Turkey on the way to becoming an energy hub IFLR 1000 Energy & Infrastructure 2014

Turkey has a vision to become a regional energy trading hubfor both physical and financial energy commodities, especiallyelectricity and natural gas. A strong regulatory framework isrequired to support this vision. In order to create a strong commoditytrading market, this aim should be clearly reflected in the legislation,not only in the energy market laws and regulations but also in otherlaws and regulations.

In order to increase liquidity in electricity and natural gas markets,first the government should ensure non-discriminatory, objective, andtransparent system access. Turkish electricity and natural gas marketregulations have taken serious steps to enhance system access. However,further steps should be taken including: releasing a larger volumeof both electricity and natural gas; formation of a transparent balancingmechanism in natural gas; instituting a reference price for bothelectricity and natural gas; exempting the stamp duty for both naturalgas and electricity trade. The Electricity Market Law was changed anda new Electricity Market Law No. 6446 (the ‘EML’) entered into forceon March 30 2013. The Ministry of Energy and Natural Resourcesalso prepared a draft Natural Gas Market Law (the ‘Draft Law’) whichis expected to become a law within 2014. Both the EML and theDraft Law are taking steps toward non-discriminatory, objective,transparent system access. Although these developments are positiveimprovements, in order to truly facilitate energy trade, changes arealso needed in related areas such as bankruptcy law.

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