(Energy Market Regulatory Authority) İLKER ÜÇLER EMRA (Energy Market Regulatory Authority) 10 May 2017

Turkish Electricity Network System & Interconnections & Cross Border Trade

Energy Market Regulatory Authority The sole regulator of the Turkish electricity, natural gas, petroleum and LPG markets . The architect of the liberalization and regulation of the Turkish energy market An independent public entity with administrative and financial autonomy established in 2001 Governed by a 7-members board Functions: Issue regulations License market participants Approve tariffs Monitor, supervise and audit markets and market players

TURKEY Total energy supply, 1973-2015 Energy demand is growing rapidly and is dominated by fossil fuels (88%), signalling significant scope to improve efficiency and boost renewables

TURKISH ELECTRICITY CAPACITY

INSTALLED CAPACITY AND DEMAND Projection

Short Term Capacity Projections PEAK LOAD YEAR PEAK LOAD ENERGY DEMAND GW growth TWh growth (%) %) 2016 44.6 3,0 273 2,9 2017 46.5 4,3 285 4,3 2018 48.8 4,9 299 4,9 2019 51.3 5,1 314 5,1 2020 53.9 5,2 331 5,2 2021 56.7 5,0 347 5,0 2022 59.4 4,9 365 4,9 2023 62.2 4,7 382 4,7 2024 65.1 4,6 399 4,6 2025 67.9 4,4 417 4,4 http://www.teias.gov.tr/YayinRapor/apk/projeksiyon/Kapasite%20Projeksiyonu_5%20Y%C4%B1ll%C4%B1k_30_12_2016.pdf

2013-2023 RES targets Based on Directive 2009/28/EC, Turkey’s national Renewable Energy Action Plan (REAP) has been published by the Ministry on December 2014 to establish strategies to promote the development of renewable energy in Turkey. The targets in REAP for RES are set to: RES production has increased to 30% the year 2023 is taken as the milestone, as it is the 100th anniversary year of the Republic and several macroeconomic and sectorial targets are set for that year.

TURKISH ELECTRICITY NETWORK Turkish Electricty Transmission Corp. (TEİAŞ) a) Stable Network Frequency Band 49,8 Hz ≤ f ≤50,2 Hz b) Acceptable Network Frequency Band: 49,5 Hz ≤ f <49,8 Hz ve 50,2 Hz < f ≤ 50,5 Hz c) Critical Network Frequency Band: 47,5Hz ≤ f < 49,5Hz ve 50,5Hz < f ≤ 52,5Hz d) Unstable Network Frequency Band: f < 47,5 Hz ve 52,5 Hz < f

Grid Map

Location of the PPs in the Grid

Transmission lines (high voltage) 53.408 km ELECTRICITY NETWORK Transmission lines (high voltage) 53.408 km Distribution lines: 1.150.000 km Total: 1.2 million km 5. biggest in World and 2. biggest in Europe

TEIAŞ Strategy Paper (2015-2019) TEIAS Targets (2015-2019 Strategic Plan Performance Indicators 2015 2016 2017 2018 2019 2500 km lines investment for RES integration 400 kV &154 kV lines length 500 32 substations will be procured by TEİAS and constructed by users within the scope of connection agreement 400 kV & 154 kV transformation station number 7 6 600 MW DC Back to Back Interconnection Line with Iran Construction % 10 40 100 - 600 MW DC Back to Back Interconnection Line with Syria 30 500 MW DC Back to Back Interconnection Line with Iraq 70

TEIAŞ Strategy Paper (2015-2019) TEIAS Targets (2015-2019 Strategic Plan Performance Indicators 2015 2016 2017 2018 2019 400 kV İnterconnection line between Georgia & Turkey Construction % 10 40 80 100 400 kV İnterconnection line between Iraq & Turkey 400 kV & 154 kV transformation station number 30 70 *Procument of 4000 new generation relays with numeric tecnology and suitable for Smart Grid Apps. Number of relays 1000 - ** Procurement of 250 Remote Transformator Monitoring Systems Number of RTMs 50 Research & Planning Phase for FACTS power electronic applications to be completed. Progress% 20 *11000 relays already existing before 2015 ** 250 RTM syst. Were existing before 2015

TEIAŞ Strategy Paper (2015-2019) TEIAS Targets (2015-2019 Strategic Plan Performance Indicators 2015 2016 2017 2018 2019 154 kV 100 MW DC Back to Back facility in Doğu Beyazıt Progress % 10 30 70 100 - Establishment of National SCADA System Prototype Progress% 50 Tendering Mechanism for Primary and Secondary Reserves 100* Secondary Reactive Power Control Systems 20 *New Ancillary Services Regulation has been drafted by EMRA

INTERCONNECTIONS

EXISTING AND PLANNED INTERCONNECTIONS

EXISTING INTERCONNECTIONS

PLANNED INTERCONNECTIONS

ENTSO-E

ENTSO-E European Network of Tranmission System Operators for Electricity Founded in 19 December 2008. Active from 1 July 2009 43 TSO - 36 countries 525 million person 880 GW production capacity 270,000 km ETN 3,300 TWh/y consumption 400 TWh/y energy trading Founded instead of these companies: ATSOI, BALTSO, ETSO, NORDEL, UCTE, 22

ENTSO-E

TURKEY’S ENTSO-E CONNECTION Milestones Date Contractual Agreement between ENTSO-E & TEİAŞ 18 December 2009 Isolated Operation Test (Peak Load) 11-24 January 2010 Isolated Operation Test (Min. Load) 22 March-5 April 2010 Synchronous Parallel Operation Test Phase 1,2,3 2010-2011 Increase of NTCs 17 April 2013 Decision for Permanent Synchronous Operation 9 & 24 April 2014 Signing of the Long Term Agreement 15th April 2015 Observer Membership process is initiated 18th June 2015 Observer membership Aggreement 14th January 2016

Connection to Europe On 18 September 2010 at 9h25 (CET) the Turkish power system was synchronized with the interconnected power systems of Continental Europe. The Turkish power system is connected to the Bulgarian system by two 400 kV lines and to the Greek system by one 400 kV line. The parallel operation within the Continental European Synchronous Area will increase the quality and security of the electricity supply in Turkey, and is foreseen to eventually provide access to the European Electricity Market.

TR-ENTSO-E Connection BULGARIA TURKEY 400 kV HAMİTABAT 145 km. 136 km. MARITSA 400 kV GREECE 200 km. 400 kV BABAESKİ Current interconnection between Turkey & Bulgaria and the planned interconnection between Turkey & Greece is illustrated in the figure. As seen here, the 400 kV line between Turkey-Greece has a length of 260 km, and the lines between Turkey-Bulgaria has lengths of 145 km and 136 km. 400 kV NEA SANTA 400 kV

Target- Output

(The aim is to create an auction mechanism among member countries) SEE-CAO Members (The aim is to create an auction mechanism among member countries) Coordinated Auction Office in South East Europe Ltd Podgorica (hereinafter: SEE CAO) was registered on April 01st 2014 as a legal successor of PTC with following shareholding companies Coordinated Auction Office in South East Europe (hereinafter: SEE CAO) was established in 2014, after few years of intensive preparation, by its shareholders - TSOs from the region of South East Europe with the objective to perform the explicit allocation of cross-border transmission capacity in both directions between Control Areas of the Participating TSO’s, through NTC based Auction Processes in accordance with the requirements of Regulation (EC) 714/2009 of the European Parliament and of the Council on conditions for access to the network for cross border exchanges in electricity which also became a part of Energy Community aquis in line with the stipulations of Energy Community Treaty.

CROSS BORDER TRADE

Legal Basis Within the framework of the Electricity Market Law* numbered 6446, in the Turkish Electricity Market, the principles and procedures on cross border trading are carried out according to Electricity Market Import and Export Regulation**, which have been revised by Energy Market Regulatory Authority (EMRA) Revised Regulation enacted on 17/05/2014 * Former Electricty Market Law 462820/2/2001 ** Former Electricity Market Import and Export Regulation

Purpose Article 1 – The aim of this regulation is; to define the formalities on electricity import and export activities, and to put prosedures on the usage of international transmission lines.

The eligebable market player for import and export activities Private companies with supply licensees may engage in the import and/or export of electricity, Government owned Trade Company(TETAŞ) may engage in the import and/or export of electricity (within the context of the Intergovernmantal Agreements), Generation companies engage in only export of electricity

Electricity import or export is possible under following conditions Synchronized connection Unit direction method Asynchronous parallel (DC) connection. Feed of the isolated region

INTERCONNECTIONS SYNCHRONOUS CONNECTIONS; Bulgaria Greece NON-SYNCHRONOUS CONNECTIONS; Iranian Iraq Syria Nakchivan Armenia Georgia BACK TO BACK CONNECTION

Capacity Allocation for Synchronous Connection Bulgaria: TCAT Platform tcat.teias.gov.tr/ Grece: SEE CAO Platform seecao.com/ In case of excess demand, capacities are allocated via auctions Capacity is allocated by the methot of »Explicit Auction» Hourly, daily, monthly, yearly auction SEE-CAO- the auctions on Turkey – Greece border started from September 2015. 

T-CAT Tender Platform SEE-CAO- the auctions on Turkey – Greece border started from September 2015.  /

Allocations for Non syncronized connections First, System Operator announces net transfer capacity of interconnections, Application for import/export Main document is intention letter/agrement (of other parties) Ministry (political) and TEİAŞ (SO) (technical) approval Anouncment of application Tender (if excess demand) License amendment (upto 1 year)

CROSS BORDER CAPACITY WITH GEORGIAN There is a 400 kV transmission line (Akhaltsikhe (Georgia) – Borçka (Turkey)) together with a DC back-to-back station at Georgian side. This line is operated with asynchronous parellel method. The capacity allocation is carried according to the Intergovernmental Agreement between Turkey and Georgia governments, as per the provisions of the Cross Border Trade Agreement and the Interconnection Operation Agreement the exporter side carry out capacity allocation.

Who is Med-TSO Med-TSO is the Association of the Mediterranean Transmission System Operators (TSOs) for electricity, operating the High Voltage Transmission Networks of 18 Mediterranean Countries. It was established on 19 April 2012 in Rome as a technical platform that, using multilateral cooperation as a strategy of regional development, could facilitate the integration of the Mediterranean Power Systems and foster Security and Socio – economic Development in the Region. Med-TSO by numbers • 20 members from 18 Mediterranean countries, covering an area of 8,5 million km2 ca, • About 500 million of consumers served • Around 400.000 km of transmission lines operated  • Almost 544.000 MW of installed capacity • More than 1600 TWh of total electricity consumption

Med-TSO objective and activities Med-TSO members share the primary objective of promoting the creation of a Mediterranean energy market, by promoting: • the coordination among the Med-TSO Countries of their National Transmission Network Development Plans and of their Power System operation, studying the development of an integrated, secure and sustainable Mediterranean Power System and promoting cross-border projects aiming at facilitating the integration of new energy sources (especially from RES), increasing security and quality of power supply; • the use of common criteria and harmonized, transparent and non-discriminatory technical rules; • training, knowledge sharing and technical assistance in the Region • enhanced communication and consultation with stakeholders • the cooperation among the Mediterranean TSOs and coordinated approach towards the Institutions (in particular with the association of the Mediterranean Regulators for energy, MEDREG, and the European Network of TSOs for electricity, ENTSO-E);

Thank you for listening… iucler@epdk.org.tr www.epdk.org.tr