Power market developments / New-build

A case study of a Russian international project: Turkey's Akkuyu project

3 December 2012

Turkey is one of the most dynamically-developing countries in the world, with high potential for growth. The growth in production and demand for electricity in Turkey are comparable with those of more developed world economies. In 2000-2012 the average annual growth in electricity demand was 6% (up to 7-8% per year over a shorter period). By this indicator Turkey is second only to China. If generating capacity is not expanded, there could be a significant electricity deficit as early as 2013. Therefore, construction of NPPs is one way of meeting growing demand for electricity.

Another important factor in the decision to build an NPP in Turkey was the need to diversify sources of electricity; at present, natural gas accounts for about 45% of generation in Turkey. One of the goals of Turkey’s 2009 power sector strategy is to reduce the share of gas generation by increasing the share of renewable sources of energy up to 30% by 2023 (including hydro-generation) and bringing in nuclear power up to 5% by 2023. In addition to the Akkuyu NPP, the strategy envisages further construction of two nuclear plants – Sinop NPP on the shores of the Black Sea (four units with a total capacity of ~4.6-5.6 GW) and Igneada NPP (four units with a total capacity of ~4.6-5.6 GW).

The Akkuyu NPP project [see schedule, 1] encompasses construction of four VVER-1200 units (NPP-2006) with a capacity of 4.8 GW. The location for the Akkuyu NPP, in Mersin province on the shores of the Mediterranean, was chosen back in the 1970s, although the NPP was not built at that time due to economic reasons. In 2011, the Akkuyu project company conducted independent engineering survey on the site seismology [2], which confirmed that the Akkuyu area is one of the least seismically-active in Turkey.

The project has commenced on the basis of the inter-governmental agreement between Russia and Turkey of 12 May 2010. The planned construction period for the four units is 2011-2023.

Initial financing is being provided by the Russian side. The key shareholder—Rosenergoatom—is a subsidiary of Rosatom State Corporation. It holds 93% of the project company shares. INTER RAO UES and JSC Atomstroyexport hold 3.5% each, and JSC Atomtechenergo and Atomenergoremont hold 0.1% each. Eventually, up to 49% of shares may be transferred to other investors. The total cost of the project is not to exceed USD 20 billion, with a payback period of about 19 years, and a total operational lifetime of 60 years. Work is now underway to find strategic investors, although this task is expected to be completed once a full-scale construction at the site begins.

Under the inter-governmental agreement (IGA), the project will be executed based on the Build-Own-Operate (BOO) model, when the project company undertakes to design, build, operate and maintain the plant.

The IGA contains a requirement for the state-owned power sales company TETAS to purchase a fixed amount of electricity (70% of electricity from units 1-2 and 30% of electricity from units 3-4 respectively) for 15 years from the date of commercial launch of each of the 4 units at a weighted average price of US cents 12.35 per kWh. The planned electricity output for the four units is at least 33.1 billion kWh per year.

Akkuyu NPP will require changes in Turkey’s energy grid, in particular the construction of network infrastructure and transmission lines. The company is currently working with Turkey’s national grid company TEIAS on developing a master plan for network infrastructure.

Another part of the agreement between the two countries is educational exchange. The second group of Turkish engineering students recently travelled to Russia to begin their studies. In 2011, 50 students went to Russia to study nuclear engineering [3]. They will go on to study at the Atomic Energy Institute of the National Research Nuclear University MEPHI. They will study to get a bachelor’s degree, and then a master’s after a further two years of study, and then work as interns at Russian NPPs for 1-3 years, after which they will return to work at Akkuyu.

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This article first appeared in the November 2012 issue of Nuclear Engineering International magazine.

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