The Legal Nature Of Energy Storage Agreements And The Obligations Of The Parties

I. INTRODUCTION

Energy storage systems are structures developed to address the intermittency inherent in renewable energy sources, ensure security of electricity supply, and enable the efficient use of generated energy. As such, they have become one of the fundamental components of the energy transition.

The imbalance that arises when renewable energy generation does not coincide with demand may, within the framework of traditional market mechanisms, lead to economically disadvantageous outcomes such as selling electricity at low prices and purchasing it at high prices, while also creating arbitrage opportunities. At this point, energy storage systems increase system efficiency by enabling surplus generation to be stored and injected into the system during periods of high demand, while also offering investors a predictable and sustainable operating model.

Although the energy storage market in Türkiye has not yet fully evolved into an independent and distinct market structure, it can be stated that the legislative infrastructure governing storage activities has largely been established in parallel with the increase in renewable energy investments and the widespread adoption of self-consumption and net-metering-based models. Energy storage agreements executed within this framework are shaped, on the one hand, by public law regulations and the supervision of administrative authorities, and on the other hand, give rise to rights and obligations under private law between the parties. Due to their atypical nature and the lack of settled practice in Türkiye, this article has been prepared based on the common characteristics of energy storage agreements currently used in practice

II. FUNDAMENTAL PRINCIPLES

1. Which Legislation Applies to the Formation of Energy Storage Agreements?

Although energy storage agreements are private law contracts, they are heavily influenced by public law regulations due to the public service dimension and the strictly regulated structure of the electricity market. The following legislation is primarily taken into account in the formation and performance of such agreements:

• Electricity Market Law No. 6446
• Electricity Market Licensing Regulation
• Electricity Grid Regulation
• Regulation on Storage Activities in the Electricity Market
• Principle decisions and board decisions issued by the Energy Market Regulatory Authority (EMRA)

In particular, the amendments published in the Official Gazette dated 29 December 2025 and numbered 33122 have clarified and rendered more predictable various issues, including the scope of energy storage activities, licensing regimes, integrated storage applications with generation facilities, and market activities, thereby significantly eliminating uncertainties encountered in practice.

From the perspective of private law, the general provisions of the Turkish Code of Obligations No. 6098 (“TCO”) and the principles applicable to unnamed contracts apply. Furthermore, as the parties to energy storage agreements are generally real or legal persons operating commercial enterprises, the provisions of the Turkish Commercial Code No. 6102 may also become applicable depending on the circumstances of the case, particularly with respect to commercial transactions, merchant status, the principle of the prudent merchant, and commercial default.

2. What Is the Nature of the Relationship Between the Storage Service Provider and the Generation Facility Owner?

When evaluated in terms of the operation of the energy storage agreement and the principal obligations of the parties, the relationship between the storage service provider and the generation facility owner is based on reciprocity and the allocation of responsibilities.

The energy storage service provider is obliged to allocate the storage capacity to the use of the generation facility owner and to keep such capacity continuously available, technically operational, and accessible throughout the contract term. In this respect, the storage service provider ensures the continuity of energy storage activities and the security of the electricity system.

Conversely, the generation facility owner is obliged to supply the energy to be stored, pay the storage fee, and grant a power of attorney to the storage service provider, where necessary, to obtain permits and carry out procedures required for the performance of the contractual activities. Through these obligations, the generation facility owner ensures the realization of the energy storage activity and the achievement of the economic purpose of the agreement.

Accordingly, the relationship between the parties constitutes a reciprocal structure in which the technical and operational obligations of the storage service provider are supported by the financial and energy supply obligations of the generation facility owner.

3. What Are the Obligations of the Energy Storage Service Provider?

The obligations of the energy storage service provider are aimed at fulfilling the technical and economic purpose of the agreement. In addition to the framework drawn by legislation, these obligations are shaped by contractual practice and international energy project precedents, and may be summarized under the following main headings:

Installation and Delivery of the Storage Facility: The performance of energy storage activities depends on the existence of a storage system that enables the electricity generated at the generation facility to be stored and injected into the grid when necessary. Accordingly, one of the principal obligations of the energy storage service provider is to install and deliver, in a ready-for-use condition, a storage facility that is compatible with the technical characteristics of the generation facility and the installation site, compliant with applicable legislation, and capable of fulfilling the contractual purpose. This obligation includes the design, construction, and commissioning of the storage facility in a manner suitable for the intended use of the generation facility owner.

Although this obligation resembles the contractor's obligation to create and deliver a work under contracts for work regulated under Articles 470 et seq. of the TCO, it differs from a classical contract for work in that the storage service provider undertakes to make available a facility capable of achieving a specific result without transferring ownership. In this respect, the installation and delivery of the storage facility constitutes a unique obligation specific to energy storage agreements. In certain agreements, the storage facility is delivered as installed and ownership is transferred to the generation facility owner, in which case operation and maintenance obligations are assumed by the owner.

Allocation of Storage Capacity: One of the core obligations of the energy storage service provider is the allocation of the agreed storage capacity (dedicated capacity or contracted capacity) for the use of the generation facility owner. The provider undertakes to make available, continuously and accessibly, a capacity enabling the storage of a certain amount of energy throughout the contract term. The allocated subject is not the storage facility itself, but the right to use a specified storage capacity, which also forms the basis for determining the storage fee.

This obligation cannot be characterized as a transfer of a right of use similar to lease agreements, nor as a mere activity or duty of care under service contracts. Rather, the storage service provider undertakes, as a result obligation, to ensure that the agreed storage capacity remains technically and functionally available. Failure to maintain availability gives rise to contractual breach and liability. Where the generation facility owner fails to supply energy for storage, creditor's default under Article 106 of the TCO may occur. Accordingly, the allocation of storage capacity is a sui generis obligation unique to energy storage agreements.

Provision of Operation and Maintenance: Following installation and delivery, the storage service provider is obliged to commission the facility, keep it operational throughout the contract term, and perform periodic maintenance and repairs. The operation obligation is continuous in nature, while maintenance constitutes a periodically performed obligation.

These obligations aim to ensure continuous availability of the facility, prevent failures, avoid performance losses, and enable proper performance of the storage service in line with the contractual purpose. In practice, compliance is assessed based on availability levels, agreed performance criteria (such as capacity, efficiency, and response time), and adherence to good engineering and operating practices.

4. What Are the Obligations of the Generation Facility Owner?

Balancing in the energy market refers to maintaining the instantaneous supply-demand equilibrium between electricity generation and consumption, thereby ensuring system stability and reliability. The obligations of the generation facility owner constitute essential obligations that ensure the reciprocal and functional nature of energy storage agreements.

Payment of the Storage Fee: Payment of the storage fee is the primary obligation of the generation facility owner and confers the onerous nature of the agreement. The storage fee is generally a fixed amount based on capacity. The storage service provider's entitlement to the fee arises not from actual use of capacity, but from its allocation and availability. Accordingly, the obligation to pay arises even if the capacity is not used.

This obligation resembles payment obligations in continuous performance contracts rather than lump-sum payment obligations under contracts for work. Failure to pay may entitle the storage service provider to suspend performance and activate interruption mechanisms provided under the agreement.

Energy Supply: The supply of energy to be stored constitutes another contractual obligation of the generation facility owner. The storage service provider does not undertake any energy generation obligation; the energy is generally supplied from the owner's own generation. Failure to supply energy, supply at incorrect times, or supply in violation of technical criteria constitutes a contractual breach. Non-supply may render the agreement ineffective and may qualify as debtor's default under Article 125 of the TCO. Where improper supply causes damage to the facility, the owner's fault must be taken into account in determining liability.

Power of Attorney: In practice, the generation facility owner grants a power of attorney to the storage service provider to obtain permits, approvals, and make regulatory applications. This relationship is governed by the provisions of the TCO on agency. The agent must act within the scope of authority, in the interest of the principal, and with due care, while the principal must bear the legal consequences of acts performed within authority.

5. Legal Characterization of the Agreement and Applicable Provisions

Energy storage agreements are not explicitly regulated under the TCO and therefore constitute unnamed contracts. Although certain obligations, such as facility installation, resemble contracts for work, the overall structure does not fully correspond to any regulated contract type. While the predominance of result obligations brings the agreement closer to contracts for work, the obligations exceed classical boundaries and exhibit a sui generis nature.

Accordingly, the primary source for determining applicable provisions is the agreement itself. Where the agreement is silent, judicial interpretation and supplementation based on the principle of good faith and sectoral customs apply. Provisions of regulated contract types may only be applied by analogy where appropriate.

III.CONCLUSION

Energy storage agreements are a developing contract type with significant technical elements that enhance renewable energy efficiency and supply security. Within the current legislative framework, such agreements should be recognized as sui generis, and the rights and obligations of the parties should be regulated in a detailed and predictable manner. In particular, clear determination of capacity allocation, performance criteria, and liability regimes is of critical importance in preventing potential disputes in practice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.