Market liberalization process and market arrangements in Turkey

Turkey is among the worldpsilas fastest growing energy markets. Investment requirement for Turkish power sector is beyond the financing capability of the public sector. Increasing investment requirement has been one of the drivers behind the power sector liberalization process. One of the major steps in liberalization process has been publishing of electricity market law. The law introduced unbundling of activities and establishment of the regulator and stipulates a bilateral contracts model complemented with a balancing market, a regulated third party access regime, and eligible consumers scheme. The law also introduced changes in tariff setting approach which can be summarized as cost reflectivity, avoidance of cross-subsidies and employment of regional tariffs. Implementation of the BSR introduced a balancing mechanism, with new rules defined for financial settlement of balancing activities and with significant changes to the rules for settlement of imbalances. There has been progress in design of the final market structure.