Wednesday, March 10, 2010

Nuclear Power Plant in Sinop Turkey

Dear Colleagues,

Reuters announced today that the Turkish state power company Elektrik Uretim (EUAS) will sign a nuclear energy cooperation agreement with South Korea's Kepco, a Turkish energy ministry source said on Wednesday.

The agreement will cover cooperation with South Korea for a planned nuclear power plant on the Black Sea at Sinop.

Construction of nuclear infrastructure could start in the short-term, said South Korean Deputy Prime Minister Young Hak Kim, speaking at a Turkish-South Korean business conference in Istanbul.

Turkey wants to build two nuclear power plants to reduce dependence on foreign energy imports and cover a looming shortfall in electricity for an economy that grew by an average of six percent a year between 2003 and 2008.

Ankara's nuclear plans suffered a setback late last year when a Turkish court annulled a 2008 tender, won by Russia's Atomstroiexport, Inter Rao and Turkish Park Teknik, citing problems with the pricing of electricity from the proposed plant.

Ankara has been in talks with Moscow since January over a possible intergovernmental agreement that would hand Russian firms the licence to build a separate plant at Mersin on Turkey's Mediterranean coast.

Numerous Turkish and foreign firms have also expressed an interest in any nuclear tender.

Half of Turkey's power plants are fired by natural gas, of which Turkey has few reserves, and the country faces a chronic power shortage without annual investment of between $3-5 billion, analysts say.

The government sees atomic power meeting 20 percent of Turkey's power needs by 2030. Turkey has cancelled four previous attempts to build a nuclear plant, beginning in the late 1960s, due to the high cost and environmental concerns.

It is your writer's sincere feeling that the ongoing Nuclear Power Plant Construction Policy is not appropriate nor correct.

Turkey is simply not ready for such a huge project with lack of qualified personnel. The lack of qualified local personnel is one angle ignored, but another one is the mismanaged de-grading/ aging power plants already operational. We can't even operate nor rehabilitate the existing thermal power plants properly.

Most of the Turkish contracting firms are not capable of anything but laying the groundwork of the plant site, and handle simple mechanical site installations. It is our feeling that our public employees do not have experience for project management and contract management of such gigantic project.

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

Russian and Korean parties do not care these commercial details with luxury of full government backing.

Russian, and Korean references are not so proven technologies nor the latest forth generation in the commercial international markets. Russian and Korean companies might come to dominate the nuclear energy sector, a sector that was supposed to reduce Turkey's dependency on overseas resources.

They may 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 overnight contract decision is too short for a comprehensive evaluation and careful risk analysis for a nuclear power station in that size and output. Hence the contract documents are not made yet public, and the information available is also not so commercially sound.

These are all state secrets, and there is no transparency. We need to be too careful on what we are going the get in the end. We may not be pleased with the end product.

Nuclear Power plant contracts which would be a sort of “I did it my way” scheme will be signed between government to government agreements. However parliament approval sessions is expected until the general election which is 17 months ahead from today.

Your comments are always welcome

Haluk Direskeneli, Ankara based Energy Analyst


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