China is in volume the country with the most installed renewable energy plants, but its investment in coal worldwide destroys every good effort in the long run. It's first direct investment in Turkey, the Hunutlu Power Plant
, is an environmental sin and besides it is not profitable at all. Based on an investment cost of $1.7 billion, Hunutlu coal-fired thermal power plant will only break even 26 years after becoming operational.
When the construction period is added to the calculation, break-even period extends to 30 years. Based on an investment cost of $2.1 billion, the plant is unable to pay back the investment over its 30-year long economic life in Adana, Turkey. The report 'Feasibility of Coal in the Age of Renewable Energy: Hunutlu Thermal Power Plant Case
', jointly prepared by WWF Turkey and SEFiA (Sustainable Economy and Financial Research Association), analyses 16 different scenarios with variables related to electricity price and calorific value under different capital and fixed operational costs. It turned out that in none of these scenarios did the plant make a profit.
Coal is toxic and a bad investment
According to information from different sources, the investment cost of the plant is believed to be between US$ 1.7 billion and US$ 2.1 billion. 78.21% of the shares of Hunutlu Thermal Power Plant
is owned by the Chinese Shanghai Electric
Power Co., the rest by Avic International Project Engineering Company and two undisclosed Turkish investors. Prepared with the assumption that current market trends will continue and that there will be no excessive fluctuation in prices, the report points out that investing in the Hunutlu thermal power plant is not economically meaningful for companies and financiers.
The studies further reveal that this situation, as has happened in the past, will worsen if market conditions develop against coal."Our net present value calculations show that under the capital cost scenario which corresponds to the ultra-supercritical coal-burning technology, the Hunutlu thermal power plant is unable to pay back its capital cost over a period of 30 years, even under the assumption of high electricity prices. It is therefore worth questioning the political economy and financial sustainability of this investment, which would have an installed capacity of 1320 MW if completed," said Bengisu Özenç, Founding Director of SEFiA and the author of the report.
The controversial project, being constructed in the Sugözü coast of Adana, presents numerous setbacks
. Among other factors, Hunutlu's Final Environmental Impact Assessment report has shown an exceed limit value for air pollution, and the establishment of a thermal plant in the area is also illegal according to the applicable legislation in Turkey due to sea turtles protection. Adana is also an important site for Turkey’s agriculture. If the power plant is implemented, it will increase the cumulative pollution burden arising from other thermal plants and industrial activities, and have a negative effect on agricultural production in the region. But not to forget: mining is also an awful dangerous business and unhealthy.
"In the age of climate breakdown
, financing fossil fuel projects is unacceptable, and financiers like ICBC should lead the way and help accelerate the energy transition to a low-carbon economy. Renewable energy investments can be a major force in Turkey's economic recovery, generating decent returns on investment while boosting employment opportunities. The construction of Hunutlu coal power plant is an offense which will bring extensive damages to the ecosystems and to the livelihoods of thousands of people on the surroundings of the project. Communities impacted by coal projects deserve affordable, just, clean and safe energy instead," said Efe Baysal, 350.org.