VZCZCXRO5195
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHAK #6056/01 2930510
ZNR UUUUU ZZH
R 200510Z OCT 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 9533
INFO RUCPDOC/USDOC WASHDC
RHEBAAA/DEPARTMENT OF ENERGY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHUNV/USMISSION UNVIE VIENNA 0113

UNCLAS SECTION 01 OF 02 ANKARA 006056 
 
SIPDIS 
 
USDOE FOR CHARLES WASHINGTON 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
STATE ALSO FOR EB/CBA FRANK MERMOUD 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EINV BEXP TU
SUBJECT:  TURKEY'S NUCLEAR POWER QUEST AS BEAUTY CONTEST 
 
REF: A) ANKARA 2143 
B) 05 ANKARA 7390 
 
Sensitive But Unclassified.  Please handle accordingly. 
 
¶1.  (SBU) SUMMARY: Energy Ministry U/S Sami Demirbilek explained 
that due to legal and financial limitations, Turkey will rely on the 
private sector to realize its decision to add nuclear power to its 
energy mix.  He told us that the government's role is limited to 
providing an electricity purchase guarantee, establishing clarity 
for the appropriate legal and regulatory environment, and 
encouraging companies to make the most attractive applications for 
licenses, terming the process a "beauty contest".  Progress on 
ratification of the "Cooperation on Peaceful Uses of Nuclear Power" 
("123") agreement would help American companies participate in this 
potential opportunity.  The USG should consider offering assistance 
with its NRC (Nuclear Regulatory Commission) regulatory model and 
including Turkey in the Global Nuclear Energy Partnership (GNEP), 
building on discussions between Energy Minister Guler and Secretary 
Bodman in the U.S. last spring.  Demirbilek looks forward to a 
possible meeting with the U.S. NRC at an IAEA meeting in Vienna in 
November.  End Summary. 
 
--------------------------------------------- --- 
Turkey's Passive Nuclear Quest as Beauty Contest 
--------------------------------------------- --- 
 
¶2.  (SBU) In a September 28 meeting, Demirbilek cited the 
limitations of alternative sources (hydro, indigenous lignite, 
expensive natural gas imports) as a compelling reason for Turkey to 
add nuclear power to its energy mix.  He emphasized that nuclear 
power would meet projected electricity supply shortfalls, promote 
grid reliability, increase diversification of supply, and reduce 
reliance on imported energy sources.  Underscoring that the 2001 
electricity law identified the private sector as the sole source of 
new energy investment, Demirbilek said the GOT was not going to 
build nuclear plants.  Rather, the government's role is to 1) 
establish legal clarity and remove uncertainties for interested 
companies, 2) provide a purchase guarantee for electricity off-take, 
and 3) establish an appropriate regulatory regime. 
 
¶3.  (SBU) Demirbilek admitted that there was still lively debate 
within the GOT on the exact process and conditions for holding and 
awarding the "beauty contest" through which companies would apply 
for permits, but it would involve some combination of minimum 
electricity price and minimum purchase guarantee from the GOT.  The 
U/S said a draft Nuclear Energy Law - aiming to establish clear 
legal and operating environment - was under consideration by the 
Cabinet of Ministers, but there was still some disagreement at the 
Prime Ministry and the State Planning Organization about the extent 
of state support that would be made available.  Press accounts have 
reported a series of planning meetings of domestic and foreign 
companies convened by the Energy Ministry to hone next steps. 
Demirbilek said that the winner(s) of a potential "beauty contest" 
would be awarded a license and a purchase guarantee.  He expected 
that domestic companies would partner with international ones to 
bring appropriate expertise and financing capability. 
 
--------------------------------------------- -- 
Need for Assistance on Regulator - NRC as Model 
--------------------------------------------- -- 
 
¶4.  (SBU) Demirbilek elaborated on Turkey's need for help in 
developing a regulatory approach, noting that the existing Turkish 
Atomic Energy Agency (TAEK) and the energy regulator (EMRA) were not 
equipped to play this critical role.  Citing the U.S. NRC as a 
natural model, he said he hoped to meet with the U.S. NRC at an IAEA 
meeting in Vienna in November.  Reminding us of discussions on 
cooperation for nuclear power with Secretary Bodman on Minister 
Guler's visit to Washington last spring, he noted that lack of 
ratification by the U.S. of the "Cooperation on Peaceful Uses of 
Nuclear Energy" was an impediment to U.S. companies' participation 
in projects.  MFA told us that the GOT was also looking to Finland 
as a potential regulatory model for nuclear power. 
 
¶5.  (SBU) COMMENT: The U.S. is a natural model and partner for 
commercial and regulatory aspects of Turkey's quest to add nuclear 
power to its energy mix.  Including Turkey in the Global Nuclear 
Energy Program (GNEP) - targeting developing countries seeking to 
embark on new programs, offering our NRC as proven regulatory model, 
and seeking to advance the stalled "Peaceful Uses" ("123") agreement 
would facilitate U.S. contribution to this opportunity and help 
dissuade Turkey for aiming at lowest cost alternative providers.  It 
is not clear how timely or successful Turkey's "beauty contest" will 
be in attracting the responsible international community to 
 
ANKARA 00006056  002 OF 002 
 
 
supporting Turkey's peaceful nuclear power quest. 
 
Wilson