Lights Could go out on Turkey if New Law is Not OverturnedBy Icis Heren, PRNE
Sunday, January 16, 2011
LONDON, January 17, 2011 - The lights could go out in Turkey as early as 2019 unless new
tax on wholesale electricity companies is scrapped, the energy markets expert
ICIS Heren warns.
Turkish energy watchdog EMRA has decided to slap a TRL 750m
(Turkish Lira) levy on all wholesale companies to cover grid losses and
"There is a genuine fear among Turkish energy companies that
wholesale companies would either lose important margins or be wiped out
completely as a result of the regulation," said Aura Sabadus, Turkish energy
market specialist at independent news and price publisher ICIS Heren, London,
GB. "Much needed investments in new capacity would also be jeopardised."
The new tax, branded theft tax in Turkey, will end up on
consumers' bills alongside other existing costs linked to distribution,
transmission and raw energy.
The rules will also prevent wholesale companies offering
competitive discounts to their customer. Smaller companies fear their margins
will either be reduced to a bare minimum or that they might lose their
"EMRA is right in the sense that there is a need to recover
the losses on the grid," said Aura Sabadus. "However, from our experience in
covering European energy markets there may be other options available. The
UK, for instance, takes a two-pronged approach. On the one hand it operates a
system of incentives to distribution companies to minimise the loss of
capacity on the grid and on the other hand it requires suppliers to buy more
capacity in order to cover for losses," she added.
The electricity wholesale and grid sector represents up to 4%
of the Turkish GDP. Turkey earns as much as TRL 20bn from the Turkish power
TEIAS, the Turkish grid operator, predicts the country needs
17.2GW of additional capacity within the next eight years to meet demand
which is surging on average 7% per year.
ICIS Heren is an information service provider for gas, liquefied natural
gas, power, carbon and coal market intelligence. We publish a suite of
tailored reports providing news, analysis, benchmark price assessments and
indices. Through our reports we aim to bring liquidity and transparency to
power and gas hubs, helping you analyse the sector and make informed business
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For further information please contact: Aura Sabadus ICIS Heren t: +44-20-7911-1853 e: firstname.lastname@example.org www.icis.com/heren
For further information please contact: Aura Sabadus, ICIS Heren, t: +44-20-7911-1853, e: aura.sabadus at icisheren.com
Tags: ICIS Heren, January 17, London, Turkey, United Kingdom