Nuclear power plant, an expensive project
Both the AK Party and President Recep Tayyip Erdogan place great importance on energy investments. Minister of Energy and Natural Resources, Berat Albayrak, recently set the goal of making Turkey an active participant in energy policies.
Akkuyu is our first nuclear plant project. The agreement regarding the project was signed in the parliament in 2010, establishing Akkuyu Nukleer Guc Santrali (NGS) Elektrik Uretim A.S. The company was pre-licensed to produce power for 36 years. Subsequently, 250 Turkish youth were sent to Russia to be educated on nuclear power.
The ground breaking ceremony for the project took place in 2015 and the first unit was expected to be operational after 7 years.
To raise 49 percent of the total cost of the $20 billion project, a partnership was made with Cengiz-Kolin and Kanyon consortiums. But in the end, there was no deal. Now, there is the possibility of Elektrik Uretim A.S. (EUAS), an affiliate of the Ministry of Energy and Natural Resources, to become a partner with a 49 percent stake.
Akkuyu Nuclear Power is expected operate four units, each with a capacity of 4.8 GW, and is expected to produce 35 billion kWh when completed.
Currently, Turkey has a capacity of 83 GW. Our annual power production is approaching 300 billion kWh. Our power production increases by 5 to 6 percent on average every year. When the Akkuyu plant starts producing power, its share in total power production will be around 5 to 6 percent.
The Turkish state has committed to buying half of the 35 billion kWh power Akkuyu will produce at 12.35 U.S. cents for 15 years, regardless of demand, while the average sell price for power today is below this figure.
Thus, the inescapable reality is this: the nuclear power plant is an expensive project. It requires $20 billion of investment. The supply-demand dynamics of 2010 have changed. Turkey has made large scale investments to produce electricity from a variety of sources. Since 2014, installed capacity has increased from 69.5 GW to 83.1 GW. Power production has increased from 251 billion kWh to 288 billion kWh.
Speaking at a summit on energy investments, President Erdogan said: “We invested $6 billion in the energy sector. Thanks to these investments, we have a power capacity of 6,500 MW including solar power, hydroelectric power, wind power, geothermal power or biomass and fossil fuel plants. The share of power production with local sources soared up to 49.3 percent.”
This is clearly a success but it will also require investors in nuclear power plant projects to evaluate their investment decisions once again.
Additionally, it will take time until the plant starts producing power at a moment in history when the future of nuclear power is debatable. The trend is toward local resource dependent power production, and prices are dropping.