IAEA Support for Building Nuclear Power Infrastructure

24 September 2014 – IAEA Vienna

Understanding the National Requirements

for a Build-Own-Operate

Nuclear Power Project

Necati YAMAÇ

Head of NEPIO

Ministry of Energy and Natural Resources

TURKEY

Content

Nuclear in Turkey After 50 Years Delay

BOO Model in Akkuyu NPP Project

Advantages and Challenges

National Requirements

Conclusion

2

NUCLEAR IN TURKEY

AFTER 50 YEARS DELAY

3

Electricity Generation

46% Natural Gas

25 % Hydro

24 % Coal (Hard

Coal+Lignite)

3 % Fuel-Oil 2 % Other Renewables (Wind+Jeothermal)

4

Energy Import for Electricity

Generation

98 % 92 %

20 %

0

20

40

60

80

100

Natural Gas Fuel-Oil Coal

Total dependency: 73%

5

Electricity Demand

239 TWh/yr

500 TWh/yr

0

100

200

300

400

500

600

2012 2023

Forecast Electricity Demand in 2023

6

GDP Projection

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1989 1994 1999 2004 2009 2014

GD

P (

10

00

x$)

GDP&Electricity Demand

-7

-2

3

8

13

18

1970 1975 1980 1985 1990 1995 2000 2005 2010

Pe

rce

nta

ge

(%

)

Economic Growth Electricity Demand Growth

* General Directory of Energy Affairs, MENR

Population Projection

45

50

55

60

65

70

75

80

85

90

1986198819901992199419961998200020022004200620082010201220142016201820202022

Po

pu

lati

on

(m

illi

on

s)

Year

84 million @ 2023 (estimated) Ref: TÜİK

Renewable Energy Capacity

246 TWh

500 TWh

230 TWh

2013 Electricity demand 2023 Electricity demand target Electricity supply potential fromrenewable energy sources

Tender Attempts

Date Events

1956 Atomic Energy Authority established

1976 Site licence for Akkuyu granted by TAEK

1977-1980 The tender cancelled

1982-1985 The tender cancelled

1986 TEK Nuclear Energy Department closed

1996-2000 The tender canceled after 8 postponements

2007 Nuclear Energy Law (5710)

2010 The tender cancelled

11

BOO MODEL IN AKKUYU

NPP PROJECT

12

CAPEX : 20 billion US $

Reactor Type : VVER-1200 (AES-2006)

Power Capacity : 4800 MWe (4 units)

Operation Time : 60 years

PPA : 15 years / %50 of electricity

Model : Build-Own-Operate (BOO)

Akkuyu NPP Project

13

IGA articles defining BOO

Russian Party:

Financing and insurance

Engineering-Procurement-

Construction

Operation & Maintenance

Fuel supply

SF and RW Management

Decommissioning

Turkish Party:

Allocation of Akkuyu site

Interconnection with

national transmission grid

PPA agreement for 50% of

electricity – remaining

electricity to be sold by the

Project Company in free

market

14

Parties are:

Rosatom on the part of the Russian party,

MENR on the part of the Turkish party.

The Parties shall cooperate for the cooperation areas (25 items).

Turkish Party shall take all necessary measures to facilitate the

grant of all licences and approvals

IGA articles defining BOO

15

BOO model – Turkish party Ministry of Energy &

Natural Resources

(MENR)

Turkish Electricity Transmission

Company

Turkish Electricity Trading and

Contracting Company

Energy Market Regulatory Authority

Turkish Atomic Energy Authority (TAEK)

Ministry of Environment &

Urbanism

Project Company

Owner & Operator

Owner of Electricity

Monthly coordinating meetings of TAEK, MENR and APC

Turkish Electricity Generation Company

PPA

Grid Connection

Allocation of NPP site

EIA decision

Site, construction and operation licenses

Electricity Generation License

AFAD Disaster&Emergency

Managment Presidency

Emergency Preparedness and Response

16

PPA Agreement

17

Power Purchase Agreement (15 year for each unit) 45 year

%50 Electricity

OPEN MARKET

%50 Electricity

TETAŞ (Turkish state

wholesale unit)

12,35 US cent/kWh

Spent Fuel and

Waste

Management

Fund Decommissionning

Fund

0,15

US cent/kWh

0,15

US cent/kWh

APC (Akkuyu Project

Company)

APC (Akkuyu Project

Company)

%100

Electricity

OPEN

MARKET

Turkish Tresuary

Every Year

%20 of APC Profit

ADVANTAGES AND

CHALLENGES

18

19

Advantages

No financial risk on host country

(investment by vendor country – no sovereign guarantee)

Transfer of foreign capital to host country

(Project company 100% owned by vendor country)

Vendor country’s experience in EPC contracts

20

Advantages

Development of capacity in:

- Human resources,

- Localization,

- Regulatory framework.

21

Challenges

Low possibility for developing HR and localization

22

Summary Issues Advantages Disadvantages

Financing + Allocating all risks - Fixed price of electricity?

(change in law) + No treasury guarantee

Technical issues

+ Sustainable operation

(availability of fuel, parts

and services) - Less opportunity in HR

and localization + Spent fuel management

(take back option)

+ Decommissioning

Legislative framework + Cooperation for

licencing

Educational capacity + NPP training, education

- Less opportunity to

utilize local educational

capacity

NATIONAL REQUIREMENTS

23

24

What we have

Strong government support:

IGA (higher position in legislative hierarcy+protection)

Prime Minister’s Decree,

Development Plans.

Rapidly established effective coordination mechanisms with

relevant organizations through a large number of meetings and

other communication channels (NEPIO):

at forefront in Turkish public authorities

first door for the Project Company (1000 meetings in 4

years)

Project Company: Turkish Company but Russian Capital

25

What is required

Nuclear energy policy document

Nuclear safety, security and safeguards,

Environmental protection and RW management,

Emergency preparedness and response,

HR management

Stakeholder involvement and transparency,

Nuclear fuel cycle,

Industrial involvement,

Nuclear energy law

Ratification of international conventions

Development of regulatory framework

26

Conclusion

3. The aim of the BOO Model is not to generate electricity in

Turkish territory

Increasing capacity of;

Local industry,

Human resources,

Regulatory framework.

BOO Model’s advantages for newcomer countries come from

three aspects:

1. Financing (construction)

2. Experience (construction, operation, decommissioning)

27

THANK YOU

Necati YAMAÇ

nyamac@enerji.gov.tr