MUSTAFA ANIL AKKAYA

The Evolution of Feed-in-Tariff Mechanism Towards Feed-in-Premium Mechanis

Abstract

Governments implement many policies for deployment of renewable energy. This paper describes two most important policies for renewable energy deployment. These policies are feed-in-tariff and feed-in-premium mechanisms. Within the scope of the study, these two policies will be defined and their advantages and disadvantages will be explained. In recent years members of the European Union have agreed that the feed-in-tariff mechanism have a disruptive effect on the spot electricity market due to the fact that renewable power plants were receiving a fixed payment and they were usually able to give price independent orders to spot market. In order to prevent this deterioration, the premium guarantee mechanism has gained importance in Europe and many member countries of the European Union started implementing feed-in-premium mechanism. This study describes how feed-in-tariff mechanism evolved into feed-in-premium mechanism. Before starting the implementation of the feed-in-premium mechanism, most of the EU countries reduced the fixed payments paid to renewable power plants based on feed-in-tariff. This reduction is called tariff degression and depends on some variables. The study will provide an explanation of these variables and provide additional information about the current situation of tariff degression and feed-in-premium in some EU member countries. In addition, the study will provide empirical data about the renewable energy supporting mechanism (YEKDEM) implemented in Turkey, which is obtained through the EPİAŞ Transparency Platform. Part of the empirical data will be related to the cost structure of power plants benefiting from renewable energy support mechanism. Other part of the empirical data will be about the spot market actions of the power plant’s owners that are utilizing renewable energy support mechanism. YEKDEM mechanism implemented in Turkey is based on feed-in-tariff and the fate of this implementation is not known after 2020. Based on the developments in Europe and empirical observations in the market, the study will be concluded by providing some recommendations on what to consider for the change of YEKDEM system.

Biography

He graduated from İstanbul University from Electrical&Electronics Engineering Department in 2015. He worked as an assistant specialist in Intraday Electricity Market from September 2015 to March 2018 in Energy Exchange Istanbul. He has been working as a specialist in the same department since March 2018. He is continuing his studies for his MBA degree at Yeditepe University, Institute of Social Sciences. His research fields are energy economics, energy markets and energy management.