Musings on Turkey’s Impending Nuclear Decision

Reuters is reporting that Turkey will make a decision about its second nuclear power plant by this weekend. The Japanese/French consortium is rumored to be the front runner and Turkish media is reporting that Prime Minister Erdogan and Prime Minister Shinzo Abe will sign the agreement during their bilateral meeting this weekend. Below are my intial thoughts on the rumored deal:

  1. The French/Japanese consortium will reportedly build Areva’s Atmea 1100 MW pressurized water reactor. The reactor is an evolutionary design and has not been built before. If the reports are true, this will be the second time that Turkey will have accepted serving as the test-bed for an evolutionary reactor design. Russia’s Rosatom, for example, will build the VVER-1200 at the Akkuyu site. The reactor is an evolutionary design of the current VVER-1000 model.
  2. In the run up to the reported announcement, the Turkish press has reported that France’s recent softening of its resistance to Turkey’s EU process has opened the doors to nuclear cooperation. This narrative is political spin and has very little basis in reality. If the Japan/France consortium is selected, it will be because the two suppliers opted to build the reactors without receiving a Turkish financial guarantee – plain and simple. The EU, I am sorry to say, has nothing to do with it. The only link between Turkey’s EU bid and the nuclear file is that Turkey indicated during its negotiations with foreign bidders that the reactor must meet EU or US safety standards.
  3. The deal would vindicate Ankara’s peculiar financial demands. Turkey, since 1983, has demanded that the foreign bidder pay for the cost of reactor construction and recoup expenses from artificially low guaranteed electricity sales over 15-20 years. Moreover, the government has refused to provide a financial guarantee or partner with the foreign firm. This approach has prevented progress with ever major Western/Asian (non-Chinese) nuclear firm. Nevertheless, Turkey stubbornly pursued its preferred financing model. Its tenacity may have paid off. Turkey’s financial format will allow for the AKP to classify the reactor deal as FDI, so expect a corresponding $20 billion bump in Turkey’s FDI stats once constructions begins.
  4. The reactor will not be completed on time. Turkey and Russia, for example, had initially agreed that construction at Akkuyu would begin in 2014. However, it is 2015, and TAEK (Turkey’s nuclear regulatory authority) just cancelled its latest tender for a foreign firm to review the design documents. Rosatom still has not received a construction license. Thus, it is highly unlikely that the government will meet its nuclear goals for the 2023 centennial.
  5. IRAN HAS NOTHING TO DO WITH TURKEY’S NUCLEAR PROGRAM. Advocates of the nuclear domino theory love to claim that Turkey, Egypt, and Saudi Arabia are destined to pursue a nuclear weapons program, if Iran were to decide to break out and weaponize its stockpiles of low-enriched uranium. As evidence for Turkey’s nuclear intent, nuclear domino theorists point to Turkey’s 2008 nuclear tender (which largely coincided with the breakdown of the Iran-EU3 negotiations) as evidence. These assertions have no basis in reality. Turkey has been pursuing nuclear energy since 1955. Moreover, after changing domestic legislation in 1983, Ankara has refused to alter its tender terms, even though its financial demands have prevented Turkey from meetings its ambitious nuclear goals. Its current approach to nuclear energy, is reflective of its historic pre-2002 approach to nuclear energy. Moreover, this shallow analysis fails to account for the steps Turkey has taken to defend against a potential nuclear armed Iran.
  6. Turkey, if it concludes an agreement with Japan/France, will, in the next twenty years, have eight foreign owned and operated reactors on its territory. Turkey is the first country to have concluded a build-operate-own arrangement for nuclear energy. The unique arrangement has raised some unanswered questions about liability in the case of an accident.

Stay tuned for more information and, as always, tweet @aaronstein1 with comments, questions, or criticisms.

About aaronstein1

I am an Istanbul based PhD Candidate a King's College London.
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