Construction underway at Iskenderun

Turkey’s financial problems notwithstanding, construction is proceeding on the 2x605 MWe net coal-fired power plant at Sugözü on the Bay of Iskenderun. The plant is due to come into operation at the end of 2003. The plant, which is being provided on a build-operate model will be the largest hard-coal fired power plant in Turkey and the first Turkish station to run on imported coal.

The project company for the plant, called Isken (Iskenderun Enerji Uretim ve Ticaret AS), was formed in Ankara, Turkey, in 1998. It is a Turkish entity but its largest shareholder is Steag of Germany, which started life as a regional coal-fired electricity provider but is now an active player in international power and high technology. Isken is managing the whole project, under the leadership of Steag, and will be responsible for operation and maintenance. The only local shareholder in Isken is Gama Endustri Tesisleri Imalat ve Montaj AS.

Construction proper at Iskenderun started in early November 2000, with the pouring of first concrete for the boiler house foundations. The access road to the power station site and a bridge over the nearby river (Kizlarsuym Deresi) had already been completed in the weeks following the signing of loan facilities with the financing banks, on 26 June 2000.

Main components

The plant consists of two Benson boilers, two turbine generators, two flue gas desulphurisation plants, one 150 m high stack with two flues, a 380 kV switchyard and associated annex buildings. The net efficiency of the power plant is 40.2 per cent.

Dust in the flue gas is reduced to well below the statutory limits by electrostatic precipitators (ESPs) with an efficiency of 99.9 per cent. Following dust elimination in the ESPs the flue gases are cleaned in FGD units. Resulting sulphur dioxide emissions will be less than 400 mg/Nm3. During normal operation of the plant, some 60 t of bituminous coal fly ash per hour will arise in the ESP, and about 20 t of gypsum in the FGD units. The residues will be used as aggregate for cement production or to manufacture building materials (eg gypsum board).

The plant is seawater-cooled. The seawater is taken in through four cooling water pipelines, each with a diameter of 2.8 m, and around 400 m in length. Discharge is via four pipelines with a diameter of 2.4 m and a length of about 1200 m.

Boiler make-up water and service water will be obtained by desalination of sea water.

The electricity generated will be transmitted to the Turkish national grid via two 380 kV transmission lines, Sugozu-Adana (47 km) and Sugozu-Erzin (37 km).

Financing arrangements

Steag and its partners financed a quarter of the US$ 1.5 billion investment with their own funds. The remaining sum of approximately US$ 1.13 billion was made available by a bank consortium led by KfW, Dresdner Bank and WestLB. Using a security package Steag has aimed to limit the economic and political risk of the project to a minimum. The political risk for equity and loans is covered by a capital investment guarantee of the Federal Republic of Germany and by the export credit insurance agencies of the respective supplier countries. On that basis it was possible to obtain project financing on a non-recourse basis which limits the liability of the investors during the construction period to the amount of their own capital contribution.

The financing and supply contracts were signed by representatives of Steag, banks, and the equipment and coal suppliers involved.

The project is based on a 20-year electric-ity supply agreement entered into between Isken and the state-owned Turkish utility TEAS (Turkey Elektrik Uretim-Iletim AS). TEAS will take delivery of the electricity into its 380 kV grid according to the take-or-pay principle. Payment will be in US$. Performance of TEAS’ obligations under the Electricity Supply Agreement is secured by a guarantee of the Turkish government. On commencement of electricity supplies by the end of 2003, Steag expects the project to generate annual revenues of just under DM 800 million.

Equipment supply

An international consortium led by Siemens, including Babcock Borsig Power, Gama-Tekfen and Simko-Turkey, is to build the plant, under a contract placed by Steag.

The scope of supply and services to be provided by Siemens covered the entire planning of the new plant, supply of the two turbine-generator sets from the Siemens manufacturing plant in Mülheim and of the Teleperm XP instrumentation and control system. The Siemens scope also includes the mechanical and electrical equipment, the flue gas desulphurisation plant and various auxiliary systems. The value of the contract for Siemens/KWU amounts to more than EUR 410 million. By equipping the power plant with state-of-the-art technology, it will also fulfill the environmental protection requirements of the Turkish authorities and the World Bank.

Within the consortium, Babcock Borsig Power’s responsibilities include supply of the two Benson boilers, which the company manufactures under Siemens licence. The Turkish joint venture Gama-Tekfen is responsible for civil works. The coal transhipment facility will be supplied by the Lübeck-based company Oldendorff.

Siemens/KWU has previous experience of building a technologically pioneering large power plant in Turkey. This was at the beginning of the 1990s when it was leader of the international consortium that built the Ambarli combined-cycle power plant. Ambarli has a capacity of 1350 MWe and at the time was the largest plant of its kind in Europe. Ambarli was also the first power plant to achieve an efficiency level of 52.5 per cent, which was more than one percentage point above the contractually agreed figure, with as much as 53.2 per cent efficiency being demonstrated in peak-load duty.

Steag has concluded a supply contract with RAG Trading for around 3 million tonnes of bituminous low sulphur coal annually for the entire period of the electricity contract. The coal will be purchased on the world market. Two to three times a month coal shipments will be made by ocean-going bulk carriers into the bay of Iskenderun. These ships have a length of up to 320m and will eventually be able to transport loads in the region of 240 000 tonnes. In the bay of Iskenderun, the coal will be landed using special floating transshipment facilities (see illustration below).

The coal yard of the Iskenderun power plant will have a capacity of 800 000 tonnes. The power plant will consume around 450 t/h.

Developing the infrastructure

The Iskenderun coal-fired power plant project will contribute to developing the infrastructure in south-eastern Turkey. The country, which is interested in joining the European Union, is eager to develop its electricity supply system. At present, annual electricity output in Turkey amounts to 95 billion kWh while the electricity demand is expected to reach 130 billion kWh by the year 2001 and 270 billion kWh by 2010, according to recent figures from the International Energy Agency. Power demand in Turkey has been growing at about 7-8 per cent per annum recently.
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