Wednesday, February 24, 2010

USAK Lecture by U.S. Ambassador Glyn Davies

What do you think about Turkey’s own nuclear power plant efforts, do you think that Turkey can survive without her own nuclear power in this geography?

There is something happening all over the world. Some people call it dramatically a nuclear renaissance; they are talking about the world going from 350 nuclear power plants to as many as a 1000 by the end of the century. Nuclear power, and president Obama spoke of this in the State of the Union categorically not very long ago, has to be part of the solution to the world’s big problems. Development, we need energy for development and there is no question about that. But then also climate change and global warming; nuclear power is for all the challenges that can come with it in terms of waste and so forth that we think are salvable. Nuclear power has to be part of the next solution here. So there is a world coming where I think what we will see is more civilian nuclear power plants that are constructive and I think Turkey ought to be part of that, and I know Turkey is looking very closely at getting into that game and I would encourage that, especially given the fact that Turkey, nobody doubts Turkey’s bona fides. This is for a very huge nation, big industrial base, you need energy and nuclear is an excellent source of so called base load energy so I would encourage the pursuit of that.

Who will enter Turkey first, the Russians or the United States?

I don’t know the Turkish scene, I apologize for that but it’s up to Turkey. It has to make sovereign decisions and some of those will be based on commercial considerations. It’s up to Turkey to decide with whom they deal and cooperate with and who they make arrangements with and make commercial purchases with. The truth is, like a lot of sophisticated technologically advanced industries, it’s become very international so it’s a little bit different to say will it be Russia or the U.S. These are big multinationals and very often these plants being built, they have components of technologies from all parts of the world. Like even a car today that is built from bits and parts from all over the world and this is tremendously similar. So I can’t predict whether it will be Russia, or America or France. It will be whoever works best for Turkey.

Turkey's Anadolu Group in talks with tential energy partners

Asli Kandemir - 22.02.2010

Anadolu Group wants to boost installed power capacity to more than 2,000 megawatts and is talking to potential partners about energy activities, said Tuncay Ozilhan, chairman of the conglomerate.

Turkey's power consumption looks set to rise 4-6 percent this year, but the lack of major recent power infrastructure investment has given rise to worries that Turkey's electricity production capacity may not be enough to cover consumption.

Beer-to-energy group Anadolu plans to build a 1,200 megawatt coal-fired plant in northern Turkey and to invest $150 million in a 90 megawatt hydroelectric power plant in Georgia, which could begin operating in 2014.

The Turkish government wants to cut the state's role in energy, where it controls about 80 percent of generation and capacity, and has resumed privatisations of power grids.

Turkey's Privatisation Administration last week auctioned off four power grids for a total of $1.53 billion.

Analysts and government sources say the European Union candidate country needs to attract between $3-5 billion in investment annually for the next five years if it does not want to suffer from blackouts amidst higher consumption as the country's economic activity starts rising again this year.

Turkey's energy sector has drawn considerable foreign interest in recent years, with players such as Verbund and CEZ entering power production, but the global downturn has slowed investments. Last month Ozilhan said he expected total growth for Anadolu Group of 5-6 percent in 2010.

Source: Reuters,

Tuesday, February 16, 2010

Privately Operated Thermal Power Plants in Turkey

Dear Energy Professional, Dear Colleagues,

In Chamber of Mechanical Engineers, we have initiated to list the important big size (>35MWe) thermal power plants in operation, in construction and in project design phases in the local market. Public owned thermal power list was relatively easy since it was tabulated by EUAS and details were made public. It was hard to find the design parameters of privately owned thermal power plants. In order to collect the latest figures for the private enterprises, we have sourced the latest information which are released in EPDK and their own web sites. Here is the latest list,

Thermal power plants currently in operation, in order of magnitude,

EnkaPower Natural Gas fired Combined Cycle Power Plant, in Adapazari, Gebze, Izmir Aliaga, with total 3830 MWe
Isken Sugözü, Evonik+ Oyak JV, imported coal (6000 kcal / kg LHV) conventional thermal power plant with total 1320 MWe
Aksa Kazancı Holding Antalya, Natural Gas fired Combined Cycle Power Plant in Selimiye and Kovanli villages with total 1150 MWe
Baymina Ankara Suez, Natural Gas firing Combined cycle power plant with total 770 MWe
Chayırhan ParkHolding, local minemouth coal (2800 kcal / kg LHV) firing conventional thermal power plant with total 4x160 MWe
Tekirdag Uni-Mar IPR, Natural Gas fired Combined Cycle power plant in Tekirdağ with total 480 MWe
Tekirdag Trakya Elektrik Gama Holding, Natural Gas fired Combined Cycle power plant with total 478 MWe
SABANCI EnerjiSA, Natural Gas fired Combined cycle power plants in Adana-Mersin, Çanakkale-Izmit, with total 455 MWe
Zorlu Energy, Natural Gas fired Combined Cycle, in Bursa, Lüleburgaz, Sincan, Kayseri with Total 420 MWe
Bisash Bursa Natural Gaz fired Combined Cycle Power Plant with total 410 MWe
Akenerji Natural Gas fired Combined cycle, in Yalova, Bozöyük, Çerkezköy, Izmir, Alaplı with Total 357.6 MWe
Entek Electric/ Koç Holding, Natural Gas fired Combined Cycle Power plant, in Bursa, Izmit Total 300 MWe
Habash LNG fired Combined Cycle in Izmir with total 300 MWe
KARABIGHA  imported coal firing (6000 kcal / kg LHV) CFB thermal power plant with 2x135 MWe
OvaElektrik Çolakoğlu NaturalGas firing Combined Cycle power plant, 253 MWe
Doga Energy Esenyurt Istanbul, Natural gas fired combined cycle power plant with total 180 MWe
Silopi / Shirnak ParkHolding, local Asphaltite firing CFB thermal power plant with 135 MWe
Enda Energy, Natural Gas fired Combined cycle Power plant in Antalya OIZ with total 94.38 MWe
Ayen Ostim Ankara, Natural Gas firing combined cycle power plant with total 35 MWe

Thermal power plants in construction with >50% investment spending

Eren Holding Çatalağzı, imported coal (6000 kcal / kg LHV) conventional thermal power plant with total 1360 MWe
Bandirma EnerjiSA SABANCI, Natural Gas firing Combined cycle power plant with total 900 MWe
Borasko Samsun Natural Gas firing Combined cycle power plant with total 800 MWe
RWE Turcas Denizli Natural Gas firing Combined cycle power plant with total 775 MWe

Thermal power plant projects under leasing scheme,

Çankırı Orta, ÇALIK Energy 100 MWe
Bolu Göynük Aksa Enerji 150 MWe
Tekirdağ Saray 300 MWe
Bursa Keles (cancelled)
Adana Tufanbeyli EnerjiSA 450 MWe
Soma-C, 2x300 MWe (at tendering stage)
Afsin Elbistan C-D-E (at tendering stage)

We wish all success to our private thermal power plant operators, and investors in their works. With Deepest Regards.

Haluk Direskeneli, Ankara based Energy Analyst,

Sunday, February 14, 2010

New 1360 Mwe TPP investment in Çatalağzı

Dear Colleagues,

A local investment holding company announced last Sunday in Hurriyet Daily News that they placed total 1.6 billion US Dollar investment in Zonguldak Catalagzi thermal power plant, and they created 3500 new jobs, of which 1500 of them would be workers from China.

The project won award of year 2009 from Project Finance magazine of EuroMoney group.

Investment decision is given in year 2008, and construction initiated in year 2008. Project is financed by local Guaranty and Isbank.

They have 3500 workers at site for plant construction. First unit with 160 MWe is completed. Second and third units each with 600 MWe are in construction and expected to be completed later this year. Upon completion of total 1360 MWe, the new plant will generate 5% of total Turkish electricity generation capacity.

Coal will be imported from Ukraine. In order to unload the incoming imported coal, the investor company has built the Black Sea's largest port next to the plant with an investment of 220 million dollars. 180 thousand-ton coal capacity ships will bring coal from South Africa, Colombia, Brazil. Plant will need 3.5 million tons of coal per year.

Chinese company CMEC has received the order for second and third units, which will consist of Power Island covering steam boilers and steam turbines. 1 billion 50 million dollar portion project finance is covered by local Guaranty Bank and ISBank.

It was the biggest loans for each of these financing entities. There is no Treasury counter guarantee in this project financing.

We need to evaluate the new plant investment from a broader perspective. Since its cheaper cost in comparison to many alternative fuels, convenience for use, and absence of problems related with storage, the demand for natural gas, which entered the Turkish energy sector from late 1980s onwards, has increased its use up dramatically.

Despite high amounts of natural gas consumption, there is no active gas storage facility in our country at this time. The biggest factor in the increase in natural gas consumption is that the generation of electrical energy is mostly dependent upon imported natural gas.

Initially natural gas was very cheap. Combined cycle power plants firing natural gas were also cheap in unit installed capacity and their construction period were quite fast compared to other power plant constructions.

Now natural gas is NOT so cheap. Our Northern neighbor increased its unit price tremendously. Price is unbearable now. It is a real threat against our national security.

Our eastern neighbor cuts the natural gas flow each New Year putting the force majeure clause as “Act of God”, although it’s their own decision in order to put more pressure on our local government in international politics.

In Turkey, nearly 65% of the imported natural gas is used for generating electricity, and hence 55% of generated electricity is based on natural gas.

We have an enormous energy supply risk on our energy business. That is not because of natural gas but also huge amount of imported coal for our thermal power plants.

“Clean Coal” expression may not be oxymoron anymore, thanks to new modern technologies. However “Imported Coal” is an oxymoron expression. Coal should not be imported. Coal Exporting Countries would certainly be delighted to find countries to export their coal.

Countries should be clever not to import the coal. Desperate countries with limited local fuel resources are to be clever not to import that dirt whatever the desperation is.

Coal is not a fossil fuel only; it comes with its ash, unburnable materials, plus radioactive elements with huge health hazards. That is also import of CO2 emissions which will make you under burden against Kyoto Protocol. Global warming is very sensitive issue.

There was a time when European and U.S. coal producers worried that imported coal might threaten their domestic industry. Several large U.S. companies today own shares in foreign coal mines and sell imported coal in the United States and other countries.

From the customer’s point of view, imported coal has been an option for power plants or industries situated well for delivery-- usually at attractive prices—but some have been reluctant, or found infrastructure lacking in the tidewater.

Here we are close to Russian and Ukrainian coal suppliers. On the spot market, South African coal sold out for the year; now it appears South American coal is no longer available. Initially, consumers gave Colombian, Venezuelan, and Indonesian coals a second look because of good prices, because they offer low- and very low-sulfur products, and because they offer some supply diversity.

Prices are currently more volatile in international coal markets, but the low-sulfur coals from South America and Indonesia can in the longer term help keep some domestic mines producing. The two coal types can be blended to “manufacture” blends that meet the emission limit of 1.2 pounds of sulfur dioxide per million Btu, or just to keep it within ranges covered by emission allowances. Because of their Btu levels, some imported coals also react well in reducing nitrous oxide emissions.

Local private companies may be too eager to make partnership with foreign companies to construct new thermal power plants on our beautiful sea shores since imported coal is cheap at first. But who would guarantee the cheap coal prices forever.

Initially we were all expecting cheap natural gas prices for the long term in our feasibility studies. Natural gas is not cheap anymore. Moreover Natural gas has huge energy supply risk.

Imported Coal also has the same energy supply risk as well as environmental hazards. Although our Energy Markets Regulatory Board and the Ministry both keep low profile in licensing the imported coal applications in the local market, we visualize that our local public authorities as well as our local NGOs put high profile reaction to avoid in Imported Coal firing new thermal power plants.

The first thermal power plant firing Columbian imported coal is built in Sugozu seashores of the Mediterranean coast despite of resistance from engineering and other civil organizations.

We visualize the local public reaction to new imported coal firing thermal power plants in Iskenderun Bay, on the Aegean and Mediterranean coasts.

European Union advised their members to utilize their local indigenous lignite to the fullest maximum extent whatever would be the cost. EU furthermore advises its own members to make more investments on renewable energy resources.

The other hand, imported coal has currently reasonable prices in the spot markets,

Now in Richards Bay South Africa FOB coal price is more than 86+ FOB US Dollars per ton

and in Rotterdam ARA coal market for 6000+ kcal/kg LHV, it is now more than 81+ FOB US Dollars per ton, as of last week.

We calculate and compare the US Dollar coal price per 1-million BTU heat capacity gross based. That is 1.75 USD per 1-million BTU for Afsin Elbistan, and 4.24 US Dollar for imported coal, 10.40 USD for natural gas at market figures.

Compared to local mine-mouth prices of less than 8 US Dollars per ton for 1150 kcal/kg LHV in massive Afsin Elbistan lignite mine premises, there is almost no reasoning for imported coal fired thermal power plants in future.

It is our sincere feeling that those investors who dare to invest in “imported coal firing thermal power plants” would have difficulties, and should consider high calculated risks, and high unforeseen cost/ risks in their technology selection, project finance and overall project execution.


We have to reduce dependence on imported fuel/energy that also includes imported coal
We have to reduce energy consumption by improved energy efficiency,
We have to employ maximized local engineering and local qualified work force at all times,
We have to produce more energy from our own local energy resources, wind/ hydro/ local lignite,
We have to develop most efficient processes and use the best technologies CFB, IGCC where applicable, within our own engineering capacity,
We have to control our CO2 emissions to reduce climate change and dangerous health effects,

Though it is late, but as saying goes "It is never too late to mend".

Your comments are always welcome

Haluk Direskeneli, Ankara based Energy Analyst,

Thursday, February 11, 2010

Zonguldak refuse disposal TPP investment

Dear Energy Professional, Dear Colleagues,

Governor Erdal Ata of Zonguldak province, announced yesterday that 400-ton daily municipality garbage will be disposed/ fired in new thermal power plant investment and the plant will create heat and power, which will be financed by Erenco energy and investment subsidiary of Erdemir Iron and Steel works, within the commercial coverage of ZONÇEB Zonguldak and surrounding municipalities private investment union entity.

400 tons municipality refuse is collected per day in Zonguldak. After firing in an appropriate thermal power plant, 90% of MSW refuse will be converted into heat and power generating 10% ash neutral to dispose into ash dam or even utilised in cement and ceramic industries.

It is also advised that for the establishment of such thermal power plant is not within financial capability of ZONÇEB, however the investor Erenco will investigate local and financial sources for project financing with support of Ministry officials.

At this time, wild dumping of municipality is the current procedure for waste disposal. That is too dangerous. Contagious material is released to the environment, land and sea both in municipality waste disposal land near Catalagzi.

Governor Ata, continued to speak as follows:

"Erenco, an engineering and investment subsidiary of Erdemir, called us about a month ago, and they advised that they are constructing a thermal power plant for municipality refuse disposal in Baku Azerbaijan. They can also do the same thing here in our own cities, starting with Zonguldak, their home city."

Erenco also made a presentation about the technical details of the proposal. Project and development ideas are fine with the city pubic administration. However Erenco is only interested in the engineering portion of the scope.

So they created the project and expect ZONÇEB to participate into project financing. They advised that they have no financial power as to ZONÇEB has. The project is expected to cost around 25-30 million euros to fire the complete municipality refuse and furthermore to generate approximately 15 MWe electricity output.

Their investment budget may be too small compared to 90 million Euros world market estimations based on 150,000 tons per year at 600 Euros per ton.

Erenco and Erdemir could handle the local in-house engineering, contracting and plant operation. Zonguldak ZONCEB is expected to solve the financial support and project financing at this point.

This will be a great opportunity for municipality refuse disposal systems in thermal power plants in other provinces. Plant will employ approximately 100 local engineers and 1000 qualified workers for 2-3 years of engineering and construction period, and further 40-50 qualified workers during plant operation in future. So in the end, parties decided to apply to Ministry of Energy and other public regulatory administrations for appropriate licensing, EIA approvals and support for project financing.

We are pleased to learn such good news and hope to have similar developments in future in other provinces for refuse disposal thermal power plant constructions with maximised local engineering and local employment.
Your comments are always welcome
Haluk Direskeneli, Hamburg based Energy Analyst
Click to join EnergyNewsletterTurkey

Click to join EnergyNewsletterTurkey

Free Blog Counter