Turkish electricity market expects amended law details in February
Turkey's general assembly is expected to discuss core elements of the country's electricity market law as early as the week of 11 February after it passed the body's energy commission earlier this month.
No details have been published officially, but ICIS understands that the 20 core articles cover the law's most important provisions, including the shareholding structure of the anticipated EPIAS exchange, plans for generators to take an active part in the forward market and provisions related to issues involved in pre-licensing and licensing for generation.
ICIS understands from three separate sources that the amendments approved by the commission remove controversial wording that define the over-the-counter (OTC) market as an organised wholesale market, but clarifications are yet to be made regarding the future of such a setup.
One of the most important elements of the law included provisions for the shareholding structure of EPIAS, which reportedly will be majority-owned by the Istanbul Stock Exchange (ISE). However, ICIS understands that there will be a clear separation between EPIAS, which will deal with spot trading exclusively, and ISE, which will operate the derivatives market. The amendments are expected to cap the straight share ownership in EPIAS to 15% (see EDEM 10 January 2013).
Trading for generators
It is also expected that the provisions include legislation that, for the first time, will enable generators to buy and sell production on the forward market. It is not yet clear how much generators could trade on the forward market or whether that market will include both exchange and OTC arrangements.
However, several sources interviewed by ICIS said that, even if producers could become active OTC players, they might be deterred from taking an active forward-market position because of stamp duty that applies to all concluded transactions. Each time a product changed hands, a levy equating to 0.940% of the agreement's value would be charged. ICIS understands that the stamp duty rate has recently been increased from 0.872%.
The amendments are now expected to be sent to the general assembly for approval. If they are rubber-stamped, the EPIAS exchange is likely to be set up within the next six months. Aura Sabadus
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