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EPIAS: A new era begins in the electricity market

Abdullah Tancan, Deputy Minister of Energy and Natural Resources and Chairman of the Executive Board of EPIAS, said, “With the Electricity Futures Market, an additional trade service with physical delivery will be offered to the market.”

A new era begins in the Turkish electricity market with the Term Electricity Market (VEP) and Renewable Energy Resource Guarantee (YEK-G) system, which will be put into service on June 1 by Enerji Pazarlari Isletme A.S.

With new markets to be implemented this year, Turkey is crossing an important threshold in line with its goal of becoming an energy trade center.

Abdullah Tancan, Deputy Minister of Energy and Natural Resources and Chairman of the Board of EPIAS, stated that VEP and YEK-G markets will be activated on June 1 and said, “With all these markets and the Futures Market (VGP) we will open this year, we will have more or less all products in the advanced energy markets.”

Noting that long-term electricity contracts that are unregulated and do not provide central counterparty service are traded in cash and physically in the over-the-counter markets (OTC), Tancan said, “In this context, in VEP, the central counterparty service that can manage the risk that may arise among market participants for the sector will be provided by EPIAS.”

Noting that an additional trading service with physical delivery will be offered to the market with VEP, Tancan said that market participants will have the opportunity to hedge against price risk and see future price expectations.

A SUSTAINABLE INVESTMENT ENVIRONMENT WILL BE CREATED WITH VEP

Tancan pointed out the importance of VEP in terms of investment and supply security and said:

“In VEP, predictability will increase with reference prices to be formed for the future, and purchase and sale will be made at prices that are already determined for the future. While predictability will be provided for investors and consumers, more comfortable financing opportunities will be created for the investor. A sustainable investment environment has been created by eliminating financial uncertainty for investments, preventing investment delays that may arise, thus contributing to supply security.”

Stating that high volume and liquidity are expected to be reached in the medium and long term in VEP, Tancan said, “It is expected to significantly contribute to the increase of predictability, reliability and transparency with healthy reference prices that will be formed for the future, with the opportunities of fixing costs to market participants, protecting from price fluctuations in spot markets, trading in VEP and arbitrage between markets.”

Tancan stated that consumers who use the free consumer right of VEP and who make bilateral agreements with their supplier in this context can take the prices formed in VEP as a reference during the negotiation process and said, “A predictable market environment will be created where the producer and the consumer can manage their energy costs.”

“YEK-G SYSTEM WILL INCREASE THE DEMAND FOR RENEWABLE ENERGY SOURCES”

Tancan said that in addition to the VEP, the YEK-G system to be implemented on 1 June aims to expand the use of renewable energy sources in the production and consumption of electricity and to protect the environment.

Noting that the YEK-G certificate will enable consumers to certify that the electrical energy supplied is generated from renewable energy sources, Tancan continued as follows:

“Before the YEK-G system, consumers in Turkey could only purchase renewable energy through a bilateral agreement with electricity producers who had a generation portfolio consisting of renewable energy, and the suppliers were not obliged to disclose the source of the electricity they offered to their consumers.

There was no certification system to monitor and guarantee the source of renewable energy. In the YEK-G system established with the intensification of the needs in this direction, with the YEK-G certificates redeemed to the consumers, renewable energy will be provided as a separate product on the basis of source and the demand for renewable energy resources will increase.

Stating that with the increase in renewable energy generation, consumers also demand renewable energy as a separate product, Tancan said, “Corporate companies are committed to using renewable energy to strengthen their reputation and relations with their customers and increase the reliability of their brands in the fight against climate change. In this context, YEK-G documents will enable the transparent and reliable supply of renewable energy.”

“TERM CONTRACT PRICES IN BLACK SEA GAS AND EPIAS WILL CREATE AN ADVANTAGE FOR OUR COUNTRY”

On the other hand, Tancan emphasized that with the VGP, which is planned to be commissioned on October 1, the depth and product diversity in the energy markets will increase.

“More than 70% of oil and natural gas resources are produced in our eastern countries. A large part of this production is consumed by western European countries. Our country is also a serious consumer on its own. Our country, which was referred to as the “energy transition zone” until recently, is trying to become an “energy trade center” in its region with the policies followed. The discovery of the largest natural gas reserve in the history of the Republic, which our President gave the good news, is one of the most important indicators of these efforts.

As EPIAS, we will be the most developed market in our region with the markets we operate and open. We also develop the software used in these markets with our own internal resources. I hope that in the new period, the futures contract prices in Black Sea gas and EPIAS will create an advantage in favor of our country.”

Referring to the support given by the ministry to renewable energy, Tancan said, “These and similar moves will bring energy supply security in the short and long term and the competitiveness and efficiency of the markets to our country. In a market with price stability, the number of domestic and foreign investors will increase, as there is reliability and predictability.”

Source: NTV / Translated by Irem Yildiz

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