The Future of Nuclear Power in Emerging Markets: Turkey


Turkey_image01Turkey is one of several countries in the Middle East region that is developing a nuclear energy program.

Turkey’s energy demand increased rapidly over the last few years, due to accelerated economic development and regional influence. With a growing population of technology-savvy youth, energy demand will likely overwhelm the current mix of domestic and imported energy supply. This projected energy deficit, as well as the desire for greater energy independence from its traditional suppliers, has led Turkish officials to conclude that additional nuclear plants are essential to meeting current and future energy demand.

At present, the country’s energy supply gap is widening. Domestic production represents a mere quarter of the current energy mix and shows no signs of significant increase in the short term. Turkey relies heavily on external actors to fill the bulk of its energy demand with imported petroleum and natural gas. At this pace, the International Energy Agency (IEA) expects Turkey’s imports to double in the next ten years.

>>Forum on Energy reported on the future of nuclear energy in Turkey last year. Below, we provide an updated look at the status of nuclear energy, and some of the complexities in the country’s current energy mix.

Turkey_image02Energy trade in the region is complicated by increasing diplomatic obstacles constraining Turkey’s traditional energy suppliers. Historically, the majority of its oil imports have originated in Iran (see chart below), but current financial and trade sanctions have crippled the Iranian economy, affecting its oil exports. External pressure from Western countries has mounted on Turkey to be wary of the isolated and — some would argue — desperate regime. With Iran threatening to close the Strait of Hormuz despite U.S. and Israel warnings of military repercussions, as well as potentially destabilizing regional security through involvement in the Syria conflict, Turkey has signaled its strong desire to diversify its energy mix and deal with more stable actors.

Turkey_image03Similarly, Iraqi and Russian energy supplies to Turkey face erratic or uncertain futures. Iraq and Russia repeatedly cut supply shipments in the 1990s and 2000s as a result of political instability or conflict. If the supply continues to falter, it has the potential to destabilize Turkey’s energy supply and stoke adverse economic effects both domestically and internationally.

Turkey_image06

At present, energy insecurity could significantly impact Turkey’s fragile energy balance, which is based on limited natural resources and variable energy supply.

 

Turkey’s Nuclear Background

On November 21, 2007, Turkey enacted its “Law on Construction and Operation of Nuclear Power Plants and Energy Sale,” allowing it to establish procedures for building nuclear facilities and selling electricity generated by nuclear plants. (OECD)

There are no commercial nuclear plants currently operating in Turkey, despite the country’s long history with nuclear technology. In 1956, the country established the Turkish Atomic Energy Authority (TAEK) when Turkey built a research reactor. It operates within Istanbul Technical University.

 

Akkuyu: Turkey’s First Proposed Commercial Nuclear Plant

After several starts and stops in the 1990s and 2000s, Turkey’s first commercial build is the proposed Akkuyu plant, in Büyükeceli, Mersin Province. It will house four 1,200 MWe units, produce 35 billion kilowatt-hours per year, provide electricity to 13 million people and produce 17 percent of the country’s energy supply. Under a 2010 agreement between the Government of the Russian Federation and the Government of the Turkish Republic, Akkuyu NGS Elektrik Uretim Corporation (APC: Akkuyu Project Company), a subsidiary of Rosatom, will construct and operate the plan under the ‘build-own-operate’ model. Under this scheme, APC owns the plant and will ultimately be responsible for its operation, waste disposal and power sales. APC must seek out investments and financing terms for the initial construction and sell 49 percent of its stock to private parties — believed to be Turkish investors — after the initial 15 year term expires.

In July 2013, APC submitted an initial environmental impact report to an independent commission. Construction will begin in late 2013 with the reactors scheduled to be operational by 2019. Costs were originally estimated at $20 billion, but Russian sources recently reevaluated the total amount as closer to $25 billion.

Click here for a timeline of the developments surrounding the Akkuyu plant.

 

Developing a Second Plant: Turkey Values Japan’s Advanced Technology

Turkey had been in talks with Japan about developing a second nuclear plant, but these were delayed by the 2011 disaster that struck the Fukushima Daiichi reactors. Dialogue between the two countries resumed in July 2011 and a nuclear cooperation agreement was signed on March 23, 2012.

Taner Yildiz, Turkey’s Minister of Energy and Natural Resources, reportedly told the Japanese Nikkei Business Daily that each of the three countries — Japan, China and South Korea — under consideration to build the next nuclear power plant in Turkey were equally favored, but that Japan’s high technology credentials made it a potentially attractive partner.

 

Sinop

On May 3, 2013, Turkish Prime Minister Recep Tayyip Erdoğan and Japanese Prime Minister Shinzo Abe signed a $22 billion deal on Turkey’s second nuclear plant project to be located in the Black Sea province of Sinop. An international consortium will include Japanese firm Mitsubishi Heavy Industries Limited, French company Areva and another Japanese entity, Itochu, to build the plant. It will be operated by French firm GDF SUEZ and Turkish Electricity Generation Company Incorporated (EUAS), while a joint venture involving Japanese and Turkish companies will sell the power to local utilities.

The reactors, named ATMEA1 after the Mitsubishi/Areva consortium, are Generation III+ type pressurized water reactors featuring a capacity in the 1,100 MWe class. Tentative plans to complete the first reactor at Sinop aim for 2023, when Turkey will celebrate its centennial anniversary as a republic, with full operation of all four reactors targeted for 2028.

 

Down the Line: A Third Plant?

In May 2013, Energy Minister Taner Yildiz confirmed Turkey’s interest in building a third nuclear power plant, with the hopes of gathering the technology and expertise to construct the majority of the plant using domestic resources. While details remain fluid and discussions preliminary, reports have the plant located north of the Bosporus channel along the Black Sea coast, but within a short distance from Bulgaria’s border with Turkey.

Despite the fact that growing domestic energy needs are unlikely to be met by the Akkuyu and Sinop nuclear plant projects outlined above, Yildiz said Turkey “will not rush” to decide on the third plant, but hopes to overcome infrastructural and logistical hurdles by 2025, with an aspirational goal of full operation by 2035.

 

Human Resources

Turkey has limited nuclear reactor expertise, but has in place a plan to train a new generation of nuclear plant professionals, with assistance from Russia. Turkey aims to eventually send 600 students abroad. So far, nearly 50 college students have participated in the program and an additional 75 — including high school students — were sent to Russia for nuclear training during the 2012-2013 school year. Under a scholarship program, the students will be provided with transportation to Russia, housing and a monthly stipend.

Additionally, a byproduct of the Japanese/French $22 billion deal for the second plant also includes the establishment of a Turkish-Japanese Technology University, in which Turkey could benefit from Japanese nuclear energy technology.

>>Read more on global nuclear energy markets.