By Cagri ATAC General Overview of Turkey`s Current Energy Market With its growing economy, Turkey is one of the fastest growing ene...
By Cagri ATAC
General Overview of Turkey`s Current Energy Market
With its growing economy, Turkey is one of the fastest growing energy markets in the world. Electricity demand in Turkey has grown twice the economic growth rate in the last 2-3 decades. During this period, Turkey has been the second fastest growing country after China in terms of natural gas and electricity demand [8].
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| Figure 1: Graph of GDP vs Energy Use (gapminder.com) |
Despite the increasing energy demand, Turkey is dependent on foreign energy sources due to its limited natural gas and oil reserves. Turkey currently imports 98% of its total natural gas demand and 92% of the total oil demand and the total energy dependence on foreign sources is more than 70%[8].
Development of internal and sustainable energy sources is the main goal in Turkey’s energy strategy due to high energy dependence and the corresponding energy import bills [8].
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| Figure 2: The Distribution of Installed Capacity by Primary Energy Resources (2007) |
Unlike Middle East and Caspian Sea countries, Turkey is not rich in petroleum or gas. However, it is rich in one of the low cost renewable energy sources, hydro-power. Previous and current governments have given enough importance to hydro-power source. Other renewable sources like wind is also quite important for Turkey and Turkey’s wind power targets include increasing its total installed wind power capacity to 20,000 MW by 2023. According to the 2015-2019 Strategic Plan, which was declared in December 2014 by the Ministry of Energy and Natural Resources, Turkey has the 10th largest installed wind power capacity in the world with its 803.65 MW capacity in 2014, and 5th in Europe after Germany, UK, France and Sweden [8]. Besides, Turkey has modest uranium resources. The Department of Energy, Raw Material and Exploration (MTA) discovered the Temrezli deposit in the central Anatolian region 220 km east of Ankara in the early 1980s. MTA continued to explore the region for the next 10 years.
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| Figure 3: Electricity Prices in Europe |
Figure 3 shows energy prices comparison in Europe. Turkey has comparably low electricity prices even if it is close to European market without national energy sources. Turkey needs to preserve that low prices because one of the national strength that Turkey has is its low cost production ability to European market with its growing automobile industry, textile industry etc. Furthermore, since Turkey’s energy demand is rising faster than EU average, Turkey has to cope with the high energy demand with comparably low energy cost.
It is obvious that Turkey needs an alternative economical solution to coming energy problems. With current overview nuclear proposes a good solution.
Nuclear Power Plant Overview
Nuclear power is already playing a substantial role in the decarbonization of the global economy and currently offers the sole cost-comparable, low-carbon alternative to coal, gas and oil (with the exception of hydro-power, which is not available in all geographies). Despite the cancellation of some nuclear programs in the wake of Fukushima, (e.g. Germany) plans to develop nuclear capacity continue in many western and emerging economies, including the UK, the USA, China and the Middle East. Continuing the debate about the financing, technology, and management of nuclear power projects is therefore paramount if we wish to reduce CO2 emissions while simultaneously satisfying the burgeoning global demand for energy [1].
In over 14,500 cumulative reactor-years of commercial operation in 32 countries, there have been three major accidents to nuclear power plants - Three Mile Island, Chernobyl, and Fukushima - the second being of little relevance to reactor design outside the old Soviet bloc [2].
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| Figure 4: Nuclear Reactors Located in the World [3] |
The economists often use so-called Levelized Energy Costs (LEC) when comparing different technologies. Following table can be given as estimation for comparison purposes.
Power Plant Type Cost $/kWhr
- Coal 0.10-0.14
- Natural Gas 0.07-0.13
- Wind 0.08-0.20
- Solar PV 0.13
- Solar Thermal 0.24
- Biomas 0.10
- Nuclear 0.10
- Hydro 0.08
- Geothermal 0.05
Table 1: Levelized Cost for Different Energy Sources [4]
Nuclear proposes the best solution after geothermal and hydro when we compare the levelized cost. Due to its long lasting life, nuclear investments can be quite economic. With proper upgrades, one power plant can operate more than 50 years. One of the oldest NPP, Oyster Creek NPP, is located in USA and 45 years old. It is expected to work till the end of 2019 [5].
Akkuyu Nuclear Power Plant
Akkuyu Nuklear Power Plant Will be 9th biggest power plant after power plants in France, Kore, Japan and Ukrain [9]. It will have 4 reactors with 1200MW capacity in total 4800MW capacity. In May 2010 Russian and Turkish heads of state signed an intergovernmental agreement for Rosatom to build, own and operate (BOO) the Akkuyu nuclear power plant as a US$ 20 billion project. This will be its first foreign plant on that BOO basis. Rosatom, through Atomstroyexport and Inter RAO UES, will finance the project and start off with 100% equity in the Turkish Akkuyu project company (APC) set up to build, own, operate and decommission the plant [10].
TETAS(The Turkish Electricity Trade & Contract Corporation) will buy a fixed proportion of the power at a fixed price of US$ 12.35 cents/kWh for 15 years, or to 2030. The proportion will be 70% of the output of the first two units and 30% of that from units 3&4 over 15 years from commercial operation of each. The project company on the open market will sell the remainder of the power. After 15 years, when the plant is expected to be paid off, the project company will pay 20% of the profits to the Turkish government [10].
The company expected to commission the first unit in 2021, though in March 2015 the energy minister suggested 2022 as the earliest possible date. In April 2015 at the site inauguration ceremony he said construction would begin at the end of 2016. Some $1.3 billion expenditure on the project was budgeted by Rosatom for 2013 [10].
Possible Risks
In all the media, people are aware of possible risks of storage of the waste or a natural disaster as in the Fukushima or cancer related problems in case of any disaster. However I would like to take your attention to the two other issues that are not taken into consideration.
- Geopolitical Risk
One of the biggest risk that Turkey has is due to its location. Turkey has a special case concerning the Middle East region. This region has been unstable for years and it will be unstable when we consider current Syria, Iraq and Libya situation. Relatively, stable regions from the black sea part are not also very stable Ukraine crises was a big issue lately. Turkey is not inside a friendly environment like in Europe or in USA. Therefore, comparison makes not much sense. However, Lets hope that not something serious will happen at that region as Akkuyu NPP is just 300km far away from Syrian border or 250 km far away Cyprus will be safe for years.
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| Figure 5: Geography of Chaos [7] |
- Worker`s Accidents Rate
Another Risk that comes to mind is labor accidents that may end up with death percentages. That may be a good estimation of how careful and educated the work force is. Comparison of some countries are listed.
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| Table 2: Some countries rate of workers` accident that end up with life loss [11]. |
Last year, Turkey has faced with a very crucial Soma mining accident that ended up with 300 life loss. In the world media that scene is seen as the worst mining disaster in its history, survivors and industry insiders claim that privatization has made the country’s collieries among the most dangerous in the world [12]. A 2010 report by the Turkish Economy Policies Research Foundation (TEPAV) found that the country’s coal mines have claimed more lives even than those of notorious China’s in terms of tons of coal produced, a widely used measurement [12].
“In reality the practice in Turkey is that under qualified companies with ties to the government are winning the tenders,” said Necdet Pamir, a leading Turkish energy expert affiliated with the main opposition party. “They are maximizing profits by cutting wages and safety measures, and this is the cause for tragedies such as Soma.”[12]
Conclusion
Such points makes the nuclear risky when we consider the first BOO Nuclear Power Plant with a recent history of Soma and Turkey’s geopolitical position in the world with its complicated borders. However, it is a fact that Turkey needs to find a good solution to its grooving energy demand problem and Akkuyu may provide a good solution. If it is carefully investigated with educated experts with international know how, if emergency cases are studied well, if security precautions are well taken despite costs and lastly if lessons learnt from history are applied to every step that Turkey takes than it should be a good idea to move with Nuclear Power.
Cagri ATAC is a Switzerland based Mechanical Engineer specializing in Energy Industry, and Management.
References:
- [1] KPMG Global Energy Institute. New Nuclear an Economic Perspective
- https://www.kpmg.com/BE/en/IssuesAndInsights/ArticlesPublications/Documents/New%20Nuclear%20%E2%80%93%20an%20economic%20perspective%5B1%5D.pdf
- [2]http://www.world-nuclear.org/info/Safety-and-Security/Safety-of-Plants/Safety-of-Nuclear-Power-Reactors/
- [3] http://nuclearinfo.net/Nuclearpower/CurrentReactors
- [4] http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf
- [5] http://en.wikipedia.org/wiki/Oyster_Creek_Nuclear_Generating_Station
- [6] http://www.akkunpp.com/
- [7] http://www.democraticunderground.com/10026416378
- [8]http://www.hazar.org/blogdetail/blogs/wind_power_in_turkey_goals_and_realities__1131.aspx
- [9] http://en.wikipedia.org/wiki/List_of_nuclear_power_stations
- [10] http://www.world-nuclear.org/info/Country-Profiles/Countries-T-Z/Turkey/
- [11] http://ijerad.kku.edu.tr/old/sayi_6/5.pdf
- [12]http://www.ibtimes.com/turkey-has-one-worlds-worst-mining-safety-records-experts-say-privatization-part-problem-1585775
- [13]http://www.tepav.org.tr/upload/files/1279030826-2.Madenlerde_Yasanan_Is_Kazalari_ve_Sonuclari_Uzerine_Bir_Degerlendirme.pdf
