ISTANBUL'S LANDFILL GAS UTILIZATION PROJECTS

C O N F I D E N T I A L SECTION 01 OF 03 ISTANBUL 000050

E.O. 12958: DECL: 02/01/2020
TAGS: ENRG SENV ECON PREL PGOV KGHG TU
SUBJECT: ISTANBUL'S LANDFILL GAS UTILIZATION PROJECTS

Classified By: CONSUL GENERAL SHARON A. WIENER FOR
REASONS 1.4(B) AND (D)


1. (C) Summary. Landfill gas utilization, a growing
alternative energy technology with compelling environmental
benefits, is in its early stages in Turkey. Ortadogu Enerji
won a tender from the Istanbul Municipality to implement and
run Istanbul's two landfill energy projects for 23 years, and
electricity production at its largest landfill power plant on
Istanbul's European side officially kicked off in April 2009.
Ortadogu Enerji's monopoly on Istanbul landfill gas-to-energy
projects probably is related to the company leadership's
personal ties to Prime Minister Erdogan, who was mayor during
the initial phases of the landfill conversions. Ortadogu
Enerji CEO Mehmet Gur said that the projects are already
profitable due to the large size of Istanbul's landfills. He
added that pending national legislation on renewable energy
will more clearly define future profit margins for the
company's landfill gas utilization endeavor. Turkey will
increasingly need to take environmental considerations into
account as it works to fulfill EU membership criteria, and
landfill gas and other biomass technology may play a small
part in increasing Turkey's energy efficiency. End Summary.

Landfill Gas-to-Energy
--------------


2. (SBU) Landfill gas utilization ("Copten enerji") is in its
early stages in Turkey, but is a growing energy technology
worldwide. Municipal solid waste contains materials that
decompose when dumped, compacted, and covered to produce
carbon dioxide and methane. Landfill gas energy facilities
capture the methane (the principal component of natural gas)
and combust it for energy. Istanbul's two landfill gas power
projects, both owned by Ortadogu Enerji, began producing
electricity last year. Landfill projects are limited in their
power-generation capacity, but our contacts at Ortadogu said
that Turkey has over 250 megawatts (MW) total capacity for
landfill projects, enough energy to support the monthly
requirements of approximately 714,000 average households in
Istanbul. They added that landfill gas is currently a more
reliable source of energy than wind energy. (Note: Istanbul
is one of the only viable and profitable landfill gas project
sites in Turkey because a very large population is required
in order to produce sufficient sources for the electricity,
but there are also existing projects in Ankara and Bursa. End
Note.)


3. (U) The environmental benefits of landfill gas projects
are compelling. According to Yusuf Gulut, an electrical
engineer at Ortadogu Enerji, Istanbul's landfill gas projects
result in a one million ton carbon dioxide equivalent
emission reduction each year. The total emission reductions
over seven years are estimated to be 6,900,000 tons of carbon
equivalent. Prior to the completion of these two landfill
gas-to-energy projects, Istanbul's established practice was
uncontrolled release of landfill gas which is a potentially
dangerous method of managing methane. Unless avoided by
placing pipes throughout landfills, accumulations of methane
can lead to explosions; in 1993 a methane explosion in
Istanbul's Umraniye Hekimbasi landfill claimed 39 lives.

Ortadogu Group Monopolizes Istanbul's Garbage
--------------


4. (SBU) Ortadogu Enerji won a tender from the Istanbul
Municipality in March 2007 to implement and run Istanbul's
two landfill energy projects for 23 years, and electricity
generation began in December 2008 with an official opening
ceremony -- attended by Prime Minister Erdogan -- in April

2009. CEO Mehmet Gur told Poloff that Ortadogu Enerji's
landfill gas project is the largest in Europe and one of the
world's top five. Ortadogu has two sites in Istanbul -- one
in Komurcuoda near Sile on Istanbul's Asian side and one in
Odayeri landfill near Kemerburgaz on the European side.
(Note: The Komurcuoda landfill contains more than 14 million
tons of solid waste and is situated on 44 hectares. The
larger Odayeri landfill contains over 32 million tons of
waste and is located on 51 hectares of land. End Note.). The
two sites together have an estimated production capacity of
between 30 and 40 MW of electricity -- two thirds of which is
in Odayeri -- and they are powered by 23 GE Jenbacher
landfill gas engines. Ortadogu Enerji representatives told us
they anticipate the project will reach full capacity this
year.

History and Mechanics of the Odayeri Landfill Project
-------------- --------------


5. (U) Turkey's first landfill gas to energy site, the
Odayeri landfill, is estimated at 4 MW capacity with the
inbuilt capacity to be upgraded to 6 MW. The landfill itself
was active between 1980 and 1998, and building a power
station on the site was first suggested in a report
commissioned in 1992 by the Istanbul Municipality. (Note:
Waste management in Istanbul was a serious problem in the
early 1990s; then-Mayor Nurettin Sozen commissioned studies
into several related management areas and Prime Minister
Erdogan was responsible for the implementation of many of
these recommendations during his tenure as Istanbul mayor.
End Note.) The landfill was reengineered and rehabilitated
following a waste avalanche and the power station built under
contract for the Istanbul Municipality, which then opened the
tendering process won by Ortadogu in 2007.


6. (SBU) At the Odayeri landfill power plant, the methane gas
formed by the fermentation of domestic waste in the landfill
is vacuumed out and used to produce electricity (Note: In
this regard it differs from European examples such as the
Sysav plant in Sweden, which burns domestic waste and uses
gas emitted during the burning process to produce
electricity. End Note.) A polyurethane pipe is inserted into
the one hundred gas collection wells and acts as a feeder
into the collection station. Seven blowers pull the gas --
which is 50 percent methane -- from the collection wells to
the collection header and further downstream. (Note: Methane
levels in landfill gas can vary widely, from as much as 80
percent to trace quantities. If the methane level falls below
the 40 to 50 percent range its usefulness as a fuel
diminishes and quality of the technology required to use it
must increase; in general, below 30 percent methane the gas
becomes more difficult to use. End Note.) Only about 40
percent of input can be converted into electricity; the other
60 percent breaks down into exhaust, cooling water, and
lubrication oil. If the landfills were near industrialized
areas, it might be possible to sell the steam output, but in
the case of the Odayeri landfill, the residential area nearby
has an existing natural gas infrastructure. For Ortadogu
Enerji, a side project deals with the conversion of this
extra heat into additional energy; in situations with low gas
extraction rates, this heat can be used to power infrared
heaters in local buildings, greenhouses, and artisan studios.

Cash from Trash? Renewables Legislation Could Up Profits
-------------- --------------


7. (SBU) Ortadogu Enerji CEO Gur said that without the
promise of a profit they would not have attempted to get the
project on its feet; although landfill gas projects are
expensive and difficult to self-finance, the large size of
Istanbul's landfills makes profitability possible. Gur told
Poloff that the landfill gas project is already profitable.
The two plants are expected to produce a total of 35 to 40
megawatt hours of electricity each day, which is sold to
TETAS for the municipality's power distribution grid.
Observers have estimated that this is enough energy to
satisfy the needs of 112,000 residences and reduce Istanbul's
carbon emissions by 1.2 million tons.


8. (SBU) Legislation on renewable energy, currently pending
in parliament, will more clearly define the future profit
margins for Ortadogu's endeavor. In its effort to expand
generation capacity and diversify away from natural gas for
electricity generation, the Ministry of Energy has proposed
new legislation that would raise feed-in tariffs for
renewable power generation to a range of EUR 0.07/kWh -
0.25/kWh. According to Gur, landfill gas will fall into the
"biomass" category in the law, and the price currently being
considered is EUR 0.14/kWh. Gur said that Ortadogu's
feasibility studies on the landfills concluded that a EUR
.055/kWh price would result in profit, and the current
selling price for their electricity is EUR 0.06 to 0.08/kWh.
The project is being registered for international carbon
credits to help provide financial support through a carbon
credit trading system, making it more economically
attractive.

Comment
--------------


9. (C) Ortadogu Enerji's monopoly on Istanbul landfill
gas-to-energy projects almost certainly has something to do
with the company leadership's personal ties to Prime Minister
Erdogan, who was mayor during the initial phases of the
landfill conversions. Ortadogu's office walls are covered
with photographs of the company's conservative leaders
together with Erdogan at social and business events, and
local staff suggest that the company's ties to Erdogan date
back to teenage friendships in Istanbul's Kasimpasa district.


10. (U) Landfill gas and biomass represent a relatively small
element in Turkey's overall alternative energy equation. As
Turkey works to meet EU membership criteria, it will
increasingly need to take environmental considerations into
account, and improved energy efficiency is a key to this
strategy. The Odayeri power station, the first of its kind in
Turkey, established the feasibility of installing and
operating such small-scale renewable power systems within the
structure of energy generation and distribution networks.

WIENER