Electricity Generation Loss Due to Grid Curtailment in Turkey: Can Power Plants Claim Compensation? – 2026 Updated Guide

Can power plants claim compensation for electricity generation losses caused by grid curtailment in Turkey? Learn the 2026 rules on TEIAS capacity restrictions, system operator instructions, lost generation, system use agreements, damages and legal remedies for foreign energy investors.

Grid curtailment has become an increasingly important legal and financial issue for electricity generation investors in Turkey. A solar, wind, hydroelectric, thermal, hybrid or storage-integrated power plant may possess a valid generation license, sufficient installed capacity and an operational grid connection, yet still be unable to inject all available electricity into the network because of transmission constraints, system-security requirements, system operator instructions or temporary capacity limitations.

For foreign energy investors, the central question is straightforward but legally complex: if a power plant could have generated and sold electricity but was prevented from doing so because of a grid-related restriction, can the investor recover the resulting financial loss?

The answer depends on why generation was restricted, which authority or system operator imposed the restriction, the legal basis of the instruction, the applicable connection and system use agreements, whether committed transmission capacity was unavailable, and whether the claimed loss falls within a specific compensation mechanism or requires a separate damages claim.

As of 2026, Turkey’s electricity transmission framework continues to be governed by Electricity Market Law No. 6446, electricity market secondary legislation, the Electricity Market Connection and System Use Regulation, the Electricity Market Grid Regulation, balancing and settlement rules, applicable EMRA decisions, and the project-specific agreements entered into with the relevant network operator. EMRA continues to maintain the Connection and System Use Regulation and standard transmission and distribution connection and system-use documents as part of the applicable regulatory framework. (EPDK)

What Is Grid Curtailment?

Grid curtailment generally describes a situation in which a generating facility is technically capable of producing electricity but its output is reduced or restricted because the electricity network cannot, or should not, accept the full available generation at that time.

Curtailment can occur for several reasons. Transmission congestion, transformer limitations, maintenance, network faults, regional oversupply, voltage problems, frequency control, system stability requirements and emergency operating conditions may all result in generation being reduced.

For renewable energy projects, curtailment can be particularly significant because solar and wind facilities cannot simply postpone the underlying natural resource. If a solar facility is instructed to reduce output during peak irradiation or a wind farm must decrease generation during strong wind conditions, that generation opportunity may be permanently lost.

However, the existence of lost generation does not by itself establish a right to compensation. The legal cause of the curtailment must first be identified.

System Operator Instructions and Curtailment

Turkey operates a balancing mechanism under which the system operator may issue instructions affecting electricity generation.

EPİAŞ explains that instructions issued by the National Load Dispatch Center are communicated through the relevant market management system and that market participants are required to comply with applicable instructions. Emergency instructions can also be issued, including in circumstances where the relevant instruction does not correspond to an existing balancing market offer or bid. (EPIAS)

The Balancing Power Market settlement framework uses system operator instructions, bid and offer prices, system marginal prices, generation schedules and meter data in the settlement process. (EPIAS)

This distinction is crucial for compensation claims. A commercially settled balancing instruction should not automatically be treated in the same way as a physical inability of the transmission system to provide contracted capacity.

Investors must therefore identify precisely what caused each reduction in output.

Can Power Plants Automatically Claim Lost Revenue?

No. There is no general rule under which every megawatt-hour that a power plant could theoretically have produced but did not produce because of a system-related restriction automatically becomes compensable lost revenue.

Different curtailment events can produce different legal consequences.

A system operator instruction issued and settled under the balancing market framework may have its own settlement consequences. An emergency instruction may fall under another regulatory mechanism. Failure to provide committed transmission capacity under a system use agreement may trigger a contractual payment mechanism. Unlawful administrative action or breach of a separate contractual obligation may potentially create another category of damages claim.

The first task in any curtailment dispute is therefore classification.

Important Compensation Right Under the TEIAS System Use Framework

One of the most important points for transmission-connected generators is TEIAS’s stated position concerning committed transmission capacity.

TEIAS expressly states that where it is unable to provide capacity committed to a transmission system user for a reason not attributable to that user, the relevant system use agreement provides for payment to the user. According to TEIAS, the amount is calculated on the basis of the system use price corresponding to the unavailable capacity for the period during which that capacity could not be provided. (TEİAŞ)

This creates an important contractual and regulatory protection for eligible transmission system users.

However, investors should distinguish this payment mechanism from a full lost-profit claim.

The amount payable under the system use agreement may be calculated according to the relevant system use price and unavailable capacity. It does not necessarily mean that the generator automatically receives the full market value of every unit of electricity it argues it could otherwise have generated and sold.

That difference can be financially substantial.

Can a Power Plant Claim Additional Lost Generation Revenue?

Whether additional damages can be claimed beyond a specific contractual payment mechanism requires a separate legal assessment.

The investor would generally need to establish an independent legal basis for liability, demonstrate unlawful conduct or breach of an applicable obligation, establish causation between that conduct and the generation loss, and prove the amount of recoverable damage with sufficient certainty.

This may become difficult where output would have depended on variable wind speed, solar irradiation, plant availability, market prices, balancing obligations or other operational conditions.

For this reason, sophisticated curtailment claims require both legal and technical evidence.

SCADA records, meter data, weather measurements, historical generation profiles, availability reports, system operator instructions, market prices, final generation schedules, outage records and correspondence with TEIAS or the relevant distribution company may all become important evidence.

How Is Lost Generation Calculated?

A credible generation-loss claim should not simply multiply installed capacity by the number of hours during which the plant was restricted.

The calculation should establish what the facility would reasonably have generated without curtailment.

For a solar facility, this may involve irradiation data, inverter availability, module performance, historical production and technical losses. For a wind farm, wind speed, turbine power curves, turbine availability and wake effects may be relevant.

The calculation must then determine how much electricity was actually delivered and identify the difference attributable specifically to the disputed grid restriction.

Financial loss is another step. Depending on the project, relevant factors may include market prices, contractual sale prices, support mechanisms, balancing consequences and other project-specific revenue arrangements.

What If Curtailment Is Necessary for Grid Security?

Not every curtailment imposed for system security will create liability.

The electricity transmission system must be operated safely and reliably. System operators require sufficient authority to respond to network congestion, emergencies, frequency deviations, faults and other threats to system stability.

The legality of a curtailment claim therefore cannot be assessed solely from the generator’s perspective.

The relevant questions include whether the instruction was authorized by legislation, whether the system operator followed applicable procedures, whether the restriction was objectively necessary, whether similarly situated generators were treated consistently and whether the economic consequences were handled according to the applicable market and contractual rules.

A lawful emergency intervention can therefore have very different compensation consequences from an unjustified failure to provide contracted network capacity.

Discriminatory Curtailment and Equal Treatment

Foreign investors should also investigate whether curtailment has been applied consistently among comparable generation facilities.

Network access principles are closely connected with transparent and non-discriminatory treatment. TEIAS’s own legal framework describes connection and system-use tariffs by reference to equal treatment between parties and non-discrimination. (TEİAŞ)

If one generator is repeatedly curtailed while comparable facilities using the same network infrastructure are permitted to continue injecting electricity without an objectively justified technical reason, the investor should investigate the allocation methodology.

This does not automatically establish unlawful discrimination. Different plants can have different technical characteristics, connection points, dispatchability or network effects. Nevertheless, unexplained differences may justify further regulatory and legal examination.

2026 Transmission Framework and Curtailment Risk

Curtailment disputes should be considered in the context of Turkey’s continuing transmission investment and tariff developments.

The 2026 transmission system use and system operation tariffs were approved through EMRA Board Decision No. 14204 dated December 30, 2025 and entered into effect on January 1, 2026. (TEİAŞ)

Another important development occurred in February 2026, when TEIAS announced the entry into force of procedures governing jointly constructed transmission facilities. The framework addresses new transmission investments required for generation facilities to connect to the transmission system where relevant facilities are constructed jointly by legal entities on behalf of TEIAS. (TEİAŞ)

These developments matter because insufficient transmission investment and delayed reinforcement can directly influence congestion and curtailment exposure.

Foreign investors acquiring projects in constrained regions should therefore investigate not merely whether a connection exists, but whether the surrounding network can realistically accommodate the project’s expected output.

Curtailment Risk in Solar and Wind Acquisitions

A renewable energy acquisition should include historical curtailment due diligence.

The buyer should obtain historical generation records, system operator instructions, transmission restrictions, outage information, TEIAS correspondence, distribution company correspondence and evidence of previous compensation payments or disputes.

A project may appear attractive because of its installed capacity and historical resource data while producing materially less electricity because of persistent network constraints.

This creates a valuation risk.

Share purchase agreements should therefore include appropriate representations concerning historical curtailment, network restrictions, undisclosed system operator instructions, transmission capacity and pending compensation claims.

Where curtailment is material, the purchase price mechanism may also need to reflect actual deliverable generation rather than theoretical production capacity.

Storage Projects and Curtailment

Electricity storage can potentially reduce some economic effects associated with renewable generation constraints, but storage does not eliminate legal and regulatory curtailment risk.

Whether curtailed electricity can instead be stored depends on the project’s technical configuration, license structure, connection rights, charging and discharging limitations and applicable regulatory requirements.

Storage-integrated projects should therefore examine whether their connection arrangements permit operational strategies capable of reducing lost generation and whether grid restrictions apply to gross generation, grid injection or other relevant technical parameters.

What Should an Investor Do After Repeated Curtailment?

The investor should create a detailed record of every curtailment event. The time of the instruction, requested reduction, actual generation, available generation, reason provided, duration and resulting financial effect should be documented.

The system use agreement and connection agreement should then be reviewed alongside applicable EMRA and TEIAS rules.

If TEIAS has failed to provide committed transmission capacity for reasons not attributable to the user, the specific payment mechanism described by TEIAS should be examined immediately. (TEİAŞ)

Where the investor believes that the restriction resulted from unlawful administrative action, discriminatory treatment or another legally actionable failure, separate regulatory, administrative or compensation remedies may need to be considered.

Can Foreign Investors Bring Administrative Proceedings?

Potentially, yes. Where curtailment is connected with an identifiable administrative decision or regulatory act that adversely affects the project, administrative remedies may become available if the statutory requirements are satisfied.

The appropriate procedure depends on the nature of the disputed act.

An investor should not assume that every dispatch instruction can simply be challenged through an annulment action. Counsel must determine whether the disputed measure constitutes a final administrative act, an operational system instruction, implementation of an existing agreement or another category of conduct.

Procedural deadlines should be examined immediately.

Frequently Asked Questions

1. What does electricity curtailment mean for a power plant in Turkey?

Curtailment generally means that a power plant’s electricity output is reduced or restricted because of network, system-security, balancing or operational requirements even though the facility may otherwise have been capable of generating additional electricity.

2. Can a power plant automatically claim compensation for all curtailed electricity?

No. Compensation depends on the legal cause of the restriction and the applicable regulatory, contractual and market framework. Not every generation reduction creates an automatic lost-revenue claim.

3. Does TEIAS compensate users when committed transmission capacity is unavailable?

TEIAS states that where committed transmission capacity cannot be provided for a reason not attributable to the transmission system user, the relevant system use agreement provides for payment calculated according to the system use price corresponding to the unavailable capacity and relevant period. (TEİAŞ)

4. Is that payment equal to the power plant’s lost electricity sales revenue?

Not necessarily. A payment calculated under the system use agreement should be distinguished from a claim for full lost generation revenue or lost profits. Additional damages require a separate legal analysis.

5. What evidence is needed for a grid curtailment claim?

Important evidence may include SCADA records, meter data, system operator instructions, generation forecasts, weather data, plant availability information, market prices, settlement records and correspondence with TEIAS or the distribution company.

6. Can solar and wind plants claim compensation for curtailment?

Potentially, depending on the reason for the curtailment and the applicable legal mechanism. Renewable status alone does not create an automatic right to full compensation.

7. Can emergency grid instructions result in compensation?

The answer depends on the applicable market and contractual rules. Emergency instructions are recognized within the system operation framework, and their legal consequences should be distinguished from failure to provide contractually committed transmission capacity. (EPIAS)

8. Should foreign investors investigate curtailment before buying a power plant?

Yes. Historical curtailment frequency, duration, causes, network congestion, compensation history and planned transmission investments can materially affect project valuation and future revenue.

9. Can repeated grid curtailment be challenged legally?

Potentially. The investor should first identify the legal basis of the restrictions, determine whether contractual capacity rights have been breached, examine regulatory compliance and preserve detailed evidence of each curtailment event and resulting loss.

Legal Support for Power Plant Curtailment and Generation Loss Claims in Turkey

Grid curtailment can materially reduce the expected revenue and investment value of a power plant. The legal consequences depend on whether the restriction resulted from legitimate system operation, balancing instructions, unavailable committed transmission capacity, discriminatory treatment, infrastructure deficiencies or another legally actionable cause.

Fırat Fesih Kaya Law Office provides legal assistance to foreign investors, international energy companies, renewable energy developers, lenders and power plant owners in TEIAS and EMRA disputes, electricity generation loss claims, grid curtailment matters, transmission capacity disputes, system use agreements, energy project acquisitions and administrative litigation.

If your solar, wind, storage, hydroelectric or other electricity generation project has suffered repeated production restrictions or significant generation losses because of grid constraints in Turkey, you may contact our office for a project-specific legal assessment. Early legal and technical analysis can help determine whether contractual compensation, regulatory remedies, administrative proceedings or additional damages claims may be available.

Phone: +90 312 434 22 22
Mobile Phone: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
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