TURKEY

(updated on Dec. 2004)

1.  ENERGY, ECONOMIC AND ELECTRICITY INFORMATION

1.1.  General Overview

As of its geographical situation Turkey connects Europe to Asia. Turkey is an important candidate to be the "Energy Corridor", for the transmission of the Central Asian 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 producing areas in the Middle East and Caspian Sea regions and the consumer markets in Europe. Turkey's port of Ceyhan is an important outlet both for current Iraqi oil exports as well as for potential future Caspian oil exports. Turkey's Bosphorus Straits are a major shipping "choke point" between the Black and Mediterranean Seas.

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 2002, the population was almost 70 million and the population density reached 89 inhabitants per km² (Table 1). The annual population growth rate from 2001 to 2002 was about 1.5 %.

TABLE 1. POPULATION INFORMATION

Gross Domestic Product (GDP) in 2002 was 184,648 millions US$ (Table 2) and the GDP growth increase rate was 8.1% from the first quarter of 2002 to the first quarter of 2003.

TABLE 2. GROSS DOMESTIC PRODUCT (GDP)

The data for energy reserves are given in Table 3 and Table 4.

TABLE 3. ESTIMATED ENERGY RESERVES

TABLE 4. PRIMARY ENERGY RESOURCES AND RESERVES

Energy demand, production, import and export amounts of Turkey are given in Table 5. Energy demand increased from 69.86 Mtoe to 83.80 Mtoe between 1996 and 2003, which means a total increase of about 20%. Energy demand increase between the years of 2002 and 2003 was approximately 6%.

TABLE 5. PRIMARY ENERGY CONSUMPTION WITH DEMAND, IMPORTATION AND EXPORTATION FIGURES

The sectoral energy consumption in 2003 and some statistical data concerning energy consumption, production and net importation for the period of 1970-2003 are given in Table 6 and Table 7, respectively.

TABLE 6. TOTAL FINAL CONSUMPTION BY SECTORS IN 2003

TABLE 7. ENERGY STATISTICS

During the period of 1996-2003, the primary energy demand in Turkey increased by 2,6 % per year and reached to 83.80 Mtoe by the year 2003. During the same period, the electricity production increased about 5.7 % per year, and reached to about 141 TW·h at the end of this period. In the period of 2002-2003 both primary energy demand and electricity consumption increased. The primary energy consumption per capita is about 1.2 toe and the net electricity consumption per capita is about 1,554 kW·h in 2003. In 2003, installed capacity in Turkey reached 35587 MW of which 65% was coming from thermal resources (23008 MW) and the rest 35% (12579 MW) was from hydro resources. Until 1985, in thermal production lignite power plants have the largest share in the total thermal capacity. After this year, the share of lignite plants decrease gradually and there is a rapid increase in natural gas plants. In 2003, the share of natural gas plants, coal plants and oil plants in the total installed capacity were 32%, 23% and 9% respectively. Tables 8 - 11 show characteristic electricity data of the country.

TABLE 8. INSTALLED GENERATION CAPACITY AND PRODUCTION BY ENERGY SOURCE IN 2003

TABLE 9. NATIONAL ELECTRICITY DATA FOR 2003

TABLE 10. HISTORICAL ELECTRICITY PRODUCTION AND INSTALLED CAPACITY

TABLE 11. 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 from the countries in the East to the developed markets in the West through the recognition of "East-West Energy Corridor" concept,

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 may urge 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.

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 West Energy Market.

Although almost all conventional resources exist in Turkey, these resources are not sufficient to meet the energy demand, except for lignite and hydro. More than half of the energy demand has been met through imports. Energy planning studies show that energy demand of the country will increase parallel with its development and industrialization.

Despite Turkey would like to be a party to the United Nations Framework Convention on Climate Change, she tried to communicate the fact that her position in the Annexes did not coincide with the respective capabilities of the country, through proposal brought into the agendas of several COPs.

As very well known by all the Parties, and according to the main economic indicators, Turkey is at the early stage of industrialization.

At the COP 6 in Lahey (Hague), Turkey had made a new proposal which proved a compromise to delete her name from Annex II and keeping its participation in Annex I, with an accompanying footnote indicating that Turkey should enjoy favorable conditions within the common but differentiated responsibilities.

At the COP 7 in Marrakech, the Conference of the Parties decided to amend the list in the Annex II to the Convention by deleting the name of Turkey. The special situation of Turkey is recognized, which place Turkey, after becoming a Party, in a different situation from that of other Parties included in Annex I to the Convention.

The Republic of Turkey, by taking into account of this fair and enjoyable decision that referred to her special circumstances, accelerated the Parliamentary procedures required for accession to the Convention.

As a result, 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 was entered into force for Turkey on 24 May 2004.

1.3.  The Electricity System

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 programmes in co-ordination with its dependent and related institutions and other public and private entities.

The main companies responsible of generation, transmission, distribution and trading of electrical energy 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 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 by the end of 2006, into 20 regions.

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.

Electricity Market Regulatory Authority has been established as per Law no. 4628 in 2001 and has later been renamed as Energy Market Regulatory Authority (EPDK) as per the provisions of Natural Gas Market Law no. 4646. The objective of the above mentioned Laws is to establish a financially viable, stable, transparent and competitive energy market, which will function as per the provisions of private law and ensure independent regulation and supervision of the market in order to provide sufficient electricity and natural gas of good quality to consumers, at low cost, in a reliable and environment friendly manner. The responsibilities of EPDK have been widened so as to cover the oil related activities as per the new Petroleum Market Law enacted in late 2003.

2.  NUCLEAR POWER SITUATION

2.1.  Historical development and current nuclear power organizational structure

Studies to build a nuclear power plant 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 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 (TEAS) included a NPP project in its 1993 investment programme. In 1995, TEAS selected the Korean institute, KAERI, as the consultant for the preparation of the bid specifications. The bid process started in 1996. Three consortiums offered proposals 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. According to the current long term energy planning studies in Turkey, nuclear electricity will began to contribute national electricity production in 2020 with a capacity of 4.5 GWe.

2.6.  Research and Development

The nuclear policy of the country includes research and development activities in the application of nuclear energy sectors. Research and development activities in the nuclear field in Turkey are performed by the following organizations:

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 for the benefits of State; executing and supporting research, analysis and studies that might lead to nation's scientific, technological and economical development related with the utilization of atomic energy; establishing research and training centers, laboratories, test facilities, pilot plants without energy 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 installations; enlightening the public in nuclear matters; and preparing and implementing the decrees and regulations to determine the basis for the nuclear and radiological safety. The TAEK undertakes the research duty by performing experimental and theoretical studies at the TAEK's research centers and by making projects with the universities. The research infrastructure at the Çekmece Nuclear Research and Training Center of the TAEK is especially devoted to the research programs addressing the issues for nuclear reactor and fuel technology.

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

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

Scientific and Technical Research Council of Turkey (TUBITAK), is the supreme organization put in charge of promoting, developing, organizing and coordinating research and development in the fields of positive sciences in Turkey in line with the national targets of economic development and technical progress. The Science and Technology Supreme Board (BTYK) is the main organization in the science and technology policy studies. BTYK was established in 1983 and includes representatives from relevant organizations including Turkish Atomic Energy Authority and TUBITAK. 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.

2.7.  International Co-operation and Initiatives

Co-operation with international/national groups on theoretical and experimental projects concerning small and medium type of reactors and innovative technologies would lead to an increase of staff capabilities and experience on nuclear technology in Turkey. To achieve this goal, Turkey has been participating in the "International Project on Innovative Nuclear Reactor Technologies and Fuel Cycles" and "Technical Working Group on Gas Cooled Reactors" coordinated by the IAEA. The coordinated research program of the IAEA is an important mechanism for promoting national research activities in different fields of interest in nuclear technology.

There is an IAEA TC project to enlighten the public with bare facts of nuclear technology to develop an unbiased understanding in nuclear field in Turkey.

2.8.  Human Resources Development

Some universities in Turkey have undergraduate and graduate programs in nuclear engineering field. TAEK is also educating the personnel in the nuclear field in its research and training centers, laboratories, test facilities, pilot plants and also making cooperation with the universities and related organizations. The 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. over the 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.

Nuclear Safety Department (NGD) of TAEK is the responsible unit from 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 with an additional report of his/her own. The President 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.

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 the 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, 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. As a part of this project, a new set of regulatory documents called the TAEK Nuclear Safety Series are used for detailed regulations. TAEK Nuclear Safety Series documents are drafted, changed and issued according to provisions of a regulation issued in December 2002. A few documents from these series have been drafted and are waiting for issuance by AEK. More documents regarding detailed regulations are expected to be drafted continuously.

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 expected 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, RG (Official Gazette)
• Regulations on Physical Protection of Special Nuclear Materials
• RG No:16702 of 20.07.1979Decree 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 Licensing Procedures and Determination of Responsibilities and Authorities for the Research Reactor Operators
  RG No: 20255 of 17.09.1989
• 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

Regulations Approved by AEK (waiting for approval of Prime Ministry) and Regulations under Discussion (not submitted to AEK):

• 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
• Regulations Related to Quality Assurance in the Procurement, Design and Manufacture of Nuclear Assemblies Under Discussion
• Regulations for Design Basis Flood for Nuclear Power Plants on Coastal Sites Under Discussion
• A guide on Quality Assurance for Studies on Survey and Evaluation Concerning Site Selection of Nuclear Power Plants To be submitted to AEK
• A guide on Site Survey for Nuclear Power Plants Under discussion
• A guide on Design Basis Flood for Nuclear Power Plants on River Side Under discussion
• Regulations related to Handling and Storage of Nuclear Fuels in Nuclear Power Plants Under Discussion
• 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 To be submitted to AEK
• Nuclear Safety Series AR-1, Unusual Event Reporting in Research Reactors Approved by AEK
• Nuclear Safety Series AR-2, Records and Reports in Research Reactors To be submitted to AEK

5.3.  International, Multilateral and Bilateral Agreements

4.  CURRENT ISSUES AND DEVELOPMENTS ON NUCLEAR POWER

4.1.  Current energy policy

Turkey&]39;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 East to the West markets through the energy corridor over Turkey,
• Giving priority to resource diversification for energy security in our country 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.

If expected economical growth rate can be sustained, the projected (according to BASE scenario of demand projection) electricity generation for 2020 is about 499 TW·h. In spite of the fact that nuclear energy contribution was planned to be 31.6 TWh by the year 2020 and that there was a strong intention of the Government to install the first NPP in Akkuyu, the Government had decided to postpone the Akkuyu NPP project, following the meeting of the Cabinet held on 25 July 2000. Since Turkey needed to concentrate on a programme of economic stability aiming to reduce inflation rates at considerable amounts, under supervision of the IMF, the government could not afford the estimated three to four billion US dollars needed for construction of the country's first nuclear power plant. The Government declared also that the cancellation of the Akkuyu NPP project did not mean that Turkey will refrain from using nuclear energy in the future. The Cabinet's announcement also included the need of contributing to the technological improvements of new generation nuclear power plants.

Thus nuclear energy is the most important alternative to fossil resources when diversity and energy supply security are taken into consideration. The current projections for the energy demand in Turkey still imposes the need for nuclear power plants after 2010, however the final decision is yet to be given.

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 needs to be considered;

• Diversification in primary energy sources,
• Utilization of domestic energy resources,
• Increasing the share of 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 line with the EU directives and adoption of EU directives on related issues,
• Investing for environmental retrofit projects for the existing power plants,
• Unbundling and privatization of State-owned facilities,

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 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 competitive 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 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 will be started by distribution segment and to be completed in 2006, followed by generation. State owned generation plants are going to be privatized in a grouped manner so as to enhance the competitiveness on the generation side of the market.

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 (http://www.epdk.org.tr/english/default.asp).

The Electricity Market Law enables retail competition through introduction of eligible consumers. The Law set the eligibility threshold at 9 GWh consumption p.a. 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 is reduced to 7.8 GWh in 2004; which corresponds to 29% of the retail market opening rate. According to the strategy paper, full market opening is expected to be established by 2012.

All bilateral agreements have to be registered to Settlement Centre, the market operator, which was established within TEIAS, or in other words the transmission company. Since Balancing and Settlement Code has not been enacted yet, as an interim solution a Communiqué Regarding Financial Settlement has been introduced by EMRA, to settle imbalances of bilateral agreements occurred in the market. Settlement Centre compares the generated and consumed amount on monthly basis for three different time zones within a day, and settles imbalances according to the regulated bid and offer prices of TETAS, the state-owned wholesale company. As of December 2003, 84 supplier and 1362 consumers were registered to the Settlement Centre.

Temporary Balancing and settlement regulation is to be implemented at 1st January 2005 and final balancing and settlement system shall be implemented fully at mid 2006 after completion of all measurement, teleinformation and data process hardware and software.

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
• Ministry of Environment,
• TUBITAK (Scientific and Technical Research Council of Turkey),
• TAEK (Turkish Atomic Energy Authority)
• Universities.

TAEK is the national authority responsible for the R&D activities in nuclear energy and technology. TAEK has five departments and four research and training centers. The bodies of the Authority 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

According to a study by EUAS, projected growth in CO2 emissions (base case) would reach about 440 million tons of CO2 in 2012. This corresponds to an average growth of 6.3% over the period 1999-2012, i.e. more than the historical rate. Such growth would closely track the increase in TPES, projected at 6.2 % per year, and would be driven by energy demand in electric power generation and industrial sectors such as iron, steel and cement production. In 2012 coal use would account for about one-half of CO2 emissions, oil for about one-third, and gas for the remainder.

The main drawback of fossil fuel utilization is the environmental pollution, especially the CO2 emission. The nuclear energy is an important option and alternative to fossil fuels.

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 the Department of Nuclear Safety of TAEK directly addresses this issue by focusing on safety goals and 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 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 2

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