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THE PERCEIVED BENEFITS FOR TURKEY ADOPTING NUCLEAR ENERGY AND THE LESSONS LEARNED FROM THE ATTEMPTS MADE TO INTRODUCE A NUCLEAR PROGRAM

OBNINSK,MOSCOW27 JUNE - 02 JULY 2004

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THE PERCEIVED BENEFITS FOR TURKEY ADOPTING NUCLEAR ENERGY AND THE LESSONS LEARNED FROM THE ATTEMPTS MADE TO INTRODUCE A NUCLEAR PROGRAM

EYYUP LÜTFİ SARICIELECTRICITY GENERATION CO.

TURKEY

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NUCLEAR ACTIVITIES IN TURKEY

•ESTABLISHMENT OF ATOMIC ENERGY COMMISSION (AEC) IN 1956,LATER REESTABLISHED AS THE TURKISH ATOMIC ENERGY AUTHORITY (TAEK)

• BECAME AN IAEA MEMBER STATE IN 1957

•ESTABLISHMENT TURKISH ELECTRICITY AUTHORITY (TEK) IN 1970

•ESTABLISHMENT NUCLEAR POWER PLANT DEPARTMENT IN TEK IN NOVEMBER 1971.

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ELECTRICITY GENERATION CO.

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TURKEY HAS TRIED TO LAUNCH A NUCLEAR POWER PLANT PROJECT IN AKKUYU THIRD TIMES, GIVE BRIEF INFORMATION ON THE TURKISH EXPERIENCES ,

LESSONS LEARNED AND THE SURROUNDING PROBLEMS OF

THE THREE ATTEMPTS ON THE BIDDING PROCESS AND

SUMMARIZING PROBABLE FUTURE PROBLEMS

INTRODUCTION

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TURKEY AND TEAŞ ARE STRONGLY LINKED EACH OTHER WITHOUT ANY DIFFERENCES

•PRODUCING,TRANSMITTING AND DISTRIBUTING ELECTRICITY TO CONSUMERS.

•INTERNATIONAL COMPETITIVE MARKET PRICES.

•IMPROVED ENERGY INDEPENDENCE

•SECURITY OF ELECTRICITY SUPPLY

•ENVIRONMENTAL PROTECTION

POLICY AND STRATEGY OF TURKEY AND TEAŞ

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INTEGRATION OF THE NUCLEAR POWER PLANTS INTO THE GRID SYSTEM OF TURKEY WILL BRING THE FOLLOWING PROFITS:

•LONG-TERM RELIABILITY OF THE PLANT (AROUND 40 YEARS OF LIFE-TIME)

•INTRODUCING A DIVERSE FUEL INTO THE TURKISH ELECTRICITY PRODUCTION SYSTEM BESIDE FOSSILE FUELS LIKE COAL,NATURAL GAS AND FUEL-OIL.

•WITH ONLY ONE FUEL LOADING,MONTHS OF RELIABLE OPERATION FROM THE ASPECT OF FUEL,

•DURING OPERATION,ENVIRONMENTAL FRIENDLY BEHAVIOUR OF THE PLANT.

POLICY AND STRATEGY OF TURKEY AND TEAŞ

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SHORT,MEDIUM AND LONG-TERM NUCLEAR POLICY OF TEAŞ:

•REALIZATION OF NUCLEAR PROJECTS IN “TURN-KEY”BASIS FOR THE BEGINNING,

•BY KNOW-HOW AND TECNOLOGY TRANSFER,

•IN THE SECOND PHASE,TO REALIZE NUCLEAR POWER PLANTS IN “PACKAGES” AUGMENTING INDIGENOUS SHARE,

•MAXIMIZING THE LOCAL SHARE AND MANAGING THE PROJECT ON “COMPONENT” BASIS.

POLICY AND STRATEGY OF TURKEY AND TEAŞ

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TO BE SUCCESSFUL IN THE ABOVE STEPS,

KNOW-HOW AND TECHNOLOGY TRANSFER ARE OF HIGH IMPORTANCE.

TO GET ACQUINTED WITH NUCLEAR PROJECT MANAGEMENT METHODS AND RIGHT ORGANIZATIONAL STRUCTURE SHOULD BE REACHED AND APPLIED. TO INCLUDE THE STRONG CONFORMITY TO ALL SIGNED TREATIES AND AGREEMENTS BY THE COUNTRY AND IN ADDITION,

TO RESPECT ALL SAFETY AND ENVIRONMENTAL STANDARDS ACCEPTED.

POLICY AND STRATEGY OF TURKEY AND TEAŞ

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TEAŞ HAS EXPERIENCED THREE INTERNATIONAL BIDDINGS FOR AKKUYU PROJECT.

THESE TOOK PLACE IN YEARS:

•1976-1980,•1983-1986 •1993-2000

EXPERIENCES OF THE PAST

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FEASIBILITY REPORTS

FIVE FEASIBILITY REPORTS HAVE BEEN PREPARED EXTENSIVELY ON THE FIRST NUCLEAR POWER PLANT PROJECT OF TURKEY WHICH WAS GOING TO BE REALIZED ON AKKUYU SITE.

THESE REPORTS ARE OF THE YEARS 1969,1973,1983,1996 AND 1997.

THE FEASIBILITY REPORTS HAVE BEEN PREPARED IN YEARS 1969 AND 1973 GENERALLY WITHOUT HAVING ANY SITE LICENCE BUT THE OTHERS CONSITS OF SITE LICENCE.

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THE FIRST ATTEMPT :1976-1980 PRESTUDY BEFORE BIDDING

BEFORE THE BIDDING ANNOUNCEMENT, TEAŞ’S (FORMERLY TEK) ISSUES WERE OVERCOMED:

STRUCTURING THE ORGANIZATIONS OF NUCLEAR POWER PLANTS DIVISION AND STAFFING IT,

TRAINING OF THE STAFF,SELECTING A FOREIGN CONSULTANT PREPARATION OF

THE BID SPECIFICATIONS,SITE SELECTION AND OBTAINING THE SITE PERMIT,BID EVALUATION AND CONTRACT NEGOTIATIONS TO

OBTAIN THE REALIZATION OF THE CONTRACT

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THE FIRST ATTEMPT :1976-1980 MANPOWER DEVELOPMENT

TO STRUCTURE AND TO DEVELOPE MANPOWER AND THE ORGANIZATION OF THE NPP DIVISION:

A NUMBER OF HIGHLY QUALIFIED TECHNICAL TURKISH STAFF WAS INVITED FROM ABROAD,

AN EFFECTIVE TECHNICAL TRAINING PROGRAM WAS APPLIED ON THE REST OF THE STAFF,

THE TRAINING WAS REALIZED WITH THE HELP OF INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA) , ELECTRICITE DE FRANCE (EDF) AND KRAFTWERK UNION (KWU)

EITHER AS COURSES OR ON THE JOB TRAINING

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THE FIRST ATTEMPT :1976-1980PREPARATION OF THE BID SPECIFICATIONS

AN ENGINEERING CONSORTIUM COMPOSED OF FOUR COMPANIES UNDER THE LEATHERSHIP OF SUISELECTRA FROM SWITHZERLAND,

*GAAA-LATER NOVATOME-(FRANCE),*EMCH-BERGER ( SWITZERLAND*BASSLER-HOFFMANN ( SWITZERLAND) WAS ENGAGED INTO THE PROJECT.

THIS CONSORTIUM HAS PREPARED THE BID SPECIFICATIONS UNDER CLOSE COLLOBORATION OF TEK’ PERSONNEL.

A SET OF VOLUMES CREDITED INTERNATIONALLY FOR A “PACKAGE TYPE”BIDDING WAS READY

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THE FIRST ATTEMPT : 1976-1980 SITE SELECTION

A NUMBER OF SITE LOCATIONS WERE CONSIDERED AT THE BEGINNING,

AKKUYU LOCATION WAS SELECTED,ENVIRONMENTALINVESTIGATIONS;SEISMIC,TECHTONIC

,GEOLOGIC,METEOROLOGICAL,HYDROLOGICAL,SOCIO-ECONOMIC AND OTHERS HAVE BEEN COMPLETED BY TURKISH GOVERMENTAL INSTITUTIONS,UNIVERSITIES AND BY THE CONSORTIUM’S TECHNICAL STAFF AS WELL AS THE PERSONNEL OF NUCLEAR POWER PLANTS DIVISION,

THE APPLICATION INCLUDING THE REPORTS WERE FOUND SATISFACTORY BY TAEK ,

THE SITE PERMIT WAS GRANTED ON 11TH JUNE 1976 .

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THE FIRST ATTEMPT :1976-1980BID EVALUATION AND CONTRACT NEGOTIATIONS

THE INTERNATIONAL BIDDING WAS ON THE BASIS OF PACKAGES CONSISTING OF:

NUCLEAR ISLAND WITH THE FIRST FUEL LOADING, TURBINE –GENERATOR AND BALANCE OF PLANTS

INCLUDING THE SWICHGEAR. PACKAGES FOR CIVIL WORKS AND LONG-TERM FUEL

SUPPLY WERE LEFT FOR THE CONSEQUENT BIDDINGS.

THIS TYPE OF BIDDING’S AIM WAS MAXIMIZE THE LOCAL SUPPLY WITH MAXIMUM TECHNOLOGY TRANSFER EFFORTS

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THE FIRST ATTEMPT :1976-1980BID EVALUATION AND CONTRACT NEGOTIATIONS

BIDDING WAS MADE IN 1977,SELECTED FIRMS ARE : ASEA ATOM,FOR THE NUCLEAR ISLAND AND

ELECTRO-MECHANICAL SYSTEMS, STAL-LAVAL FOR THE TURBINE-GENERATOR AND

BALANCE OF PLANT SPIE-BATIGNOLL FOR CIVIL WORKS( DURING

NEGOTIATION). DISCUSSIONS WERE HELD WITH EACH OF THESE

COMPANIES SEPARATELY WITH THE GENERAL ATTENDANCE OF THE ENGINERING CONSORTIUM MEMBERS ON DIFFERENT DISCIPLINES

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THE FIRST ATTEMPT :1976-1980 MAJOR DIFFICULTIES DURING CONTRACT

NEGOTIATIONS

MAJOR DIFFICULTIES: THE LIMITED EXPERIENCE OF THE DIVISION’S STAFF ON

A BIG SCALE NUCLEAR PROJECT CONTRACT REALIZATION,

HIGH-LEVEL BUREAUCRATICAL AND POLITICAL ANXIETIES ON THE PROJECT

100%FINANCE REQUIREMENT OF TURKISH GOVERMENT APPROVAL OF THE CONTRACT COULD NOT TAKE PLACE

UNTIL SEPTEMBER 1980 AND DISCUSSIONS CEASED TO CONTINUE AFTER 12TH SEPTEMBER 1980 MILITARY ACTION.

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THE FIRST ATTEMPT :1976-1980 GAINED EXPERIENCE DURING NEGOTIATION

SELECTING AKKUYU SITE AND OBTAINING THE SITE PERMIT,

TRAINED STAFF TO PREPARE THE BID SPECIFICATIONS,TO HANDLE THE EVALUATIONS AND PROCEED IN CONTRACT NEGOTIATIONS,

GENERAL INFORMATION ACCUMULATION ON NUCLEAR POWER PLANT PROJECTS.

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THE SECOND ATTEMPT: 1983-1986

PREPARATION OF BID SPECIFICATIONS BY THE DIVISION’S STAFF ON TURN-KEY BASIS,

OPENING AN INTERNATIONAL BIDDING,

RECEIVING OFFERS FROM SEVEN BIDDERS,

DELIVERANCE OF LETTER OF INTENDS TO: AECL(CANADA),665 MWe, AKKUYU KWU(GERMANY),990 MWe, AKKUYU GE(USA) ,1185 MWe, SINOP

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THE SECOND ATTEMPT: 1983-1986

UNTIL 30TH AUGUST 1984 THE GREAT MAJORITY OF CONTRACT SCOPE WERE FINALIZED WITH BOTH AECL AND KWU.

BOTH COMPANIES HAVE BROUGHT THE FULL AMOUNT OF CREDITS FOR EXPORTS AND ADVANCE PAYMENT WITH A PART OF THE CREDIT NECESSARY FOR LOCAL EXPENDITURES.

THE CONTRACT APPROACH HAS CHANGED “BOT”,MODEL IN SEPTEMBER 1984.

BEGINNING OF YEAR 1986 DISCUSSION COLLAPSED DUE TO: FINANCIAL STATE GUARANTEES AND PARTLY THE CHERNOBYL ACCIDENT

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THE SECOND ATTEMPT: 1983-1986 EXPERIENCE GAINED BY TURKEY

THE CAPABILITY OF PREPARATION OF BID SPECIFICATIONS FOR A NUCLEAR POWER PLANT ON TURN-KEY BASIS,

THE EXPERIENCES OF FORMING AND FINALIZING THE CONTRACT AND ITS ANNEXES BOTH IN CONVENTIONAL AND BOT MODELS,

FORMING THE STRUCTURE OF ORGANIZATION FOR BOT MODEL BEING THE FIRST TIME ON THE WORLD FOR SUCH A BIG SCALE PROJECT.

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THE SECOND ATTEMPT: 1983-1986EXPERIENCE GAINED BY TURKEY

DISTURBING THE ADVANCE OF THIS PROJECT:

CHANGING THE CONTRACT APPROACH COMPLETELY FROM CONVENTIONAL TO BOT MODEL.

TO CHANGE THE CONTRACT APPROACH AND MODEL WAS THE MOST RISKY ACTION DURING NEGOTIATIONS CAUSING A DEFINITE NEGATIVE EFFECT ON EFFORTS.

MOREVER IF THE BOT MODEL WAS INTRODUCED AT THE VERY BEGINNING BEFORE INTERNATIONAL BIDDING ANNOUNCEMENT OR WITH LETTERS OF INTEND,THE SUPPLIERS MIGHT BRING SOUND SOLUTIONS TOGETHER WITH TEK TO GO ON.

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THE THIRD AND THE LATEST ATTEMPT:1993-2000

REFRESHED TEAŞ NUCLEAR PROGRAM,STARTED BY INTEGRATING THE AKKUYU PROJECT INTO

THE FIVE YEARS INVESTMENT PLAN IN 1993, SELECTED KAERI AND GAMB,KOREAN AND TURKISH

ENGINERING COMPANIES, TO PREPARE A GENERAL REPORT ON WORLD’S

NUCLEAR SITUATION AND RECOMMENDATIONS FOR REALIZATION OF AKKUYU PROJECT

TO PREPARE BID SPECIFICATIONS BY USING THE ONE USED FOR 1983 TURN-KEY BIDDING

AN INTERNATIONAL BIDDING WITH 100% FINANCE PRE-CONDITION OPEN TO ALL TYPES WAS ANNOUNCED ON 17TH DECEMBER 1996.

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THE THIRD AND THE LATEST ATTEMPT:1993-2000STEPS OF THE AKKUYU NPP PROJECT

RECEIVING THE OFFERS ON 15TH OCTOBER 1997 FROM AECL(CANADA), NPI(FRENCH-GERMAN) WESTINGHOUSE(USA) SELECTING ANOTHER CONSULTANT, EMPRESARIOS

AGRUPADOS (EA) ( SPAIN) AND THEIR SUBCONTRACTOR SERDULA SYSTEM.CO.(CANADA),09 FEBRUARY,1998

STARTING TECHNICAL EVALUATION ON MARCH 1998START OF POSTPONES ON 15TH OCTOBER 1998 FINALIZED BOTH TECHNICAL AND ADMINISTRATIVE,

COMMERTIAL AND ECONOMICAL EVALUATIONS BY TEAŞ’S EVALUATION COMMITTEE ON MAY 1999.

SUSPENDED THE PROJECT FOR AKKUYU ON 24TH JULY 2000.

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CONCLUTIONS FOR THE THREE ATTEMPTS EXPERIENCE GAINED BY TURKEY

SITE SELECTION CAPABILITY.THERE IS ONE SITE ALREADY HAVING THE SITE PERMIT.

EXPERIENCED STAFF TO PREPARE THE BID SPECIFICATIONS BOTH IN PACKAGE-VICE AND IN TURN-KEY BASIS.

TECHNICAL,ADMINISTRATIVE,COMMERTIAL AND ECONOMICAL EVALUATION EXPERIENCE.

CAPABILITY OF CARRYING OUT CONTRACT NEGOTIATIONS,AND PREPARATION OF CONTRACT DOCUMENTS BOTH IN PACKAGE-VICE AND IN TURN-KEY BASIS FOR CONVENTIONAL TYPE CONTRACT.

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CONCLUTIONS FOR THE THREE ATTEMPTS EXPERIENCE GAINED BY TURKEY

EXPERIENCE IN BUILT-OPERATE-TRANSFER TYPE CONTRACT NEGOTIATIONS.

TRAINED AND EXPERIENCED TECHNICAL STAFF TO START AND CARRY THE PROJECT

DEVELOPED HER OWN NUCLEAR REGULATORY REQUIREMENTS.

SIGNED BILATERAL NUCLEAR AGREEMENTS BETWEEN TURKEY AND NUCLEAR MATERIAL EQUIPMENTS SUPPLIERS’ COUNTRY.

PUBLIC ACCEPTANCE TO THE TARGET PEOPLE

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CONCLUTIONS FOR THE THREE ATTEMPTS LOSSES FOR COUNTRY

THE NUCLEAR PROGRAM COULD NOT START EFFECTIVELY ALTHOUGH THERE HAVE BEEN THREE ATTEMPTS,

TURKEY HAS LOST SOME OF HER INDUSTRIAL PRODUCTION CAPACITY FROM TIME TO TIME BECAUSE OF ELECTRICITY INSUFFICIENCY,

KNOW-HOW AND TECHNOLOGY TRANSFER IN HIGH AMOUNTS HAVE BEEN DISRUPTED SINCE THE PROJECT COULD NOT BE STARTED,

INVESTED MONEY ON THE SITE AND ON THE STAFF HAVE PARTLY BEEN LOST,

LAST BUT NOT THE LEAST,THE ENERGY PROBLEM OF THE COUNTRY IS STILL IN THE AGENDA AND SEEMS TO CONTINUE.

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CONCLUTIONS FOR THE THREE ATTEMPTS LOSSES FOR COUNTRY

LOSTED ENERGY AMOUNT TO BE PRODUCED DURING THE THREE ATTEMPTS ON THE BIDDING PROCESS FOR FOURTY YEARS OPERATION PERIOD AND

LOSTED ENERGY PROFIT OR IMPORTING THIS MUCH ENERGY PAYMENTS

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CONCLUSIONS

WHEN THE DECISION WILL BE TAKEN TO PREFER ONE OF THE BIDDERS,IT WILL BE THE DAY OF RIGHT ECONOMICAL CONDITIONS FOR BOTH THE PROJECT AND THE TURKISH ECONOMY.

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THANKS FOR YOUR THANKS FOR YOUR PARTICIPATIONPARTICIPATION