Çayırhan Thermal Power Plant: Privatization And Future Challenges – OpEd
The Çayırhan Thermal Power Plant (A), a coal-fired power station with a capacity of 3×210 MWe, began operations in Ankara in 1987. In 2000, the plant was transferred to Park Termik, owned by Turgay Ciner. After the expiration of the 20-year Operation Rights Transfer Agreement on June 30, 2020, the plant was returned to the state. Now, its land and mining areas will be sold as a whole to interested buyers.
In 2019, a new lignite mine was expropriated for a proposed (B) expansion project, but the project was canceled and its license revoked due to economic infeasibility.
When the operating rights of the plant were first transferred, the company that took over continued to run it. During this period, larger electrostatic precipitators (ESP) and a new flue gas desulfurization (FGD) system were installed. Despite these upgrades, the plant has faced increasing scrutiny from both economic and environmental perspectives.
The Privatization Administration has once again put the sale of the Çayırhan Thermal Power Plant on the agenda. The plant, along with its assets, coal-supplying mines, and equipment, will be sold via a sealed bid and auction process. However, since it is a publicly-owned asset, the sale is likely to face opposition.
Globally, the shift away from fossil fuels has significantly reduced interest in coal-fired power plants. Financing and manufacturing of new equipment have become increasingly difficult, and the economic sustainability of such plants is declining. In the past, privatized coal plants were unable to cover their costs under market conditions, surviving only with state support. The future of the Çayırhan Thermal Power Plant remains uncertain in this context.
Challenges of Privatization
While the privatization of plants like Çayırhan implies a withdrawal of state involvement in the energy sector, the process is fraught with challenges. Fossil fuel-based energy production faces growing environmental pressure. Increasing carbon emissions targets and climate change policies impose serious restrictions on the operation of such plants. Moreover, new owners of privatized plants must comply with costly environmental regulations, a factor that can deter potential buyers.
Economic Sustainability Issues
Coal-fired power plants have lost their cost advantage in energy production. With the advancement of renewable energy technologies and improvements in energy storage systems, traditional energy sources like coal are becoming uncompetitive. Additionally, the modernization and environmental compliance upgrades required for older plants like Çayırhan present costly and uncertain risks for investors.
Future Energy Policies and Alternative
Although Turkey is heavily dependent on foreign energy sources, investments in renewable energy are rapidly increasing. Solar, wind, and hydroelectric projects are emerging as cheaper and more sustainable alternatives to fossil fuels in the long run. Potential buyers of the Çayırhan Thermal Power Plant will need to consider future energy policies and market dynamics when making their decisions.
The future of the Çayırhan Thermal Power Plant is closely linked to Turkey’s energy policies. The plant’s privatization and its subsequent role in the energy sector will need to be closely monitored, both from environmental and economic standpoints. Renewable energy projects may eventually replace such coal plants, but the speed of this transition and how existing facilities will be repurposed depend on the priorities of the country’s energy policies.
