Saturday, December 01, 2007

A Personal Evaluation of Nuclear Energy in Turkey- 2007

Dear Energy Professional, Dear Colleagues

Those of the 1968 generation will recall that there was a “Nuclear'' division in the METU Mechanical Engineering Department along with “Heat” and “Mechanics”. There were many graduates with BSc, MSc, and even PhD degrees from the “Nuclear” division, all of whom were confident that they could design, build, and operate nuclear power plants.

There were also students from other Middle East Countries, Pakistan, even several from Iran, studying together with their Turkish colleagues. The Iranians had a thick Azeri Turkish accent at the beginning, which was lost in time, replacing it with smooth daily Turkish, making them no different than our own local nationals. When they graduated, they returned to their countries, and worked on their careers.

In Turkey, several METU graduates started working at the Turkish Electricity Authority, Nuclear Energy Department, but throughout the years, Turkey could not keep pace with the requirements of the nuclear age.. No serious development could be established in Turkish Nuclear energy plans except serious corruption news in Turkish Nuclear tenders. Then, the IMF asked the government to stop work on nuclear energy tenders since that activity put high financial risk on the Turkish Treasury. Working in nuclear energy planning ceased in the early 2000s.

The Nuclear Energy Division of the Turkish Electricity Authority, which was created in early 1960s, was also closed and its mostly METU graduate engineers were either transferred to other departments or left the establishment. Almost 40 years has passed since 1968, which were exciting for METU graduates. What do you think those METU ME Nuclear graduates have been doing since 1968??

Some of the Turkish graduates formed their own private companies in the energy sector. Most were very successful in their own private businesses. They constructed high capacity coal mine transfer systems in thermal power plants, some completed mechanical installation works in thermal power plants, others completed site installations abroad, especially in the Middle East Countries as well as in the Central Asian countries.

Some formed their own plants in order to make fabrication of steel structures for industrial installations, some worked in public enterprises, in the Ministries. They were promoted to high, prestigious public posts and private positions; and many of them went abroad to earn their livelihoods and pursue their own careers. Some of them worked in nuclear power plants in those foreign lands and occupied high-level positions in the USA, Canada, Switzerland nuclear power industries.

Some of the Iranian national METU graduates worked on their own nuclear industry in Iran. Today we all know that Iranian METU graduates cover the decision-making posts of the top management levels in the Iranian nuclear business. They construct, design, build and hopefully will soon operate nuclear power plants in Iran.

Whatever is said on Iranian business environment, you may criticize their products, their outputs, their political environment or else, but you should evaluate carefully the latest stage that they have reached in their own nuclear technology.

Today, Iranian nuclear technology is somewhat the product of METU Mechanical Engineering Department Nuclear Division of the 1968s.

Same is true for Pakistan. It is not secret that there are many METU graduates in Pakistan working for the national nuclear industry as well as other energy business, hydro, thermal, renewable energy.

We wish the great human resource of METU Nuclear division graduates could have been utilized to establish the local nuclear power plants in Turkey and solve our prevailing energy problem.

We shall enter into a serious energy crisis in 2008-2009, which is agreed by all parties. Our big players of public and private enterprises have foreseen the bottleneck. They had meetings one after another. Turkish energy market is not so easy to deal with as well as not so profitable. It is a very tough sector. It is a very difficult market. Public enterprises cannot make new investments, since they have no financial resources to allocate andno money to spend.

Nobody wants to make new big investments, just because our energy market lost its bankability, its reliability in the financial markets. International investors are reluctant to make investments; they do not want to finance any project, since they foresee high risk.
Because of that high risk, they calculate a high interest rate.

Why our energy markets/ projects are not “bankable”? The documents created to finance the new energy projects are not “bankable documents”. They are not internationally acceptable and recognized “bankable documents.” Our legal framework is not fully developed and not properly tested yet. Very few investors show interest on new energy projects. If you ask any international reputable company to prepare any proposal for your new energy project, you cannot get their response. The pre-feasibility / feasibility documents are not in international standards.

Public tenders are not bankable; they ask impossible clauses, so these are not bankable.

The feasibility documents prepared in the local market for billion US Dollar projects are created at low cost, at low quality, and hence they are not acceptable if not miserable.

Today go to any reputable International Engineering Company, ask a proposal for any of your energy projects, and see if they respond.

You are at the mercy of Eastern World/ Indian- China- Korean companies, or Canadian Candu, if you eliminate USA and French companies due to unnecessary international disputes of the near past.

Eastern World companies are newcomers to the international nuclear energy business, at low prices with their own developing/ untested technology.

We should not exaggerate the nuclear power plant requirement. 5000 MWe tender for nuclear power plant is an exaggeration. It will create pure foreign domination.

Turkey hasn’t been able to create her own technology in nuclear energy business up to now, even though

we had sufficient staff/ human engineering/ intellectual power in 1968s.

Turkish companies could not create high value-added energy products in energy business for her own local market to generate cheap energy,

not only nuclear technology.

We even cannot construct our own thermal power plant, not even simple coal firing plants. We are not talking about a space shuttle, those are just a number of steel tube fabrications. ,

Our own local private companies cannot cover the scope other than “civil works, foundations, and site installation”, they operate at so low profit margins, with low value-added levels, based on unqualified or semi-qualified labor work.

Nobody wants to leave that unqualified or semi-qualified labor work to foreign companies, local workers resist to foreign participation as in Kazakhstan, Ireland, Gulf.

We still hope that we can complete huge tasks with so little early preparation,

We still think that we can handle/ create “bankable feasibility documents” at low cost with in-house excel sheets.

This writer, a veteran of energy business for more than 30 years, has occupied seats at the foreign side of the negotiation table many times in the past.

Foreign parties come to the negotiation table well prepared with all calculated risks of the subject project, they make serious and expensive “due diligence” works, they spend serious money for that early preparation, they evaluate the project risks carefully.

When they receive your "In-house prepared so-called bankable feasibility document"

They will advise that they will carefully review the document

That review will not be finalized for years

And you wait for their final decision in years and years

Turkish people should realize that they should create their own technology

They should support their own human resources, more funds to be allocated to R&D, higher salaries should be paid for young engineering graduates, more software and hardware supplies should be acquired

Believe me that our young engineering graduates are no different than those of their counterparts in the reputable foreign companies. In some of foreign engineering companies, there are even high level managers / directors with Turkish origin

Nuclear power plants are basically a kind of improved thermal power plants. There is one cycle more. You have to employ higher safety measures, and solve waste problem appropriately. We can consider further advantages of a nuclear power plant in energy security. It is also good to train your people on nuclear technology, on nuclear safety, on nuclear awareness.

Your geography imposes your foreign policies as well as your energy policies. In your geography you have no luxury of staying anti-nuclear, in nuclear free environment. You need to develop your own nuclear technology, educate your nuclear intellectual power, train your staff/ your human resources. By being an anti- nuclear activist, you cannot learn details of the nuclear technology. You learn by doing as elsewhere as always.

We should also appreciate that nuclear technology is a very dear, very
precious, very expensive issue. It is not free of charge. It is not even possible to get only with bare money as in the case of thermal power generation.

The level of development in your own country in Nuclear technology will obviously warn other parties that you are no longer at the vulnerable developing stage but in the high tech league. That has also a deterrence factor for the rival parties to think twice for any action they take against you.

If you do not wish to give any concession in your foreign policy, then you should depend on your own talent at a lower and independent cost. You can only get it through your own hard work by employing your young talents with their latest scientific and intellectual capability.

It is also a matter of survival of the fittest in this region.

Final wording, as the old saying goes, “If you think you can, you can.”

Your comments are always welcome. Thank you & best regards


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