Turkey's nuclear dawn approaches

By bne IntelliNews April 30, 2013

David O'Byrne in Istanbul -

It's a well-accepted maxim among Turks, that in Turkey things take longer than they do elsewhere.

As long ago as the 1960s when Europe was investing heavily in nuclear power plant to meet fast growing demand, Turkey's top technical universities began offering courses in nuclear engineering aimed at training the engineers who would develop the country's own planned nuclear power sector. Some 45 years on and those graduates may finally have the chance to put their learning into practice as plans for a new 4.8-gigawatt (GW), Russian-designed plant in Akkuyu finally appears set to make it off the drawing board following a $20bn agreement between the Russian and Turkish governments signed in 2010.

That deal allows for the construction of four units of 1.2GW each, complete with a guaranteed offtake price of 12.35 US cents per kilowatt hour (kWh) for 70% of the power produced by the first two units for 15 years and for 30% of the power produced by the third and fourth unit for the same period.

Although still subject to strenuous opposition from environmental and other opposition groups, who warn of the possible dangers of the Akkuyu site being close to areas of known seismic activity, few now seem to doubt that the plant will be built. And according to Rauf Kasumov, deputy CEO of the project company Akkuyu NGS AS, they have little to worry about. "Normally for the site of new nuclear plant, you would contract one independent company to conduct a site study, we used three," he says, explaining that in addition to a local and international company, Akkuyu NGS parent Russia's Rosatom also contracted Turkey's state seismic laboratory at Kandilli to give the Akkuyu site the once over. "All three gave the same result, the site in absolutely safe," he says.

The vetting process continues with the project company due to submit its Environmental Impact Study for assessment by the end of May, with Turkey's environment ministry obliged to respond within three months. A positive result, explains Kasumov, would allow the company to apply for both a generating license for the plant and a construction permit to allow building to commence. "We don't expect any delays, but anyway it will be another 18 months before we pour the first concrete as we have to level the site first," he says, adding that if all goes to plan, the bulldozers should begin work in September this year.

With the first of the four 1.2GW units expected to be completed in 2019, after testing and fuelling the first power should be generated in 2020. Following that, the company envisages commissioning a unit a year with the full 4.8GW expected on line by 2024.

Long-term solution

Given the length of time before power from the plant is available, Akkuyu is not intended to meet Turkey's current pressing need for either more installed capacity, or to diversify away from increasingly expensive imported natural gas, which at times of peak demand has been used to generate as much as 51% of Turkey's power and supplies of which are currently limited. Rather it is part of a long-term strategy, aimed at meeting future demand which is growing at up to 8% a year and which current projections indicate will require at least 9.5GW of installed capacity by 2021.

At the same time, Akkuyu and the two other nuclear plants that Turkey wants to construct will provide an alternative to gas-fired plants, which are still expected to make up the bulk of the country's installed capacity as new sources of gas become available.

With many analysts predicting that the huge volumes of gas expected to become available from Iraq and the Caspian Sea basin over the next decade will help reduce gas prices and make power from gas-fired plant cheaper than that from nuclear, the offtake guarantees awarded to Akkuyu have been widely criticised by opponents of the project who claim that the guarantee of 12.35 US cents is too generous. "Power prices in Turkey have been rising steadily and we believe that the free market price will be about that level by the time we start generating," says Kasumov, pointing out that aside from guaranteeing supply of a hefty volume of power, the agreement affords other significant benefits to Turkey.

These include a 20% share of the plant's profits after the 15-year guarantee period is over and full training for over 600 engineers and bureaucrats who will operate and maintain the plant, and oversee Turkey's nascent nuclear power sector.

But the biggest benefit, he contends, is the contribution that the plant will make to long-term relations between Turkey and Russia. "We are close neighbours - it's very fruitful to have good relations with your neighbours," he smiles.

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