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TURKEY

(updated on Dec. 2006)

1.  ENERGY, ECONOMIC AND ELECTRICITY INFORMATION

1.1.  General Overview

As of its geographical situation Turkey connects Europe to Asia. Turkey has a strategic role to play in connecting the Caspian and Middle East Countries rich oil and natural gas resources to the Western Markets. Turkey has borders with Greece, Bulgaria, Romania, Georgia, Armenia, Azerbaijan, Iran, Iraq and Syria. Turkey’s total area is 779 452 km², about 97% of which is situated in Asia and 3% in Europe. Four seas, the Marmara, the Aegean, the Mediterranean and the Black Sea surround Turkey.

Turkey’s strategic location makes it a natural "energy bridge" between the major oil and gas producing areas in the Middle East and Caspian Sea regions and the consumer markets in Europe. Turkey's Bosphorus Straits are a major shipping "choke point" between the Black and Mediterranean Seas. Turkey's port of Ceyhan at Mediterrianen Sea is an important outlet both for current Iraqi oil exports as well as for Caspian oil exports which were started by the operation of the Baku-Tiflis-Ceyhan Crude Oil Pipeline in 2006. Turkey further aims at establishment of a significant energy hub at Ceyhan port. Turkey will also become the fourth artery in EU gas supplies by the realization of the Turkey-Greece Interconnection with extension to Italy (South European Gas Ring) and the Nabucco project that connects Turkey to Austria via Bulgaria, Romania and Hungary.

Except for the eastern part of the Black Sea coastlands, most of Turkey has a very sunny climate even in winter. Average daily sunshine amounts range from three to four hours in midwinter to as much as twelve to thirteen hours in summer. The Black Sea coast has some rain all the year round. Although summer temperatures are rather high, the heat is tempered by the low humidity inland and the sea breezes along the coast. Occasionally the nights may be sticky and humid on the Aegean and Mediterranean coasts.

In Turkey population is about 72 million and the population density is about 93 inhabitants per km² (Table 1).

TABLE 1. POPULATION INFORMATION

Gross National Product (GNP) was 360,876 millions US$ (Table 2) and the GNP growth rate was 7.6% in 2005.

TABLE 2. SOME ECONOMIC INDICATORS

The data for energy reserves are given in Table 3.

TABLE 3. PRIMARY ENERGY RESOURCES AND RESERVES

Energy demand, production, import and export amounts of Turkey are given in Table 4. Energy demand increased from 73.78 Mtoe to 91.58 Mtoe between 1997 and 2005, which means a total increase of about 24%. Energy demand increase between 2004 and 2005 was approximately 4.5%.

TABLE 4. PRIMARY ENERGY CONSUMPTION WITH DEMAND, IMPORTATION AND EXPORTATION FIGURES

The energy consumption in various sectors in 2005 and some statistical data concerning energy consumption, production and net importation for the period of 1970-2005 are given in Table 5 and Table 6, respectively.

TABLE 5. TOTAL FINAL CONSUMPTION BY SECTORS IN 2005

TABLE 6. ENERGY STATISTICS

During the period of 2000-2005, the primary energy demand in Turkey increased by 2.6 % per year and reached to 91.58 Mtoe by the year 2005. During the same period, the electricity production increased about 5.3% per year, and reached to about 161.96 TW·h at the end of this period. In the period of 2004-2005 both primary energy demand and electricity consumption increased. The primary energy consumption per capita is about 1.3 toe and the net electricity consumption per capita is about 1846 kW·h in 2005. In 2005, installed capacity in Turkey reached 38820 MW of which 67% was coming from thermal resources (25914 MW) and the rest 33% (12906 MW) was from hydro resources. Until 1985, lignite power plants have had the largest share in the total thermal capacity in thermal production. After this year, the share of lignite plants decrease gradually and there is a rapid increase in natural gas plants. In 2005, the shares of natural gas plants, coal plants and oil plants in the total installed capacity were 35%, 23% and 8% respectively. Tables 7-10 shows electricity production data of the country.

TABLE 7. INSTALLED GENERATION CAPACITY AND PRODUCTION BY ENERGY SOURCE IN 2005

TABLE 8. NATIONAL ELECTRICITY DATA FOR 2005

TABLE 9. ELECTRICITY PRODUCTION AND INSTALLED CAPACITY

TABLE 10. ENERGY RELATED RATIOS

1.2.  Energy Policy

The Turkish energy policy is concentrated on the assurance of energy supply in a reliable, sufficient, timely manner, in economic and clean terms and in a way to support and orientate the targeted growth and social developments. In parallel to this ultimate target, energy policy of Turkey has the following major pillars:

• Prioritizing the energy security related activities in order to cope with increasing demand and import dependency,
• Taking into account the environmental concerns in all stages of the energy chain within the framework of sustainable development,
• Facilitating the reform and liberalization activities in the energy sector so as to increase the overall productivity and efficiency, and to enhance the transparency through creating the competitive framework,
• Intensifying energy technologies related R&D studies and activities,
• Realization of projects regarding the transportation of hydrocarbons through the recognition of “East-West” and “North-South” Energy Corridors concepts.

Policy issues related to energy are within the responsibility of the Ministry of Energy and Natural Resources (MENR). Energy planning studies, taking into account short, medium and long term policies and measures, carried out by the MENR, within the framework of the above listed objectives.

Achieving 3Es (energy-economy-environment) has become a crucial challenge for the Turkish energy sector, in parallel to the growing demand and investment needs. Market liberalization has tended to improve the overall economic efficiency, orientating the targeted growth. On the other hand, enhancing energy security and reliability within the competitive market structure is one of the main challenges that require determination and implementation of policy tools on a well-defined basis. Although environmental quality has been given high priority for the past few years, financial burden constituted by the implementation of necessary measures urges for more cost-effective approaches to be followed. Integrated approaches considering the achievement of 3Es in a sustainable manner have been taken into account in determining the policies.

Although almost all conventional resources exist in Turkey, these resources are not sufficient to meet the substantial growth in energy demand, except for lignite and hydro. Around 70% energy demand is being met through imports. Energy planning studies indicate that energy demand of the country will continue to increase in parallel with economic development, industrialization and urbanization. In this context, Turkey has been intensifying efforts for further diversification in imports in both type and origin, while accelerating the production and utilization of the remaining domestic resources potential.

Turkey became a party to the United Nations Framework Convention on Climate Change in 2004 based on the principles of “common but differentiated responsibilities”. The Law regarding the accession of Turkey to the United Nations Framework Convention on Climate Change (UNFCCC) was acceded by the Turkish Grand National Assembly in October 2003 and entered into force on 24 May 2004. Studies are underway for the first National Communication to be submitted to the UNFCCC Secretariat.

As of its geographical location Turkey has been considered as a natural land bridge, connecting Europe to Asia. Therefore, Turkey has an important role to play as an “Energy Corridor”, between the major oil and natural gas producing countries in the Middle East and Caspian Sea and the demanding markets.

1.3.  The Electricity System

In parallel to the economic growth and social development, electricity demand has shown a significant increase over the past decades and reached to 162 TWh in 2005, highlighting an almost three-fold increase over the past fifteen years. Recent demand projections for the period until 2020 indicate that annual average increase in demand will be 7.9% in high demand scenario and 6.4% in low demand scenario. This growth necessitates a substantial amount of new capacity to be integrated into the grid. According to the low and high demand scenarios, about 35 GW and 52 GW of new capacities are needed, respectively, to be installed until 2020 apart from the projects under construction and already licensed.

Turkey has coal, mostly lignite, and hydro resources for electricity generation. Roughly 35% of the total indigenous potential has been utilized until 2005. Turkey attaches utmost importance for utilization of the remaining potential with due regard to cope with the risks stemming from import dependency. Integration of nuclear power plants into the Turkish electricity grid is also being considered as an essential tool to enhance supply security, while strengthening the GHG emission mitigation efforts.

The Electricity Market Law (Law No:4628) was enacted in 2001 so as to establish a competitive market structure in electricity sector under autonomous supervision and regulation of the Energy Market Regulatory Authority (EMRA). The Market model is based on bilateral contracts supplemented by a Balancing and Settlement Mechanism. The secondary legislation governing the electricity market has been issued by EMRA. As of January 2006, 32% of market opening had been achieved.

The Ministry of Energy and Natural Resources is the main body of the Turkish energy sector and is responsible for the preparation and implementation of energy policies, plans and programs in co-ordination with its dependent and related institutions and other public and private entities.

The state owned companies acting in the electricity sector are as follows:

The Electricity Generation Company (EÜAS) is the state owned generation company responsible for operation of existing power plants owned by the public, and for new capacity additions as well as last resort in case the market fails to provide sufficient capacity to cover the demand. The Strategy Paper endorsed by the High Planning Council in March 2004 envisages the privatization of a significant portion of the EÜAS capacity.

The Turkish Electricity Transmission Company (TEIAS) is the transmission system operator and is responsible for the management of the grid, including electricity transmission and load dispatch activities.

The Turkish Electricity Trading and Contracting Company (TETTAS) is the wholesale company established to offset the stranded cost element of the electricity market reform, and is responsible for electricity wholesales and purchases.

The Turkish Electricity Distribution Corporation (TEDAS) is responsible for carrying out electricity distribution activities. The Strategy Paper endorsed by the High Planning Council in March 2004 envisages the privatization in the distribution segment of the electricity market, privatization of TEDAS into 20 regions. Distribution privatizations are aimed to be launched before the end of 2006.

The State Water Works (DSI) is in charge of the planning, design and building of hydro plants as well as flood protection, irrigation, water supply to big cities and land drainage works.

2.  NUCLEAR POWER SITUATION

2.1.  Historical development and current nuclear power organizational structure

Studies to build a nuclear power plant (NPP) in Turkey were started in 1965. Later, between 1967 and 1970, a feasibility study was made by a foreign consultant company to build a 300-400 MW NPP. The NPP would have been in operation in 1977. Unfortunately, because of the problems relating the site selection and other issues the project could not be realized.

In 1973, Turkish Electricity Authority (TEK) decided to build an 80 MWe prototype plant. However, in 1974 the project was cancelled due to reason that this project could delay the construction of a greater capacity nuclear power plant. Instead of this prototype plant, TEK has decided to build a 600 MWe NPP in southern Turkey.

Site selection studies have been made in 1974 and 1975 and the Gülnar-Akkuyu location was found suitable for the construction of the first NPP. In 1976, the Atomic Energy Commission granted a site license for Akkuyu. In 1977, a bid was prepared and ASEA-ATOM and STAL-LAVAL companies were awarded as the best bidders. Contract negotiations continued until 1980. However, in September 1980, due to Swedish Government’s decision to withdraw the loan guarantee, the project was cancelled.

The third attempt was made in 1980. Three companies were awarded to build four nuclear power plants (1 CANDU unit by AECL and 1 PWR unit by KWU in Akkuyu and 2 BWR units by GE in Sinop). Due to Turkey’s request to apply the BOT model, KWU resigned from the bid. Although AECL accepted the BOT model, it insisted upon the governmental guarantee on the BOT credit. The Turkish government refused to give the guarantee and as a consequence the project was cancelled.

In 1992, the Ministry of Energy and Natural Resources stated in a report that the country would face an energy crisis if the installation of new energy resources fails before 2010, suggesting that nuclear energy generation should be considered as an option.

In 1993, the High Council of Science and Technology identified nuclear electricity generation as the 3rd highest priority project of the country. In view of this decision, the Turkish Electricity Generation and Transmission Company (TEAŞ) included a NPP project in its 1993 investment program. The bid process started in 1996 and three consortiums bidded in 1997: AECL, NPI and Westinghouse. After a series of delays, in July 2000, the Government decided to postpone the project.

2.2.  Nuclear Power Plants: Status and Operations

There is no nuclear power plants in operation, under construction and decommissioned. In November 2004, The Turkish Electricity Transmission Company (TEIAS) prepared a report entitled “Electricity Energy Generation Planning Study for Turkey (2005-2020)”. This report is providing guidance for the decision makers, investors and market actors on the timing, composition and capacities of the additional electricity generation sources needed for the next 15 years period. According to this planning study, it is planned to add about 4500 MWe total nuclear capacity until 2015 with the consideration of high demand scenario, i.e. 7.9% increase per year.

2.3.  Research and Development

The nuclear policy of the country includes research and development activities concerning the application of nuclear technology in various sectors such as energy, environment, human health, industry, agriculture etc. Research and development activities on nuclear technology, including nuclear energy are performed by the following organizations in Turkey:

The Turkish Atomic Energy Authority (TAEK) is responsible for determining the basis of the national policy and the related plans and programs regarding the peaceful utilization of atomic energy; executing and supporting research, analysis and studies that might lead to nation#8217;s scientific, technological and economical development related with the utilization of atomic energy; establishing research and training centers, laboratories, test facilities, pilot plants without electricity producing purposes wherever it is needed in the country; educating the personnel in the nuclear field and make cooperation with the universities and related organizations; giving approval, permission and license, related to the site selection, construction, operation of nuclear facilities; enlightening public in nuclear matters; and preparing and implementing the decrees and regulations to determine the basis for the nuclear and radiological safety. TAEK undertakes the research duty by performing experimental and theoretical studies at TAEK’s research centers and by making projects with the universities and other related organizations. The research infrastructure at the Çekmece Nuclear Research and Training Center of TAEK is especially devoted to the research and development programs addressing the issues for nuclear reactor and fuel technology.

The Mineral Exploration and Research Directorate is responsible for the systematic survey, investigation and research on all kinds of resources including thorium and uranium.

Research and development activities in nuclear technology are performed in related departments of some universities in Turkey.

The Science and Technology Supreme Board (BTYK) is the main body, that sets national policy and priorities for science and technology. BTYK was established in 1983 and includes representatives from relevant organizations, including the Turkish Atomic Energy Authority. The “Vision 2023” study is commenced by the decision of BTYK in 2000 to determine national science and technology strategies for the period of 2003-2023. Through this project it is aimed to have a “2003-2023 Strategy Document” that covers science and technology vision, strategic technologies and R&D priorities, and policy recommendations.

2.4.  International Co-operation and Initiatives

The Turkish Atomic Energy Authority (TAEK) is closely following the worldwide trends and progresses in the field of nuclear reactor technologies and fuel cycle, and due to this reason Turkey is participating in the “International Project on Innovative Nuclear Reactor Technologies and Fuel Cycles” and “Technical Working Group on Gas Cooled Reactors” coordinated by IAEA. Besides, TAEK participates and contributes to the studies and projects of the OECD/NEA working groups.

Turkey has an observer status for CERN, the European Organization for Nuclear Research, which is the world’s leading laboratory for particle physics. All activities in Turkey are coordinated by TAEK. Turkey is the member of another important international initiative, which is the Synchrotron-light for Experimental Science and Applications in the Middle East (SESAME) and TAEK is the representing Authority in SESAME. The main objectives of Turkey are to establish qualified manpower by actively participating in the experimental programs in CERN and SESAME and to follow world-wide scientific progresses.

2.5.  Human Resources Development

Some universities in Turkey have undergraduate and graduate programs in nuclear engineering field. TAEK is training the personnel in nuclear field at the affiliated research and training centers and making cooperation with the universities and related organizations on this matter. IAEA is one of the main supporting organizations for developing national manpower through training and fellowship programs

3.  NATIONAL LAWS AND REGULATIONS

3.1.  Safety Authority and the Licensing Process

The Authority responsible from the enforcing nuclear safety is the Turkish Atomic Energy Authority (TAEK). TAEK is the main driving force for enhancing and broadening of all nuclear related activities in Turkey. Beside her other duties, TAEK undertakes all regulatory activities including licensing, drafting regulations, and performing inspections for special nuclear materials, radioactive materials and nuclear facilities.

The bodies of TAEK are:

• The Atomic Energy Commission,
• The Advisory Committee,
• The Specialized Departments, and
• The Affiliated Centers.

The Nuclear Safety Department (NGD) of TAEK is the responsible unit for the evaluation of licensing applications of nuclear installations under the coordination and supervision of the Vice President of TAEK responsible from Nuclear Power and Safety. “Decree Pertaining to Issue License for Nuclear Installations” regulates the application requirements and procedures of licensing activities for all nuclear installations and for all stages. The licensing of nuclear facilities is composed of three main stages. The first stage is the Site License. The second stage is the limited work permit and the Construction License. Final stage is composed of commissioning permit, permit for fuel loading and start up tests and the Operating License.

NGD reviews, assesses and evaluates each application, prepares a report and submits to the Vice President, who conveys this report to the President of TAEK with an additional report of his/her own. The President of TAEK brings these reports to the Atomic Energy Commission (AEK) meeting for adoption. An affirmative decision of AEK with the signature of the Prime Minister is the License. This procedure is applicable for all permits and licenses for nuclear facilities.

3.2.  Main National Laws and Regulations in Nuclear Power

The 1982 Act (No. 2690, published in Official Gazette No. 17753 on 13 July 1982) established TAEK and superseded the former organization - the Atomic Energy Commission. The Act defines the structure of TAEK, the duties, responsibilities and jurisdiction of each unit. According to the Act, TAEK is the judicial organization for preparing the regulatory framework concerning radiation protection and nuclear safety.

Beside the Act mentioned above, TAEK issued two decrees concerning the licensing procedures of nuclear installations and radiation safety. “Decree Pertaining to Issue License for Nuclear Installations” (Official Gazette, No.18256, 19 December 1983) regulates the licensing procedures and necessary documents for license application.

There are thirteen Codes of Practice issued by TAEK to cover more detailed issues like licensing of radioactive devices, quality assurance for nuclear installations and site selection for nuclear power plants. A few more Codes of Practice are ready to be issued. Guides and recommendations of the Atomic Energy Commission serve only for advisory purposes.

NGD is implementing a project since 2000 for revising existing regulations and drafting new ones, aiming to have a consistent and comprehensive set of regulations on nuclear installation safety, mainly based on the IAEA Safety Series.

Since there are no nuclear facilities which produce nuclear waste that should be disposed within Turkey and which is expected to go for decommissioning in the near or mid-term future, there are no regulations set or being drafted on financing mechanisms for these activities. However, the above mentioned project is aimed to produce a draft nuclear law which would contain articles addressing these issues.

The list of issued regulations is as follows:

• Regulations on General Project and Safety Criteria for Design and Construction of Nuclear Power Plants 03.09.1975, RG¹
• Regulations on Physical Protection of Special Nuclear Materials
• RG No:16702 of 20.07.1979 Decree Pertaining to Issue of Licenses for Nuclear Installations RG No: 18256 of 19.12.1983
• Decree on Radiation Safety RG No: 18861 of 7.9.1985
• A Guide on the Earthquake Related Subject Requested in the Issuance of Limited Work Permit and Site License, 1989.
• Regulations on Radiation Safety
  RG No: 23999 of 24.03.2000
• Regulation on Preparation and Enactment of Safety Guides Determining Safety Principles of Nuclear Installations
  RG No: 18572 of 11.11.1984
• Regulation on Preparation and Enactment of Safety Guides Determining Safety Principles of Nuclear Installations
  RG No: 18572 of 11.11.1984
• A Guide on Seismic Design and Qualification of Nuclear Plant Facilities.
  Approved by AEC on 29.5.1996
• Regulations on Quality Assurance and Inspection of Nuclear Installations
  RG No: 22932 of 13.3.1997
• Regulations on Nuclear Materials Accounting and Control
  RG No: 23106 of 10.9.1997
• Regulations on Safe Transport of Radioactive Materials
  RG No: 23106 of 10.9.1997
• Regulations on the Establishment and Working Procedures of Nuclear Safety Advisory Committee
  RG No: 23106 of 10.09.97
• Regulation on Quality Assurance Criteria in Scope of PSAR
  RG No: 23965 of 15.02.2000
• Regulation on General Safety Rules Related to the Siting Activities of Nuclear Power Plants
  RG No: 23975 of 25.02.2000
• Regulation on Quality Assurance for Studies on Survey and Evaluation Concerning Site Selection of Nuclear Power Plants
  RG No: 24766 of 26.05.2002
• Regulation on Fundamental Criteria of Quality Assurance Program for Nuclear Installations
  RG No: 23991 of 12.03.2000
• Regulation on Preparing, Adopting, Enforcing and Amending of Nuclear Safety Series Documents
  RG No: 24931 of 9.11.2002
• Regulation on Operating Organization, Personnel Qualifications and Licensing of Operating Personnel for Research Reactors
  RG No: 25973 of 21.10.2005

Regulations Approved by AEK (waiting for approval of Prime Ministry):

• A Guide on Fire Protection in Nuclear Power Plants Approved by AEK
• A Guide on External Man-Induced Events in Relation to Nuclear Power Plant Design
  Approved by AEK
• Objectives for the Safety of Nuclear Installations
  Approved by AEK
• Basic Principles for the Safety of Nuclear Installations
  Approved by AEK
• Specific Principles for the Safety of Nuclear Power Plants
  Approved by AEK
• Specific Principles for the Safety of Research Reactors
  Approved by AEK
• Nuclear Safety Series AR-1, Unusual Event Reporting in Research Reactors
  Approved by AEK

5.3.  International, Multilateral and Bilateral Agreements

4.  CURRENT ISSUES AND DEVELOPMENTS ON NUCLEAR POWER

4.1.  Current energy policy

Turkey’s energy policies which are under implementation in order to promote economic development and welfare of the country can be summarized shortly in five groups according to their priorities:

• Liberalization of the sector, enhancing productivity and ensuring transparency in the sector by creating a competitive environment in the energy market,
• Transportation of abundant resources of the neighboring countries to the demanding markets through the energy corridor concept,
• Giving priority to resource diversification for energy security in Turkey which is getting more and more dependent to external sources in meeting its energy demand,
• Targeting sustainable development in evaluation and consumption of energy resources, taking into consideration the environmental issues as well,
• Intensifying studies on new energy technologies, including nuclear.

According to the electricity generation planning study entitled “Electricity Energy Generation Planning Study for Turkey (2005-2020)”, which was prepared by the Turkish Electricity Transmission Company (TEIAS) in 2004, the demand is predicted to be 242 TWh in 2010, 356.2 TWh in 2015 and 499.5 TWh in 2020, according to the high demand scenario with 7.9% increase rate per year. Even in low demand scenario the annual demands will be as high as; 216.7 TWh in 2010, 294.5 TWh in 2015 and 406.5 TWh in 2020. These projections clearly explains the need of utilizing nuclear energy for the concerned planning period so as to diversify the energy resources by including a high base load nuclear capacity.

Thus, nuclear energy is the most important alternative to fossil resources in Turkey when diversity and energy supply security are taken into consideration.

4.2.  Privatization and deregulation

The main aspect of the electricity policy is to ensure security of supply, environmental quality and cost effectiveness. In this respect, the followings are the most important objectives that is needed to be considered;

• Diversification in primary energy sources,
• Utilization of domestic energy resources, including the renewable sources,
• Developing regional interconnection projects, taking part in regional markets,
• Creating a reliable investment environment for adequate investment for the new generation capacity, transmission and distribution,
• Creating a liberal and competitive electricity market in parallel to the related EU Acquis,
• Investing for environmental retrofit projects for the existing power plants.

At present, there are four main laws directly relevant to the government policy on electricity:

1. The Law No: 3154, regarding the establishment of Ministry or Energy and Natural Resources
2. The Laws No: 3096 and 3996, enabling private sector to participate in electricity generation, transmission and distribution through BOT, TOOR and auto-producer models
3. The Law No: 4283, enabling private investors to build and operate (BOO) power plants
4. The Electricity Market Law (EML- No: 4628)

The Law No: 3154, describes the responsibilities and duties of the Ministry of Energy and Natural Resources. According to the law, the ministry was responsible from policy issues, security of supply as well as regulation, tariff setting, authorization or granting concession. However, after the establishment of the EML, functions of licensing, tariff setting, regulation and other market operations are transferred to the Regulatory Authority.

Similarly, in line with the liberalization policy and steps taken towards a fully competitive market structure, the methods described previously in the laws No: 3096, 3996 and 4283 are not applicable any more.

The objective of the Electricity Market Law is to establish a financially viable, stable, transparent and competitive electricity market, which will function according to the provisions of private law and to ensure independent regulation and supervision of the market in order to provide consumers with adequate electricity of good quality, at low cost and in a reliable and environment friendly manner.

The Electricity Market Law and the complementing secondary legislation are in line, to a great extent, with the EU Directive 2003/54/EC on the Internal Market for Electricity.

The Strategy Paper Concerning Electricity Market Reform and Privatization was endorsed by High Planning Council in March 2004, outlining the major steps to be taken towards a fully liberal market structure through smooth transition. Privatization of distribution assets and generation power plants, transitional arrangements, security of supply and some other important aspects of the market reform process are addressed for the period up to 2012.

The primary benefits expected from electricity sector reform and privatization has been determined as follows:

1. decreasing of costs through effective and efficient operation of electricity generation and distribution assets;
2. increasing the supply quality and security of supply in the electricity sector;
3. decreasing the technical losses in distribution sub-sector to the level in the OECD countries and prevention of theft (non-technical losses);
4. ensuring that the required rehabilitation and expansion investments are performed by the private sector without creating any liabilities on the public institutions; and
5. transferring to consumers the benefits obtained through competition in generation, trade of electricity, and regulation of quality of service.

As per the provisions of the Strategy Paper, privatization of distribution assets was envisaged to be kicked-off at first hand and to be completed in 2006, and thereafter privatization of generation facilities will be followed. However, due to some delays in issuance of legal amendments, this target seems to be postponed to a later date. Nowadays, the licensing of newly established distribution companies is on the pipeline together with the approval of tariffs to be employed by these distribution companies.

Energy Market Regulatory Authority (EMRA) is assigned the responsibility of “issuing Board-approved licenses for market activities, regulation of existing contracts within the scope of transfer of operating rights; monitoring market performance; supervising the market participants, approving the tariffs; drafting, amending, enforcing and auditing the performance standards and distribution and customer services codes; setting out the pricing principles, including the principles to be employed for electricity sale to non-eligible consumers, enforcing and auditing the formulae regarding the modification of such prices due to inflation; and ensuring the conformity of the market behavior” within the provisions of the Electricity Market Law.

Within this purpose, EMRA issued the most of the relevant secondary legislation by exercising a limited governance mechanism through acquiring market participants’ opinions on draft legislation. Among these, licensing regulation, tariffs regulation, eligible consumer regulation, export and import regulation, customer services regulation, grid regulation, and distribution regulation have been enacted. Besides, several communiqués have been issued either to specify and set forth the implementation details of related regulations or to set some other regulatory issues. All the secondary legislation is available in the EMRA’s web site (www.emra.org.tr).

The Electricity Market Law enables retail competition through introduction of eligible consumers. The Law sets the eligibility threshold for a consumption of 9 GWh per year as a starting point and gives the right to EMRA to lower eligibility threshold every year till to reach full market opening.

Eligible consumers began changing their suppliers as of 3 March 2003. Eligibility limit was reduced to 6 GWh in 2006; which corresponds to 32% opening rate of the retail market.

All bilateral agreements have to be registered to Financial Settlement Centre, the market operator, which was established within TEIAS, the transmission system operator. Since financial aspects of Balancing and Settlement Code has not been implemented so far, as an interim solution a Communiqué Regarding Financial Settlement has been introduced by EMRA, to settle imbalances of bilateral agreements occurred in the market. Financial Settlement Centre compares the generated and consumed amounts on monthly basis for three different time zones within a day, and settles imbalances according to the regulated bid and offer prices of TETTAS, the state-owned wholesale company. As of June 2006, 174 suppliers and 1224 consumers were registered to the Settlement Centre.

The Energy Market Regulatory Board decided to start full implementation of the Balancing and Settlement Code as of 1 August 2006. With the start of implementation of the Code, which allows competition in the market, the market participants and potential investors would enjoy the free market environment, where prices is to be formed according to bid and offer prices, and this market design together with the considerably high demand growth rates would accelerate electricity production facility y investments. Given the cost superiority of nuclear power plants, and policy of Turkey regarding initiation of a nuclear program, such a competitive market environment would favor commissioning of nuclear power plants under a stable and foreseeable market regulation practice.

4.3.  Role of the government in the nuclear R&D

The main institutions involved in the definition of R&D priorities and programmes are:

• State Planning Organization,
• Ministry of Energy and Natural Resources and its related bodies and enterprises
• TAEK (Turkish Atomic Energy Authority),
• Ministry of Environment,
• Universities.

TAEK is the national authority responsible for the R&D activities in nuclear energy and technology. TAEK has five departments and three research and training centers.

The bodies of TAEK are:

• The Atomic Energy Commission
• The Advisory Committee
• The Specialized Departments
        Nuclear Safety Department
        Radiation Health and Safety Department
        Technology Department
        Research, Development and Coordination Department
        Department of Administrative and Financial Affairs
• The Affiliated Centres
        Çekmece Nuclear Research and Training Center
        Ankara Nuclear Research and Training Center
        Ankara Nuclear Research Center on Agriculture and Animal Science
        Turkic States Nuclear Cooperation Research and Training Center

4.4.  Nuclear Energy and Climate Change

Turkey’s carbon emissions have risen in line with country’s energy consumption. Since 1980, Turkey’s annual energy related carbon emissions have increased from about 18 million tons to about 66 million tons (2005). According to a study by TEIAS (Electricity Energy Generation Planning Study for Turkey (2005-2020)), projected growth in annual CO₂ emissions would reach to about 142 (low scenario) and 208 (high scenario) million tons in 2020. CO₂ emission growth would be driven by energy demand in electric power generation and industrial sectors such as iron, steel and cement production.

According to the low and high scenarios, shares of coal utilization for energy production in 2020 will be 19% and 27%, respectively. In 2020, share of gas utilization for energy production is estimated to be 35% and 29% according to the low and high scenarios, respectively. The main drawback of fossil fuel utilization is the environmental pollution, especially by the CO₂ emission. The nuclear energy is an important option and alternative to fossil fuels in regard of preventing pollutant emissions since there is no greenhouse gas emission to environment from nuclear electricity production.

4.5.  Safety and waste management issues

There was limited number of regulations relevant to the safety issues in nuclear power plants. The project on drafting new regulations implemented by TAEK directly addresses this issue by focusing on safety goals, basic and specific safety principles for nuclear installations, including nuclear power reactors. The documents concerning the nuclear power are completed and approved by the Atomic Energy Commission. These documents will be issued as decree and/or regulations upon completion of the project by 2006.

Waste management is limited to radiological waste in Turkey, and there is a facility for interim storage of these wastes. This storage facility was built up and has been operating since 1989 in the Çekmece Nuclear Research and Training Center (Istanbul). In this facility; compaction, cementation and precipitation processes have been carried out. However, waste management issue for nuclear power is addressed in above mentioned documents in terms of principles, where the detailed regulations are yet to be drafted.

REFERENCES

Appendix

DIRECTORY OF THE MAIN ORGANIZATIONS, INSTITUTIONS AND COMPANIES INVOLVED IN NUCLEAR POWER RELATED ACTIVITIES

¹ RG : Official Gazette