An EU-Turkey working group on energy is expected to meet for the first time on 17 January in Ankara. Representatives of the European Commission's DG Energy and of the Turkish Ministry of Energy and Natural Resources will identify gaps and bottlenecks in Turkish legislation with regard to the EU acquis. The EU will raise questions on two draft laws on the reform of the electricity and gas markets, while approving the steadily progressing liberalisation of the Turkish energy market. On the supply side, Commission representatives will seek a commitment by Ankara to connect the trans-Anatolian gas pipeline (TANAP) to the European market. The second meeting of the working group will be held in Brussels.

Turkey's electricity market is considered largely in line with EU standards. A new law sent to parliament but not yet being debated sets out rules for a system of licences for suppliers and distributors. This follows a resolution of the Electric Market Regulation Authority (EMRA) on legal unbundling from September last year. As of 1 January this year, distribution companies have to perform generation and wholesale operations under separate legal entities. The draft law on the electricity market also establishes a state-owned, later to be partly privatised, Energy Exchange Market (EPIAS). By doing so, the Turkish government aims to cut prizes for consumers and attract foreign investors to the domestic energy market. High energy prices and taxes on fuel have become a political liability for the government, with two crucial elections scheduled in 2014.

However, the EU side, as well as business consultants in Turkey, are concerned that the draft law on the electricity market might curtail...

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