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Turkish electricity sector expecting structural changes

14 Dec 2011 13:01:30 | edem

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The Turkish electricity market is expecting a series of structural changes if amendments to the current energy laws are passed next year, a source at national regulator EMRA said.

The two major developments will involve the introduction of a licence for market operators, including brokers and exchange-type outfits, and the merger of the current wholesale licence with the retail licence.

The Turkish electricity market is currently undergoing changes aiming to improve liquidity and help the sector rake in more investment.

On 1 December, the country saw the switch over from a transitional Day-ahead for planning platform to a fully-fledged bourse, following the model of well-established European exchanges (see EDEM 29 November 2011).

This bourse is expected to be split into EPIAŞ - the Day-ahead exchange that would run as a private entity - and a balancing market that would be handled by TEIAŞ, the grid operator.

Under the new changes included in the proposed amendments, EPIAŞ would require a licence to operate.

Also, any brokers seeking to operate an over-the-counter trading platform would have to apply for a licence.

"Most probably there will be a cost for this licence, but at the moment it is still early to speculate about the amount," a source at EMRA said.

One trader active in Turkey said merging the wholesaler and retail licence into a single supplier licence would be beneficial, but added that these licences should be free to market participants. Turkey currently has one of the most expensive licensing regimes in Europe. A wholesale licence costs an average of Turkish Lira 270,000 (€109,623).

The source added that the law could oblige any platform operators to report transactions to EMRA.

A participant active on the Turkish market said the news proved the regulator was acknowledging that the market was taking off.

But he said: "There are two critical points here. Firstly, the licensing process should be quick. Secondly, they should make it very clear who would be taking care of the transactions EMRA or the Capital Markets Board.

"My fear is that it will take some time before these changes are enacted because they have to be approved by the parliament first."

He added Turkish brokerage oversight should be harmonised with emerging EU regulations.

All high-profile European brokers have launched a Turkish screen in expectation of the launch of the over-the-counter market. AS

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