A legal and economic analysis” Energy Policy 35, 5021–5034.

    Google Scholar 

  • Wolak, Frank (2005a) “Managing Unilateral Market Power in Electricity” World Bank Policy Research Working Paper 3691, Washington DC: The World bank.

    Google Scholar 

  • World Bank Group (2009) Running a Business in Turkey, Enterprise Surveys Country Note Series, Turkey Country note no. 1 rev. 7/2011, http://www.enterprisesurveys.org/~/media/FPDKM/EnterpriseSurveys/Documents/Country%20Notes/Turkey-09.pdf accessed December 15, 2011.

Download references

Author information

Authors and Affiliations

  1. Arts and Social Sciences, Sabanci University, 34956, Istanbul, Turkey

    Izak Atiyas

  2. Department of Economics, Yildiz Technical University, Yildiz Kampusu, 34349, Istanbul, Turkey

    Tamer Çetin

  3. Bureau of Economic Geology, University of Texas at Austin, 1801 Allen Parkway, Houston, TX, 77019, USA

    Gürcan Gülen

Authors
  1. Izak Atiyas
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Tamer Çetin
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Gürcan Gülen
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

© 2012 Springer Science+Business Media New York

About this chapter

Cite this chapter

Atiyas, I., Çetin, T., Gülen, G. (2012). Regulatory Reform and Competition in the Turkish Electricity Industry. In: Reforming Turkish Energy Markets. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-0290-9_2

Download citation

Publish with us

Policies and ethics

Search

Navigation