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Cablegate: Turkey Nuclear Energy - Announce It and They Will

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ANKARA 006948

SIPDIS

SENSITIVE

E.O.12958: N/A
TAGS: ENRG EINV TRGY TU
SUBJECT: TURKEY NUCLEAR ENERGY - ANNOUNCE IT AND THEY WILL
COME

REFS: A. ANKARA 6802
B. ANKARA 6867

1. (SBU) SUMMARY: Turkey is pursuing the ambitious goal of
adding nuclear energy to its power mix over the next decade,
and is seeking U.S. or French know-how as its technology of
choice. Raised earlier this year when PM Erdogan visited
France, nuclear energy cooperation was also hastily added to
the energy laundry list for President Putin's recent visit.
Given a strong environmental lobby and the challenge of
gaining either private or government financing, it is not
clear that Turkey's nuclear dream will be realized. End
Summary.

2. (U) As mentioned in his September 21 meeting with
Secretary Abraham and following up on statements made during

SIPDIS
PM Erdogan's July visit to France, Turkey Energy Minister
Hilmi Guler announced in November that Turkey intended to
build three nuclear power plants that would come into
operation in 2011-2012. Guler asserted that the three plants
would diversify Turkey's energy mix and stem an electricity
shortage forecast for 2010 and beyond. He said the plants
would meet up to 10% of Turkey's total energy consumption.
Turkey has tried on two other occasions in the last thirty
years to build a nuclear power station, but cancelled the
tenders each time for cost and environmental reasons. In
2000, the GOT decided to abandon a planned - but oft-delayed
- $4 billion 1,300 MW nuclear power plant at Akkuyu on the
southern coast due to financial problems and opposition from
environmental and anti-nuclear groups.

3. (SBU) Turkish Atomic Energy Authority (TAEK) President
Okay Cakiroglu told EmbOffs in a December 3 meeting (Ref A)
that the GOT was targeting three to four nuclear plants with
5,000 MW of generating capacity. He said the GOT's
application of a special model for projecting technical
limits and energy mix for hydroelectric, wind, coal, and gas
generation had yielded the above amount of nuclear power as
output. Cakiroglu said the plan was for the plants to come
on line 2012-2015, but admitted that this was an aggressive
schedule. The TAEK head stressed that the GOT would target
only U.S. or French technology and that the negotiations
would be "short and focused", aiming for financing by 2006
and construction start by 2007. Cakiroglu said they were
talking to Westinghouse and other companies, focusing on the
pressurized water reactor type. He noted the French were
ahead because they were putting in place this technology in a
new plant in Finland, whereas Westinghouse's new design was
not yet licensed. In response to EconOff's query on
financing, Cakiroglu recognized that private investors would
have limited appetite for nuclear in general and this size of
a project in particular. Therefore, he said that they would
have to depend on government financing. Finally, Cakiroglu
noted that TAEK now reported directly to the Energy Ministry,
rather than the previous direct line to the Prime Ministry.

4. (SBU) In the aftermath of President Putin's visit,
nuclear cooperation was included in the broad list of general
energy cooperation (Ref B). The press reported that the
Russian Energy Minister promised to send Russian nuclear
experts and to help Turkey begin construction of nuclear
plants.

5. (SBU) At a meeting at Baymina natural gas fueled thermal
power plant in late November, plant management claimed that
the government had "cooked" its model to gain the nuclear
result. They described this as a political, rather than
economic, decision, and contrary to the free market.
Moreover, they noted it would increase Turkey's inflexible
base production (to the detriment of natural gas, which is
more flexible). The managers were skeptical of the GOT's
ability to finance nuclear power plants.

6. (SBU) COMMENT: The GOT does seem serious about pursuing a
nuclear option, but we agree that this is more for political
than economic reasons. The assumption that the Turkish
Government would provide the sizeable financing seems
particularly unrealistic given Turkey's current IMF-supported
efforts to reduce government spending and high debt. At the
same time, Turkey's track record of unresolved problems with
foreign investment in the energy sector make it similarly
unlikely that foreign firms will be ready to fund expensive
new nuclear plojects. Nevertheless, with strong economic
growth seemingly set to continue and some observers
predicting that electricity demand will outstrip supply by
2007, Turkey does need to start thinking creatively now about
how to increase its production base. End Comment

7. (U) Baghdad minimize considered. EDELMAN

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