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A paper on the unsettled question of Turkish electricity market: Balancing and settlement system (Part I)

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  • Erdogdu, Erkan

Abstract

Turkish electricity market law (EML) came into force in 2001 aiming at establishing a financially strong, stable, transparent and competitive electricity market based on bilateral contracts. Also, a balancing and settlement system (BSS) was put into practice in November 2004 to create a market where uncontracted generation can be traded, and actual implementation of the BSS started on August, 1st 2006 following a 21-month virtual implementation period. However, BSS has always been criticized from its beginning as transferring excessive profits to private generation companies. The present paper analyzes the implementation of BSS and argues that current BSS not only undermines the healthy development of the electricity market in Turkey but also prevents power investments due to uncertainties it created. It concludes that since the inconsistency between the objectives of EML and results of BSS in practice is obvious, Turkish policy makers need to modify current electricity market policy in line with suggestions presented in the paper.

Suggested Citation

  • Erdogdu, Erkan, 2010. "A paper on the unsettled question of Turkish electricity market: Balancing and settlement system (Part I)," MPRA Paper 19090, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:19090
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    File URL: https://mpra.ub.uni-muenchen.de/19090/1/MPRA_paper_19090.pdf
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    References listed on IDEAS

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    Cited by:

    1. Erdogdu, Erkan, 2011. "The impact of power market reforms on electricity price-cost margins and cross-subsidy levels: A cross country panel data analysis," Energy Policy, Elsevier, vol. 39(3), pages 1080-1092, March.
    2. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.

    More about this item

    Keywords

    Balancing and settlement; Turkey; Electricity wholesale market;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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