By Esra Aygin
September 10, 2023
An agreement signed with a private Turkish company to produce all the electricity in the north is riddled with problems say those in the field, who fear further dependence on Turkey
Turkish Cypriot head of coalition Unal Ustel and Turkish vice president Cevdet Vilmaz sign the agreement
Turkish Cypriot authorities have pledged to give up local electricity production entirely and become completely dependent on a planned cable from Turkey to the north.
The provisions of the recent agreement with private Turkish energy company Aksa to create the electricity cable link reveal that the pledge to get power exclusively through this cable was made blindly, as the details of the project – like the capital cost, sales price or transmission capacity – are still unclear.
According to the agreement, Aksa, which has close ties with Turkey’s ruling Justice and Development Party AKP, will carry out a feasibility study by July 2024. An ‘interconnection construction and operation agreement’ will then be signed, and within five years the cable link will be fully operational.
Following a memorandum of understanding for an electricity cable project from Turkey signed between Turkish Vice President Cevdet Yilmaz and ‘prime minister’ in the north Unal Ustel, an agreement was signed between Aksa and the Turkish Cypriot public electricity authority Kib-Tek on July 19. No public tender was held for the selection of the company to carry out the electricity cable project and it is not clear how Aksa was chosen.
With the agreement, Turkish Cypriot authorities have pledged that once the cable is operational all electricity needs in the north will be met by it. “The existing electricity plants will only be put into use if the electricity supplied through the cable is inadequate or there is a technical need,” the agreement states.
“After the feasibility study we will rapidly take the steps to materialise this giant project. We will put the signature of Aksa on this energy bridge with the TRNC,” Aksa CEO Cemil Kazanci said after the agreement was signed.
“We are realising a 30-year-old dream. This project will make TRNC a real part of the ‘Turkish Century’,” Ustel added.
Aksa’s facility in the north
Even though the idea of the cable link has been voiced at various points in the past, it was set as a top priority by Turkish President Recep Tayyip Erdogan after his re-election in May. Branded “the second project of the century” after the water pipeline from Turkey to the northern part of Cyprus, the cable link is promoted by Turkish and Turkish Cypriot officials as “the solution to the electricity woes on the island”.
Turkish Cypriots have been suffering from sweltering power cuts mainly due to lack of necessary maintenance, repair and investments in the electricity infrastructure. Moreover, as electricity is mainly produced using imported fuel oil, high electricity prices due to the volatility in fossil fuel prices, the war in Ukraine and the depreciation of the Turkish lira, are crippling the community.
Experts, civil society and opposition parties are questioning however, the logic of making such a huge commitment without a tender and without knowing the costs.
“Handing the electricity cable project to a private company without a public tender and with a guarantee to purchase… is in total violation of law. There is no provision in the agreement that stipulates how the costs will be calculated in the electricity cable project and this violates basic principles of economy. This agreement is aimed at selling off the assets of the community and is a destructive step and an illegal attempt that does not protect the interests of the people,” the Republican Turkish Party CTP, which took the agreement to the High Administrative Court along with the Cyprus Turkish Electricity Authority Workers Union El-Sen, said.
The Turkish Cypriot Chamber of Mechanical Engineers, which filed a criminal complaint over the agreement saying no regard was paid to public interest, said that the agreement only serves to give a private company a monopoly and increase its revenues.
“How can you ever say, ‘I will get 100 per cent of my country’s electricity through a cable?” asked chamber president Ayer Yarkiner. “How can you be this clueless? The term ‘project of the century’ is only being used out of ignorance. Nowhere in the world can a country put its signature under an investment without knowing its cost effectiveness.”
However, this is not the only point of contention. Although the agreement mentions an ‘interconnection’ none of the provisions describe a two-way transmission of electricity between Turkey and the north. The method that is envisaged in the agreement seems to be a system whereby electricity will be transmitted one-way from Turkey to the north by Aksa.
“Interconnection in the world is an alternative to diversify resources and decrease cost or ensure energy supply in case of failures,” explains energy economist and electrical engineer Yusuf Avcioglu. “There is no two-way transmission here. The agreement says ‘you will not produce electricity. I will give it to you through the cable.’ This is not interconnection… We have nothing to gain from this… We are totally surrendering to Aksa and Turkey.”
The second power station in the north near Kyrenia
The Turkish Cypriot ruling coalition sold the project to the public by reassuring them that they would be exporting the power generated by solar energy to Turkey through the cable and reducing energy costs.
Besides a solar farm, households in the north have the right to set up solar panels and sell to the grid.
“You lied to people,” CTP deputy Asim Akansoy said in a speech to the Turkish Cypriot assembly. “You said it would be a two-way transmission and we would sell our solar energy. Now you are handing 100 per cent of energy production to Aksa with a guaranteed purchase agreement.”
Experts agree that a simple one-way cable rather than an interconnection is detrimental for the Turkish Cypriot community, and being totally dependent on Turkey for electricity supply is one of its biggest risks.
Electricity prices are also expected to spike because the investment cost of the cable project plus all the operational and other expenses would be reflected in electricity bills. Reports in the Turkish media put the cost of the cable project to somewhere between $500 million to $1 billion.
At the same time, Turkey is an observer member of the European Network of Transmission System Operators for Electricity (ENTSO-E), which is the ultimate arbiter regarding the connection of a third state to the main grid. As long as the Cyprus problem remains unresolved, ENTSO-E is not likely to grant a permit to Turkey to make an interconnection with the northern part of Cyprus.
The contentious agreement also stipulates a guarantee of purchase whereby Aksa, through its electricity plant in Kalecik/Gastria in the Famagusta district, will produce at least 49 per cent of total electricity generated in the north for 15 years “during the transitional period until the cable is operational.” Despite persistent questions by opposition parties and civil society, Turkish Cypriot authorities have not been able to explain why this guarantee of purchase has been given.
This is seen by experts as a move to ensure Kib-Tek becomes idle even before the cable project begins operating.
“There is no limit to how much Aksa can produce,” explained president of the Chamber of Electrical Engineers Uner Kutalmis. “There should have been a limit so that the public electricity authority Kib-Tek remains relevant. There is no Kib-Tek anymore. There is only Aksa.”
After starting operations in the north in 2003, Aksa already produces 45 per cent of the electricity used in the northern part of Cyprus.
Furthermore, although the agreement gives the right to the Turkish Cypriot authorities to revoke it if Aksa fails to render the cable link operational in five years, an ensuing article states: “If either the Republic of Turkey or TRNC back out of the interconnection system, this will not be a reason for the revocation of this agreement.”
But you cannot just revoke this agreement after becoming so dependent on a private company, Avcioglu said.
“To be able to revoke this agreement, you need to have a production capacity that meets your needs. Right now, Aksa produces 45 per cent of the total electricity here. Do you have the capacity to cover that? No, not unless you make the necessary investments. Without doing that, you cannot just say, ‘I am revoking the agreement and I am surrendering half of the country to darkness’.”
https://cyprus-mail.com/2023/09/10/doubts-cast-on-giant-project-to-supply-norths-electricity/
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