Turkey: Nuclear investment – OpEd
Countries provide favorable environments for energy investments in international markets. These investments have reliable financial systems, solid and trustworthy legal systems, and well educated local technical personnel. The capacity of an energy plant to be built using local fuels or imported coal are determined. Reliable firms at the international level prepare feasibility reports and explore international financing options. Presentations are made to investors and financiers, and once financing is secured, reliable contractor firms enter the scene.
The project begins, electricity is generated, and money collection begins. The life of a power plant is 25 years, but it can be extended with rehabilitations and renewals. However, investors and financiers do not want to wait that long. Usually, the money invested is repayed within the first 3-5 years, and then the ownership of the plant is sold to a local partner.
Similar processes are carried out for all previous investments in natural gas-fired, local or imported coal-fired thermal power plants. However, the investor in the Akkuyu nuclear power plant is following an unusual investment process. The investor is our northern neighbor and they started with an equal local-foreign partnership. However, since the financial capacity of the local partners was insufficient, the lead foreign investor purchased all of them.
The nuclear power plant is a three-cycle thermal power plant. The nuclear core cycle converts heat to steam cycle, and the steam generator produces electricity. Following the nuclear core design, other equipment is in the classic thermal power plant layout and can be purchased from any supplier who has passed certifications.
The investor had simple non-critical civil construction work done by local construction contractors. He produced, brought, and mounted the nuclear core himself. He purchased other classic thermal power plant equipment from different locations with sales credit.
It would not be wrong to say that we are not satisfied with the investments made by our northern neighbor in our country. Projects such as Orhaneli thermal power plant, Seydişehir aluminum facilities, and İskenderun iron-steel facilities resulted in serious problems in our warmer geography, where projects designed for the cold Siberian conditions. These projects needed to be renovated rehabilitated renewed.
There is no public report for this project, financing was provided behind closed doors with intergovernmental agreements, and there are no free market conditions. The application of the governing law is also not specified, there are no internationally recognized contractual terms, and force majeure clauses are not clear. The work started with the acceptances of non-technical people, and delays were experienced.
Every year, one hundred students return to our country after receiving 4-year long nuclear physics education at our northern neighbor’s universities. Maybe some of them married Russian youth. Total Four hundred of these students are still working in public service, and they did not need them during the construction of the nuclear power plant. However, was the education received by these students a serious nuclear design education? The answer is unknown because the students who received nuclear education signed confidentiality agreements and they did not disclose any details.
The strategic location of the Akkuyu nuclear power plant on our southern coast is very important. Along with the nuclear power plant, a sensitive communication center was also established. The Syrian Tartus military port is very close by. What if there are activities here beyond our control? Can there be foreign military initiatives here? Can there be joint activities with Tartus outside of our own territory?
Akkuyu will generate 4800 MWe of electricity for 15 years with a fixed purchase (50%) guaranteed price of 12.35 US cents/kWh. Useful life time is 60 years. Estimated initial cost is 22 billion USA dollars. The amount of money for kwh energy generation paid is insignificant, however we cannot predict where the prices will go. But can such a degree of dependence be acceptable? We accepted it for natural gas, and now we are facing nuclear dependence.
Typical people in Russia are well-educated and emotionally similar to us, but the state structure is repressive and prone to violence. How will we work with these people in a fragile environment and under difficult economic conditions? Difficult tasks await us. Like previous international investors, they cannot just sell everything and leave after five years. This time, the investor is coming to stay for a long time.
