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Transition to Electronic Guarantees in Electricity Market Mandated by EPDK

The Energy Market Regulatory Authority’s (EPDK) decision regarding electronic guarantees in the electricity market has been enforced, requiring market participants to convert their existing guarantees into electronic format by the following year.

According to the decision published in the Official Gazette, guarantees that market participants operating in organized wholesale electricity markets are required to submit will now be presented in electronic form.

Existing guarantees must be converted into electronic guarantees by January 1, 2025. Guarantees not converted by this date will not be considered in guarantee calculations.

The records of all free consumers registered on behalf of market participants in the Market Management System (PYS) that do not meet the additional guarantee amount to be submitted as of 11:00 a.m. will be deleted from the first business day onwards. The deletion of these records will be implemented retroactively from the billing period in which the total guarantee calculation was made.

In case a participant presents multiple types of guarantees, these guarantees can be partially or entirely exchanged with other assets.

As per the amendment, for the calculation of the Turkish lira equivalents of guarantees, the exchange rate announced by the Central Bank of the Republic of Turkey (CBRT) at 3:30 p.m. one business day before the calculation day will be taken into account for cash guarantees in foreign currency and electronic guarantee letters in foreign currency.

For Treasury bills issued by the Ministry of Treasury and Finance, the indicative prices published in the Official Gazette on the day of calculation by the CBRT will be considered. For Eurobonds issued by the Ministry of Treasury and Finance, the prices determined by the central reconciliation committee will be determinative.

In the event of presenting multiple types of guarantees, these guarantees can be partially or entirely replaced with other assets accepted as guarantees other than cash in Turkish lira and Turkish lira-denominated electronic guarantee letters. A valuation coefficient will be applied to assets accepted as guarantees other than cash in Turkish lira and Turkish lira-denominated electronic guarantee letters. This coefficient will be determined by the market operator upon the recommendation of the central reconciliation organization, taking into account similar coefficients applied in other markets.

If precautionary measures are taken on guarantees or if a situation arises that eliminates the definitive guarantee nature of the related asset, these assets will not be considered in the total guarantee account of the market participant.

source: aa.com.tr/ prepared by Melisa Beğiç

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