Timur Ersoy's Blog

Turkey – Russia Energy Relations in the Framework of Akkuyu Nuclear Power Plant

May 15, 2018
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Turkey has been getting ready to experience the nuclear energy after numerous adversities. The foundations of Akkuyu nuclear power plants were laid 3rd times on April 10, 2018 with the participation of President of Russia, Vladimir Putin. Before the main foundation, sides came together for the foundation of the harbor of the power plant on April 14, 2015 and for the foundations of energy blocks on December 10, 2017 with participation of Alexey Likhacev, Director General of ROSATOM and Turkish officials. Agreement of Akkuyu nuclear power plant was signed on May 12, 2010 by Taner Yıldız, Minister of Energy of Turkey at the time and Igor Sechin, Deputy Prime Minister of Russian Federation of the period. The project which just has been put into practice is one of the most controversial issues in Turkey's agenda and an interesting challenge for the future of Turkey-Russia relations.

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Photo credit: Milli Gazete

Articles of the agreement on Akkuyu nuclear power plant are criticized a lot by Turkish public opinion, unfortunately but rightfully. Turkish government is accused of privileging to Russia regarding the construction and operation of Akkuyu nuclear power plant. Among all these opposing views, sides came into an agreement in 2010. According to the agreement, financing of the project is provided by Russian investors, mainly by subsidiaries of ROSATOM up to 93%. Moreover, ROSATOM, its subsidiaries and Turkish side, consisting of a consortium and government assistance, established a project company named Akkuyu Nuclear JSC. Ownership of the company is divided of 51% to 49% in favor or Russian side. Activities of the company are limited by Turkish laws and decrees and strictly prohibited from threatening national security of Turkey, in theory. Reactor supplier is JSC Atomstroyexport which is one of the sub-companies on nuclear construction of ROSATOM. Atomstroyexport also received the field of Akkuyu nuclear power plant for free. However two members of Turkish consortium (CKK) which consists of three dominating companies of Turkish energy and construction sector, Cengiz Construction, Kolin Construction and Kalyon Group, have withdrawn from the project due to uncertainties and financial disaccord with ROSATOM. Also, pricing of production and buying criteria are in the eye of the storm. Turkish side signed under purchasing agreements which Turkish Electricity Trade and Contract Corporation (TETAS) guarantees to buy approximately 50% of electric power production from 4 reactors for 15 years. Determined price for purchase is 12.35¢/kWh which is more expensive than Turkey's current deals. Therefore, the Turkish government has been facing numerous expostulations for jeopardizing national wealth. Besides, environmentalist concerns have been raising voice day by day against the project and this situation throws the sides, mostly Turkey, to the wolves. Many local and international foundations declared their opposition to the construction of the nuclear power plant whereas European Union demanded from Turkey to cease the project. Even though this call was deemed as a political concern towards the convergency of Turkey and Russia, they based their questions on soil explorations and inexperience of Turkey in front of a possible accident. Moreover, due to the geographical location of Mersin, Mediterranean see is determined as the cooling source which will be used by Akkuyu nuclear power plant. As it is widely known, Mediterranean see is one of the biggest tourist attractions in Turkey that hosts millions of tourists in its coastline. Presence of Akkuyu nuclear plant is accused of threatening local habitat and human life in the region. Even construction of Akkuyu nuclear power plant has been stopped many times by the protests of local people of Mersin with the participation of Greenpeace due to given reasons.

Positive Expectations from the Nuclear Power Plant

One thing is certain that Russian side surely benefits from the project with helps of privileges and binding articles of agreement for Turkey. On the other hand, the technical reason that Turkey decided to cooperate with Russia on such kind of radical action is Russia's experience and capability which promotes the latest technology for the nuclear power plant. Akkuyu Nuclear Power Plant will use the 3rd generation VVER-1200 (AES-2006) reactor design from Russia. Developed on the VVER 1000 (AES-91) architecture, which is used by Bulgaria, Finland, China and India, this reactor type offers the latest nuclear safety and radiation leak prevention measures. The estimated life of the reactor is 50 years. The Akkuyu nuclear power plant, which will consist of 4 reactors each of 1200 MW capacity, will generate an annual average of 35 billion kilowatts of electricity when it reaches the capacity of 4800 MW. Akkuyu nuclear power plant, which is expected to meet 8.06 percent of electricity demand at the beginning of production, is expected to meet 6.2 percent of demand in 2030 and 3.8 percent in 2040 when demand is expected to rise in the same way. Moreover, promises on technology transfer is another way to benefit for Turkish side which is not deemed as experienced in this field. In this context, mutual benefits may help to improve Turkey-Russia energy relations if they are not interrupted by another diplomatic crisis, as we witnessed a few times in recent history.

Unstable Relations

To understand the fluctuations in Turkey-Russia relations through the recent history, Akkuyu nuclear power plant may be given as a great example. The frustrating process which arose straight after the plane crisis between Turkey and Russia on November 24, 2015 affected the deals of nuclear power plant just like tourism sector of Turkey (of course the impact was significantly bigger in this context due to enormous share of Russian tourists in activity of Turkish tourism sector) and import of vegetables and fruits from Turkey to Russia. Concordantly, ROSATOM officially stopped the construction of Akkuyu nuclear power plant immediately in December 2015. At that time, the situation was intensely strained and seemed like it would not be settling down. As a matter of fact, Russian authorities were willing to abolish the project completely but they could not take steps through that due to heavy indemnity provisions of the agreement. Also, Turkish students which were studying in Russia via nuclear exchange program to train potential personnel for Akkuyu nuclear power plant faced several problems even including to be forced to return to Turkey. However, former allies managed to turn the situation upside down by mutual compromises, especially straight after Turkish President Recep Tayyip Erdoğan's apologies and condolences to the family of the pilot who died in downing plane. All of these attempts caused the relations go under a normalization process. Also, the assassination of Russian Ambassador to Turkey, Andrey Karlov, was expected to have a bigger impact than the plane crisis on Turkey-Russia relations but both of the countries administrated the situation cold-bloodedly and prevented manipulations in this context. Notwithstanding, if differences of opinion and external factors, especially brought out by Syrian dilemma may cause another crisis between the countries or not, it is unpredictable in today's conjuncture.

Conclusion

Nuclear technology is already subjected to be abolished in most of the developed countries. It is very unfortunate for Turkey that the country is obliged to experience technological developments from behind the times because of inability to move forward and inadequate system of education. Moreover, binding agreements that compel Turkey to buy electric from Russian side with Dollars while devaluation of Turkish Lira is accelerating make the country be at a disadvantage in this context. On the other hand, it is necessary to take steps even though Turkey has gotten out of technological mobility which is one of the essential exigences in today's globalized world. If Turkey and Russia manage to preserve their pleasant relations in following years with helps of Akkuyu nuclear power plant by benefitting in terms of productivity, technology transfer and strategic partnership regarding energy trade, advantages of the nuclear power plant will be focused much more than its disadvantages.
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