Turkey likely on course for first nuclear power plant

ANKARA, TURKEY - The idea of setting up a nuclear power plant in Turkey was first proposed in the 1970s. Since then, for a variety of reasons, such as lack of funds and bureaucratic issues, the plan had been shelved.

It now appears that Turkey's plan of setting up a nuclear power plant is likely to materialize, although the recently concluded tender process remains to be finalized. Taner Yildiz, Turkey's Minister of Energy and Natural Resources, has said that the tender will be finalized in June after discussions in a cabinet meeting; however, it does not appear that the matter is likely to be decided easily.

The price quoted by the only company that has submitted a tender is quite high and the cabinet is unlikely to be able to make a decision easily. Further, the funds set aside for the nuclear power plant have been adversely affected by the global economic crisis.

The government of Turkey plans to set up either a 3,000-megawatt (MW) or a 5,000-MW four-unit nuclear power plant by 2020. In response to a bid invitation offered in March 2008, Turkey's Atomic Energy Board (TAEK) received requests for information from 13 parties. Five consortiums withdrew from the bidding process on the final day.

In September 2008, only the Russian-Turkish consortium comprising Russia's Atomstroyexport and Inter Rao UES, and Turkey's Park Teknik remained in the fray. The consortium offered to build four Russian VVER-1200 pressurized water reactors by 2012 with each reactor generating 1,200 MW of electricity. The VVER-1200 type of reactors is considered to be extremely safe as it can withstand the brunt of even a plane crash.

The project location of Turkey's first nuclear power plant has been selected in the Akkayu district of the Mersin Province on the coast of the Mediterranean Sea.

According to the bid proposal, the selected consortium would own and operate the plant while the Turkish Electricity Trade & Contract Corporation would purchase all of the power generated by the plant for a period of 15 years. According to reports published in January this year, it is estimated that Turkey would pay $86.3 billion for the 415.5 billion kilowatt-hours (kWh) of power generated over the 15-year period. According to September 2008 estimates, the cost of setting up the power plant would be about $10 billion.

While the proposal of the Russian-Turkish consortium meets the technical criteria set by TAEK, the pricing is still a matter of concern. The consortium offered to sell the power to Turkey at a price of 21 cents (US) per kWh but experts have said that this is four times higher than Turkey's current rates. Although the consortium revised the price to 15.33 cents per kWh, the Turkish government has not accepted it so far.

Both the Russian and Turkish parties are trying hard to get the offer accepted and in fact, Russia has already announced that the consortium has won the contract. The announcement has, however, not been confirmed by Turkish authorities. Meanwhile, some of the 13 interested parties who did not submit a bid expect the process to be canceled since there is only one party involved in the process. France is closely following the developments and has expressed its interest in the project.

Certain nongovernmental organizations such as the Electricity Producers' Association, have legally challenged the way the tender process has been carried out and have questioned the high price quoted by the consortium. The Anti-Nuclear Platform and the Chamber of Electrical Engineers have also challenged the tender legally. This factor may serve as a further complication for the Cabinet while making a decision about the project.

Before the tender was framed, many companies had requested that the tender be postponed given the global economic scenario. The economic crisis is considered to be another factor that drove up the quoted price.