How They Do It: Turkey A Country Case Study

11February 2014

A Country Case Study

Turkey's first NPP project is based on a build-own-operate model.

Story Resources

• IAEA Infrastructure Meeting: Newcomer and Expanding Countries Face Similar Challenges, 11 February 2014
• How They Do It: Belarus
• How They Do It: China
• How They Do It: Turkey
• In Focus: Nuclear Power: Status and Outlook
• Listen to this story

Interview with Necati Yamac, Head of the Nuclear Energy Project and Implementing Department of the Turkish Ministry of Energy and Natural Resources.
Why did Turkey opt for a Build-Own-Operate (BOO) model instead of models that were used elsewhere?
Turkey has a thriving economy and a fast-growing electricity demand that increases 6-7% annually. We had four attempts in the past to introduce nuclear power: the first one was in the late 1970s when the Akkuyu site was licensed and the last one was in 2008 when Turkey issued a request for bids. In 2010, Turkey and the Russian Federation signed an agreement on the construction and operation of a NPP at the Akkuyu site based on a BOO model. This is the first time that such an approach is implemented in a nuclear power project. The Akkuyu Project Company has been set up under Turkish law and will be the future owner and operator of the NPP and the electricity generated by it. The Akkuyu Project Company is 100% owned by Russian investors, at least initially.
The BOO model has been successfully implemented in other energy projects. From our perspective, the BOO model allows newcomer countries to benefit from the human resource capacity of the technology provider country for the short term and may save time in developing its nuclear capacity in the long term.
What do you think are the strengths and the challenges of this model?
The BOO model may help in ascending the steep learning curve that a newcomer country faces when implementing its first nuclear power project: the future workforce in embarking countries comes from either a nuclear research group, which has to quickly learn the challenges of implementing a big industrial project, or from an existing utility, that would be faced with the challenges of a nuclear power project. The Akkuyu Project Company is quite unique in this respect because of the possibility to recruit staff and benefit from the knowledge of its shareholders with experience in design, construction and operation of NPPs.
The financial risk is left to the project company, which enters into contracts with its own shareholders for the design, construction, operation and maintenance of the future NPP. The interest of the investor and future owner is therefore closely aligned with that of the technology provider, a factor that may help minimizing delays.
How will Turkey ensure regulatory oversight over the project?
The model has challenges as well: in theory, the nuclear infrastructure of the country needs to develop at the fast pace of the nuclear power project schedule, in particular the regulatory infrastructure that supports licensing of the plant. But in our case, the Turkish Atomic Energy Authority (TAEK), which is the nuclear regulator in Turkey, will hire consultancy services for reviewing the license application. In addition to that, it is recruiting additional staff and cooperating closely with the IAEA and other bilateral partners. It has decided to engage an experienced Technical Support Organization from a nuclear power country to support the review of the project documents.

-- Interview by Marta Ferrari, IAEA Department of Nuclear Energy
http://www.iaea.org/newscenter/news/2014/csturkey.html