Unlicensed Electricity Generation on the Electricity Market has been introduced with the Regulation dated 02.10.2013 that mainly defines the requirements and exemptions for individuals and real persons for generating electricity without obtaning any license.

Accordingly; the generation facilities that can be established with no legal requirement to obtain a license and establish a company are as follows:

a) Aid groups,

b) Isolated production facilities with no connection to the transmission or distribution system,

c) Generation facilities based on renewable energy resources with one megawatt installed capacity or upper limit of installed capacity set by Council of Ministers,

d) Generation facilities based on renewable energy resources consuming all of the produced energy without providing to transmission or distribution systems, which have the production and consumption point in the same location,

e) Cogeneration facilities which meets the required efficiency value defined by the MENR,

f) Micro cogeneration plants,

g) Generation facilities established to operate with municipal solid waste treatment plants and sludge disposal facilities,

h) Investments with more than half of the legal entities directly or indirectly owned by the municipality, if possible technically and if deemed appropriate by the General Directorate for Statae Hydraulic Works generation facilities established on transmission lines, water supply lines and waste water lines run by municipalities.

The generation and consumption facilities of natural or legal persons that will build production facilities must be in the same distribution zone for generating unlicensed electricity.

In the case of individuals or legal persons exempt from license requirements who produce electrical energy from renewable resources and provide such electrical energy to the system, the related electrical energy will be considered under YEKDEM by the related provider company.

YEKDEM is a support mechanism for electricity manufacturers from renewable energy resources, regulated in the Regulation on Documentation and Support of Electricity Manufacturing from Renewable Energy Resources ("Regulation") which entered into force in 2013. Pursuant to article (4) of the Regulation, the support mechanism consists of feed-in tariffs (valid until 2020) for electricity manufacturing license holders and unlicensed electricity manufacturers producing electricity from renewables and other opportunities for renewable energy. Within the framework of the support mechanism, the retail companies assigned by EMRA are required to purchase the produced electricity from the electricity manufacturers that are subject to this mechanism on the tariffs regulated by the legislation; the electricity manufacturer cannot sell the produced electricity to other companies under open market conditions.

These feed-in tariffs vary by the energy resource; for instance, the tariffs for solar energy are 13,3 USD Cent/kWh, whereas these amount to 7,3 USD Cent/kWh for hydroelectricity. In addition, the electricity manufacturer has the opportunity to benefit from local equipment support, in cases where local equipment in the power plant is used. These prices are added to the feed-in tariffs and paid to the electricity manufacturer. As with the feed-in tariffs, the amount of local equipment support depends on the energy resource. Companies manufacturing electricity from renewable energy resources are required to submit their applications until the end of October of each year.

The YEKDEM support mechanism has been regulated in order to encourage investments in renewable energy. The feed-in tariffs constitute a guarantee, especially for electricity manufacturing license holders that have started up recently. Therefore, the risks of instability are minimized due to this mechanism. However, since the feed-in tariffs are determined on the basis of foreign currency, the currency risk might be considered either as a risk or advantage. Moreover, market prices may amount to higher than feed-in tariffs and it is recommended to perform a detailed market analysis in order to minimize the possible risks.