The first pouring of concrete for Unit 1 of the Akkuyu nuclear power plant took place in April as Turkish President Tayyip Erdogan and Russian President Vladimir Putin watched on via video link.
This $20bn project is Turkey’s first foray into nuclear power and will comprise four reactors, each providing 1, 200MW of energy, the equivalent of around 10% of Turkey’s total needs.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe plant will be built by Russia’s state atomic energy corporation, Rosatom, using Russian Water-Water Energetic Reactor (VVER) technology.
The project, Erdogan has said, is of “great importance” to the country and will help it end its over-reliance on energy imports, which reportedly cost around $50bn a year.
Diversifying Turkey’s domestic energy supply, Erdogan hopes, will assist the country in becoming one of the richest in the world.
Yet Turkey and Russia make for complicated bedfellows. Critics of the deal warn that their partnering on such a complex project in a strategic location has worrying geopolitical significance, and is actually counterproductive to Turkey’s future energy needs.
Russia’s influence on Turkey’s energy mix
According to its government, Turkey has had the highest rate of growing energy demand among OECD countries over the last 15 years. Yet it meets only around 26% of this need from its own domestic resources.
To diversify its supply, the government is looking to achieve 30% of total electricity generated from renewable sources by 2030. Akkuyu, the first reactor of which is planned for operation in 2023, the same year Turkey celebrates 100 years since its modern founding, will add to this.
However, for now, most of the country’s demand is met by imports of oil and gas from Russia. In fact, according to S&P Global, in 2017 Turkey’s imports from Russia’s state gas company, Gazprom, surged 17.3% to 29BCM (29.034BCM in total).
To cement this supply, the countries have collaborated on several key projects, including building the €11.4bn TurkStream lines from Russia to Turkey, and in 2003 completing the Blue Stream pipeline.
Akkuyu is the latest collaboration. Yet, while the project might seem convenient, there could be trouble ahead.
“Turkey already has a strong relationship with Russia and this [nuclear plant] was its next step,” says Torrey Taussig, post-doctoral research fellow for foreign policy at The Brookings Institution.
“However, from Turkey’s perspective, it is in its own national security and economic interests to diversify where it gets its energy from, but this deal exacerbates an over reliance on Russia for its energy needs,” she adds.
Geopolitics and energy trade
Akkuyu essentially gives Russia even more control of Turkey’s vital energy supply.
And, despite their collaborations, Turkey and Russia’s relationship has not always been plain-sailing. In November 2015, they soured considerably after Turkey shot down a Russian fighter plane, resulting in Russia imposing sanctions on the country.
All was eventually forgiven after an official apology but what if their relationship should take another turn for the worse, would Turkey suffer again?
As Sarman Gencay, a professor at Istanbul Technical University, told Deutsche Welle, “The project’s future is in the hands of our Russian friends, who have all the knowledge.
“Hopefully there will be no mishap. Because when a nuclear energy project comes to a halt, it is always the contracting country left with the bill.”
Additionally, if, for some reason, Turkey decided not to uphold its end of the deal, Russia would surely penalise the country.
Another concern is that Turkey does not have free media and therefore independent critique of the project is difficult.
A snap election called by Erdogan could further complicate the situation, though he is the favourite to win. However, if the election is not perceived as fair and transparent, it could create discontent in the country.
Standing against the West
It’s possible that Erdogan has put Turkey’s best interests aside to feed his discontent with the West and countries that have been critical about his authoritarian-style of leadership and distain for democracy.
Some, including Taussig and her colleagues at the Brooking Institute, Pavel Baev, senior fellow in the Center on the United States and Europe and a research professor at the Peace Research Institute Oslo (PRIO), and Kemal Kirişci, senior fellow and director of the Center on the United States and Europe‘s Turkey Project at Brookings, believe Putin and Erdogan’s relationship is largely about leveraging their power against the West.
In a report on the relationship between the two, Baev and Kirişci say there is a ‘pronounced similarity’ in the way the leaders conduct themselves, “and the two autocratic leaders share mistrust of Western policies and resentment for being excluded from the European integration project”.
They add that the leaders’ relationship is based on ‘reluctant pledges of cooperation’.
A case-in-point is the fact that Russia needs Turkey’s cooperation in Syria and Turkey needs Russian energy exports.
However, Taussig says that for Russia it is more strategic than that: the Akkuyu plant, located by the Mediterranean coast, 500km south of Ankara, gives Putin a significant presence in a strategic location.
“The project is located less than 1km from Turkey’s Southern Mediterranean border, this is an area Russia has, in recent years, increased its naval presence and it is becoming a renewed area for competition between the US, Europe and Russia,” she explains.
“I think Russia building a nuclear plant here has important geopolitical and security implications, not just for Turkey, but Europe and the US. This is a way for Russia to exert its energy and influence in the Eastern Mediterranean,” she adds.
Turkey’s energy future
Taussig says the project is part of Turkey’s “political reorientation” away from Europe.
However, if Turkey wants to become one of the ten richest countries in the world, securing affordable, reliable energy supplies will be paramount to achieving this goal. In this context, its relationship with Russia makes little sense.
Despite Turkey’s scepticism of the West, Taussig says the country’s economic future lies there.
“If you look at foreign direct investment from Europe to Turkey, it vastly outweighs what it gets from Russia, so in the future it would be in its interests to negotiate these deals with European partners,” she says.
Russian investment in Turkey constitutes only 3% of all foreign direct investment into the country between 2007 and 2015, while investment from EU member states during this time was 73%.
What lies on the horizon for the two countries’ relations remains to be seen, as does whether Rosatom will meet its ‘ambitious’ 2023 deadline for Akkuyu’s first working reactor, and if it doesn’t, could that sour relations again?
But as Baev and Kirişci write, ‘Russian-Turkish relations have experienced such sharp turns in the last couple of years that further volatility appears to be the only safe forecast’.
