Renewable Energy Certificates

In Türkiye, RECs standards are implemented on a voluntary basis. In this context, certificates issued within the scope of the national Renewable Energy Guarantee of Origin System (“YEK-G”) and the international I-REC system constitute the types of RECs traded in the Turkish electricity market.

YEK-G

YEK-G system has been introduced to Turkish electricity market in 2021. The related procedures and principles are set out in the Regulation on the Renewable Energy Guarantees of Origin in the Electricity Market (“Regulation”) and the authorized institution to issue certificates is the Energy Markets Operator Company of Türkiye (“EPİAŞ”). EPİAŞ operates the Organized YEK-G Market where YEK-G certificates are bought and sold among market participants, and performs the registration, issuance and redemption of YEK-G certificates. Turkish Electricity Transmission Company and the relevant distribution license holders are responsible for transmitting the relevant data to EPİAŞ as meter measurement institutions. This entire process and market operation is subject to the supervision of the Energy Market Regulatory Authority.

The conditions for participation in the YEK-G system can be summarized as follows:

• Legal entities holding renewable energy generation and supply licenses can apply to EPİAŞ to become “system users”.
• Multi-resource electricity generation license holders can participate in the organized YEK-G market only if all of their energy resources are renewable. In addition, license holders with active registrations in I-REC or other REC markets cannot participate in the YEK-G Market for the same generation facility.
• License-exempt electricity producers are not allowed to become users of the YEK-G system.
• Those who wish to apply for participation in the market are required to sign the YEK-G participation agreement and YEK-G system participation undertaking and fulfill other financial obligations such as collaterals and participation fees specified in the YEK-G System and in the Organized YEK-G Market Operating Procedures and Principles.
  
  

Following the registration, EPİAŞ creates a user account for the relevant producer in the YEK-G system registration database, which is associated with the relevant renewable generation facility. Upon the application of the producer registered in the system, EPİAŞ creates 1 YEK-G certificate for each 1 MWh of renewable energy production as certified by meter measurement institutions and transfers the issued YEK-G certificates to the relevant producer’s account.

System users that hold generation or supply license can buy and sell the issued YEK-G certificates. The tradable YEK-G certificates can be transferred between the accounts of system users together with or independently from the electrical energy. In the organized YEK-G market, the party wishing to purchase certificates can choose YEK-G certificates according to the resource type and, consequently, prices are determined on a resource basis. Contracts entailing an obligation to receive or deliver YEK-G certificates equal to the matching amount over the matched price are processed by EPİAŞ in accordance with the continuous trading method. Bids for each contract are evaluated separately and the best priced one among the bids submitted for the same contract are matched first.

System users submit a “redemption” notification to EPİAŞ to verify the renewable energy supply subject to YEK-G certificates, and the relevant YEK-G certificates are terminated by EPİAŞ so that they cannot be transferred again. Redemption certificates are also shared with the final consumer using green energy, and informing consumers about the renewable energy resource they use is called “disclosure” under the Regulation. Thus, consumers can claim, prove and guarantee that they used renewable energy during the relevant consumption period through the YEK-G certificate. Consumers have the opportunity to verify their YEK-G certificates with the redemption number from EPİAŞ YEK-G Certificate Verification Portal. YEK-G certificates are valid for 12 months from the end of the production period and if they are not redeemed by the system user within this period, they will be withdrawn by EPİAŞ and cannot be subject to any other transaction.

I-REC

I-REC, on the other hand, is an international certification system that has an implementation in Türkiye and proves that electricity is generated from renewable energy resources. Subject to a global system, I-REC certificates are issued by an authorized body in each country and these authorized bodies are audited by the International Renewable Energy Certificate Standard Foundation. I-RECs entered the Turkish energy market in 2015 and are issued by Foton Yazılım Teknolojileri ve Enerji Danışmanlık Hizmetleri A.Ş. (“Foton A.Ş.”), the authorized institution. Similar to other RECs, each I-REC corresponds to 1 MWh of electricity generated from renewable energy sources.

When issuing I-REC certificates, the related power plant is registered first. It is possible for all licensed or license-exempt renewable energy power plants to register in the I-REC system. The producers registered in the system request to create credit by submitting the documents evidencing their production. I-REC certificates show the credits used, and in the process of creating I-REC certificates, the documents evidencing the electricity production and the final electricity production data are reviewed.

I-REC certificates can be bought and sold similar to YEK-G certificates and are traded through Foton A.Ş. Producers, suppliers and consumers who wish to engage in certificate trading activities need to create a “Foton Platform Account”. The issued certificates are transferred to the producer’s account and consumers can view and purchase these certificates. Consumers can use the certificates they have acquired in their greenhouse gas emissions reporting.