Sustainability reporting and supply chain expectations have added to the question of “how much energy a company consumes” the further question “what is the source of this energy?”. Once electricity enters the grid, it cannot be physically separated according to its source. Proving the use of renewable energy in legal and accounting terms therefore relies on certification systems.

The YEK-G certificate

The Renewable Energy Resource Guarantee (YEK-G) Certificate is an electronic certificate showing that a certain amount of electricity has been generated from a renewable source. The system was established by regulation of the Energy Market Regulatory Authority (EPDK) and is operated by the Energy Markets Operation Company (EPİAŞ).

• Each certificate represents one megawatt-hour of generation.
• Certificates may be bought and sold directly from the generator through bilateral agreements or on the organised renewable energy market.
• A certificate used on behalf of consumers is cancelled, which prevents the same generation from being claimed twice.

YEK-G certificates are one of the principal tools enabling companies to document their use of renewable energy when reporting their indirect emissions.

Corporate power purchase agreements

Large consumers have begun to enter into direct bilateral agreements with renewable energy generators for long-term price predictability and sustainability goals. The main points to consider in these contracts are as follows:

• The price and indexation mechanism,
• Who bears the risk of fluctuations in the amount generated,
• The transfer and cancellation of YEK-G certificates,
• The allocation of imbalance costs,
• Adaptation of the contract and termination conditions in the event of a change in legislation.

Unlicensed generation for self-consumption

Electricity Market Law No. 6446 allows electricity to be generated without a licence under certain conditions. Rooftop and façade installations and renewable energy facilities associated with a consumption facility fall within this scope. Following amendments in recent years, unlicensed generation has been focused mainly on meeting self-consumption; feeding surplus generation into the grid and determining its price have been made subject to more limited and detailed rules.

In unlicensed generation projects, the connection opinion, the proportional relationship between consumption and generation, and the installed capacity limits directly affect the feasibility of the project.

Assessment

Green energy procurement is a new area of practice that combines energy law with sustainability reporting and contract law. For companies, the main risk is making “green energy” claims before the certification and contractual structure have been established on a sufficiently sound basis. Such claims are being scrutinised increasingly strictly under reporting standards and the rules on unfair commercial practices.