The Ilisu Dam – There are alternatives!

According to the authors of the as-yet unpublished Environmental Impact Assessment (EIA) of the Ilisu Dam, undertaken by Hydro Concepts Engineering of Switzerland, no supply-side or demand-side alternatives to the dam were considered as part of the original feasibility studies undertaken for the project by the Turkish authorities. It is understood that the EIA, which has still to be made public, also failed to consider alternatives.

It is clear, however, that Ilisu is a relatively expensive power project. Independent energy consultants, both in Turkey and abroad, have stressed that power could be saved at a lower cost by modernising the country's transmission system, which has a reputation for being inefficient. There is also considerable scope for improving the efficiency of energy end use.

In the absence of such demand-side management measures, much of the energy produced by Ilisu, should the dam be built, will simply be wasted. Indeed, the case for addressing inefficiencies in the system before considering increasing supplies would appear overwhelming, particularly given the economic savings and new market opportunities which demand-side management presents.

Demand-side management and energy efficiency improvements aside, other sources of energy offer potential alternatives that have lower environmental costs whilst still being economically attractive. Such alternatives - from high-efficiency gas energy generation to truly renewable technologies, such as wind and solar - signal the future direction of the energy sector and their promise is already reflected in the market. Without particular support from governments, cumulative investment in renewable energy is expected to be $169 billion in 2000, rising to $889 billion in 2020. The renewable energy industry would probably regard these figures as conservative.

These alternatives have yet to be properly investigated by Turkey. However, they potentially offer far more cost-effective means of power generation than the proposed dam.

Recently, for example, the Swiss government approved an export credit guarantee for the gas-fired Ankara Power Project. When set against Ilisu, the costs compare extremely favourably:

• The Ankara Gas Power Project has a capacity of 720 Megawatt (MW) for a cost of $276 million. This translates into a cost of $0.38 million per Megawatt.

• Ilisu has a capacity of 1,200 MW for a cost of $1,520 million, which translates into a cost of $1.27 million/ MW.

In effect, the Ankara gas project is over 3 times more cost effective. This conclusion holds despite the Ankara project having higher operational costs, since its capital costs (interest charges etc) are lower than for Ilisu.

It is also of significance that, worldwide, the energy sector is turning its back on hydropower, which is increasingly viewed as a "sunset" industry. In Europe, for example, the emergence of an open, competitive power market and the advances in other power generating options, notably gas combined technology, have meant that hydro projects are no longer regarded as the most valuable assets of utilities and power companies. Indeed, when compared to other power sources, the outlook for growth in hydro is poor - just 4 per cent a year worldwide for the period 1990 to 2020. This is much lower than for other power industries and stands in sharp contrast to renewables which are growing at 10-20 per cent a year.

Moreover, as Roberto Picciotto, Director-General of Operations Evaluations at the World Bank, points out, the hydro industry has proved itself slow to face up to the changing political, economic and financial landscape in which the power industry is now operating as a result of the increasing privatisation of infrastructure development. Although proposals for Independent Power projects (IPPs) have mushroomed since the early 1990s, only 11 per cent of the greenfield IPPs under development worldwide in 1998 were dams - and only a handful of these have reached financial closure. Picciotto recently told a high-level industry conference that "Unless the industry responds promptly to the challenges it faces, it could become obsolete".

Such figures would suggest that the export credit agencies involved in Ilisu should consider redirecting their funds so as to encourage diversification into renewable energy technologies, instead of supporting an industry which even the dam industry's house journal "International Water Power & Dam Construction" describes as "embattled".

Given the potential offered by solar power, it may also be argued that the Republic of Turkey would be better advised to opt for a solar programme, particularly in view of the potential opportunity for Turkey to establish a competitive edge in the technology. In addition to possible cost advantages, embarking on such a programme could promote Turkey to a leading position in a key technology for the 21^st century. At present, no other country has established a mould-breaking programme in this area.

A large-scale solar programme would also be likely to be highly beneficial to Turkish trade. The use of solar energy avoids the import of fuel. Indigenous production would ensure that the overwhelming majority of the value of the projects would be retained in Turkey, with Turkey lining itself up to become a major exporter of solar technology in the future.

Moreover, because solar power is flexible, a solar programme can easily be adjusted as power requirements emerge. An additional advantage is that solar plants can be installed in relatively small numbers near key areas of demand, so avoiding the need to expand the power grid at great cost. A solar programme would also be less at risk than Ilisu from global warming, which could dramatically decease the flow of the Tigris.