Turkish Nuclear Challenge

Photo: Three-Mile Island, PA, USA

Dear Energy Professional, Dear Colleagues,

General Electric, the world's biggest maker of power generation equipment, still plans to submit a bid to build Turkey's first nuclear power plant even though it will probably miss a Sept. 24,2008 government deadline. (Ref.Hurriyet daily)

GE's nuclear venture with Hitachi Ltd., Japan's third- largest builder of atomic plants, is working on a bid with partners Turkey's Haci Omer Sabanci Holding AS and Spain's Iberdrola SA. Turkey is among governments worldwide leaning toward nuclear power to reduce carbon dioxide emissions, blamed for global warming, as fossil fuel prices surge. (Ref. Hurriyet daily, Bloomberg)

However it is too difficult to receive a sound, reliable, economical proposal on the closing date, 24th September 2008, since tendering procedure is too fast, tender documents are not sufficient in nature. These are not standard, commercially acceptable, market approved tender documents, or better so-to-speak invitation. There are many missing issues, last minute changes/ last minute updates in the invitation such as insurance, counter guarantees, financing credibility, waste management etc.

On the other hand, Ministry rejected requests from four potential bidders to extend the deadline to allow companies to prepare for the auction.

It is disclosed that Toshiba Corp.'s Westinghouse Electric Co., won't bid in the Turkish tender and won't propose its AP1000 nuclear unit. (Ref.Bloomberg)

The government tender is to build a 4,000-megawatt nuclear plant in the town of Akkuyu on the Mediterranean coast to help meet power demand that's rising by eight percent a year.

Turkey will also build a second plant near Sinop on the Black Sea coast. Sinop is a better choice due to lower cooling water inlet temperature, compared to high average sea temperature in Akkuyu, since cold cooling water inlet temperature gives more output for identical plants.

Here are the interested parties who purchased the formal invitation documents,

French-Belgian Suez Tractebel,

Canadian AECL,

Russian AtomStroyExport-ERG consortium,

South Korean KEPCO-Turkish ENKA consortium,

French Vinci-Chinese Nuclear Power Co-Turkish Park Holding consortium,

Turkey’s Sabanci Holding-U.S. General Electric-Spanish Iberdrola consortium,

Turkish Alsim-Alarko,

Turkish Hattat Holding and Belgian Unit Investment-Turkey's Dogan Holding-Anadolu Endustri Holding,

Itochu Corporation (Japan),

RWE (Germany),

Turkish AkEnerji, are expected to bid in the tender.

Under the light of above declarations, it is your writer's sincere feeling that the ongoing Nuclear tender procedure is not appropriate nor correct.

The lack of qualified local personnel is one angle ignored, but another one is the mismanaged power plants already operational. We can't even operate existing thermal power plants properly.

Moreover Turkish contracting firms are not capable of anything but laying the groundwork of the plant site, and handle simple mechanical site installations.

Turkey is simply not ready for such a huge project with lack of qualified personnel.

These missing issues on insurance, necessary credit financing will give unnecessary and unfair commercial advantage to Russian and Chinese parties over reputable western counterparts with proven international references.

Russian and Chinese parties do not care these commercial details.

Russian, and Chinese references are not proven technologies in the commercial international markets. Russian and Chinese companies might come to dominate the nuclear energy sector, a sector that was supposed to reduce Turkey's dependency on overseas resources.

They have other strategic expectations, such as staying at the stronghold strategic seaports of Turkey, Akkuyu on the Mediterranean coast, close to strategic MiddleEast conflict zones, Sinop on the North at BlackSea coast,

The tendering period is too short for a comprehensive evaluations and careful risk analysis for a nuclear power station in that size and output. Hence invitation documents are also not so commercially sound. We need to be too careful,

Your comments are always welcome

Haluk Direskeneli is an Ankara based Energy Analyst