Energy Talks 1 - Dr. Kubilay Kavak
With our Energy Talks series, we aim to bring together the experiences of experts operating in different fields of the energy sector.
In our first episode, our guest is TSKB Escarus CEO Dr. Kubilay Kavak. We talked to Mr. Kavak about his latest activities at Escarus, the methods he used in his daily work, and the skills needed to work in the field of energy and climate in the future.
Gökberk Bilgin: Dear Guests, welcome. In the first part of our Energy Talks series, we will host Doctor Kubilay Kavak. He works as the general manager at Escarus Sustainability Consulting, a subsidiary of TSKB. Sir, since you are also a former Bilkent student, I would like to welcome you to your home.
Dr. Kubilay Kavak: Thank you.
GB: Even if it is in a virtual environment, we can hold this meeting. First of all, sir, we can start our meeting by starting with the work you have done. To make an efficient program in which you will share your experiences with the taste of an hour of conversation; while we are talking about the current issues, on the one hand, we are also starting our series to discuss the things that can be done about the future on the other hand. Sir, the floor is yours.
KK: Thank you. I greet the esteemed listeners with respect and love. Escarus, with its brand name, officially named Türkiye Sınai Kalkınma Bankası Sürdürülebilirlik Danısmanlık AS is an organization that focuses entirely on sustainability and carries out consultancy activities in sustainability-oriented projects. Of course, what is sustainability, which topics fall under sustainability, and which ones are out of scope is a subject that has been discussed for a long time, but a global alliance has been achieved to a large extent; at least there is an agreement on what sustainability is. As stated in the famous Brandt report, we call sustainability in general terms, the responsibility and sensitivity of using today's resources without wasting the needs of future generations, taking those needs into account.
As you know, the dictionary meaning of sustainability is “the ability to be permanent”, that is, the responsibility to carry the concerns about the future that you have just pointed out in your opening speech, today. I always say this aphorism in personal conversations like this: Those who talk about the past incessantly are the ones who have nothing left to say about the future at the end of the day. Constantly talking about the past is also a sign of aging. So today I want to talk about the future a little bit. Sustainability is a concept that includes the present but more future in its essence. As Escarus, we consider sustainability in three main branches: Strategic Sustainability, Operational Sustainability, and it is an activity such as education, research, and reporting that aim to transfer the experience and knowledge gathered from these two to wider segments. If you ask about the difference between strategic and operational, the operation and effort of processing sustainability into the genetic codes of all businesses, in a broader perspective, can be considered strategic sustainability. In this direction, let me give an example through a company. It is not a matter of a sustainability unit or a communications unit established in a company. When it is, it means that the subject has not been internalized because when I say sustainability, it all comes down to money; finance is involved. If we are talking about a facility, there is a lot of work to be done there; strategy departments, production departments, quality, maintenance… When considered within the holding structures, departments are related to organizational structuring. If we think in the world of finance, credit allocation units, credit control units… In other words, it is not just a matter of groups or units of just a few people, but rather an issue that everyone, both in businesses and in society, should be interested in and should take care of. That's why we take this as a basis when carrying out strategic activities. On the operational side, we manage projects that are a little more specialized, tangible, delivered to the address, and more point-focused, such as energy efficiency, sometimes resource efficiency, and sensitive waste management.
KK: We try to convey the experiences we have gained in the field, in the financial world, and in businesses, as well as the knowledge we have gained from different sectors, sometimes through training and sometimes through reports. These are the spheres of activity of Escarus in general.
GB: Thank you so much, sir. Dr. Kubilay Kavak is also my undergraduate professor. I had the opportunity to take energy economy lessons from him. So, how did your relationship with energy begin? Did your interest begin at university or did it develop later?
KK: Regarding energy at university (let's talk about university courses on this occasion), I am a Bilkent University Industrial Engineering graduate. In the years we were studying, there was a curriculum that gave priority to basic science courses, although it was a slightly lighter program now. We also learned lessons from thermodynamics to statics, from materials science to circuit theory, which industrial engineers will not use much in their professional life. But in the context of the development of the basic engineered lotion, each of them has of course made many contributions that I did not or could not recognize. During my student life, my only knowledge of energy was circuit theory. We learned and solved Kirchhoff's equations; I have not used any of them in my professional life.
I worked in the private sector for a while, then in the prime minister, and finally when I entered the State Planning Organization (DPT), we were told to choose a unit and as an industrial engineer, I wanted an industry department and then a science - technology department. Although everyone's first choice did not come true, their second choice did. They gave me to the energy sector in the infrastructure services department. I was very upset, I mean, everyone's first two, third preferences were accepted, because mine did not. On one occasion, when I visited the undersecretary of the period (I remember him fondly) to reproach him, he understood my situation and gave me a long speech. It was 2001, I will never forget, what he said: "Now, I know you wanted other departments, but I'm assigning you to the energy department, don't think that you can't do this job because you're not an electrical engineer, energy is one of the most talked-about sectors of the future. He told me that he very much wanted me to develop my professional experience here. He said you may be angry with me now, but you will understand later. It has been 20 years since that day, and I am a friend of yours who deals with energy issues sometimes very deeply, sometimes a little more superficially. Glad he made that choice. You may remember Mr. Bilgin, I always used to say in classes: “energy is a 6-letter word, I always felt myself stuck in “e”. Whenever I thought that I learned something in a new field, I said that I have moved to "n", I saw that brand new subjects came into our lives and the more I learned, the more I stayed at "e". Believe me, I do not say this out of humility, because energy is a really deep subject. It is a very difficult task to grasp and contain the whole. But it is an area where striving will never deprive you of joy. That's why I recommend young professionals to show interest in the energy sector. It seems that we will talk a lot about energy for the next 20 years.
GB: Exactly, sir. In the studies at our center, sometimes people from other organizations make requests for our opinion and consultation. When they ask a question, we say you send it in advance because we may not be very likely to know it. We answer that we can at least do a preliminary study and help you that way because even in two or three months, very rapid transformations and developments can occur. If you recall, six months ago at COP-26, in a very stagnant atmosphere, almost every state made commitments.
GB: They declared that they would take important steps regarding the climate. With the Russia-Ukraine crisis that followed, there were sudden changes in the world, especially the crisis in natural gas and electricity prices before that. Looking at the last twenty years, how do you evaluate the sustainability work so far with your twenty years of experience? On the other hand, I am also curious about your thoughts on the effects of the Russia-Ukraine war. What everyone is saying is that states are not taking very realistic steps on climate targets. On the other hand, there are very serious criticisms and activists are constantly protesting. What do you observe when you examine the events from the perspective of twenty years?
KK: Let me explain it like this. The glass has a half-full and an empty side. It depends on the perspective from which we interpret the issue. Opinions are subjective. What you see has a lot to do with how you look. Now, I'm not one of the pessimists. Because of this, twenty-odd years ago, the situation in Turkey and the world was as follows: Sustainability, as a stand-alone topic, was not a concern, especially in the design and implementation of energy policies. When we look at the last twenty years, there has been a very serious sensitivity and awareness on this issue both in Turkey and in the vast majority of the world. So there are compelling factors. Let me quote you again as such an anecdote. It was 2001, Turkey's technology predictions were being made by Tübitak, and my friend and I attended the energy sector panel for a long time. It was the beginning of my professional life in the field of energy. All state institutions were coming, all critical institutions, including the military.
What kind of an energy roadmap should we have in terms of technology? For example, I remember the academics who advocated wind and solar energy that day. Some of them were deceased. They were the object of derision back then. At this point, we have reached almost 8000-9000 MW in solar energy. We have exceeded 10000 MWs in wind energy. Hydraulic energy has created a very serious capacity. The issue of turning this into production is an ancient topic of discussion, it is always said. There is no direct relationship between its capacity and production, it is true. However, when I look at the twenty-year performance, we see that there are very important changes. Production costs, which seemed like a dream at that time, fell at an unbelievably unexpected rate, especially in solar energy, and I see that Turkey is on the verge of a major renewal and a major change in this sense. Very important regulations are being made. Of course, from time to time, there are shortcomings. Here, sometimes the regulations may contain things that will deter investors. When we look at the issue over 20 years, we see that the direction is greener production, greener consumption, and a more sensitive and responsible approach.
This is the glass half full. The downside is this, as you may remember from my lectures, Mr. Bilgin, transformations in these energy works do not happen in such a short time. In other words, if we consider the date when humanity started to use coal in an industrial sense as the 1760s and 1765s, with the invention of the steam engine, the dominating effect of coal once lasted until the Second World War. In the early 1900s, the share of coal in the world's primary energy consumption is still very low, those conventional fuels were still used. The reason for this was that the technology and transformation speed of that day was slower than today, and the opportunities were fewer.
KK: Then oil entered our lives and with the oil crises, natural gas in 1973 and 1979 became stronger as a new energy source. Now, when we look at the periods, we see that the share of new sources in the electricity basket and energy basket increases in a shorter time. However, this period is short when we look at it in 150-200 years. For example, there is a target to switch to electric vehicles. Comprehensive transformation moves will be required, charging infrastructures will be required, and electrical loads will need to be managed with very smart systems. These are all big costs. Now, it is always the subject of discussion in a thermal power plant, you know, exit from coal, gradual and immediate exit. I'll tie it to climate goals. There are difficulties, imagine that you are an investor and the government said to you, "We are liberalizing the market, come and invest. Take advantage of the prices in the free market, earn money and serve the country.” The investor also took responsibility and signed agreements with banks. Investment has been made and the power plant has been built.
Let's say a power plant was established in 2010. Now, when this investor is informed that the factory will be closed as a result of the implementation of climate policies, two critical points emerge. The first point, now when designing a power plant, its feasibility is done for 30 years and this is the minimum calculation. I have not seen any power plant expire in 30 years, they generally operate for 70-80 years. While this investor is signing contracts with banks, employing so many people, while making coal purchase agreements and electricity sales agreements, calculations are made with such maturity. Otherwise, investors can deposit their money in the bank, an easier option. Now, when the investors are informed that the power plant is disabled, there are 2 toxic effects. First, will another investor come and invest in wind or solar energy this time because of this decision? Today, thermal power plants are closed, and the possibility that a similar situation may occur in solar panels tomorrow may come to mind. There is such risk. Secondly, if you have already created something, the matter will be sued. In case of a lawsuit, you may have to pay the income from electricity generation during the remaining theoretical life. There is also such a financial risk. Therefore, the transformation is not easy for all of Turkey, Europe, China, or India.
When talking about climate targets, there are criticisms that they are not realistic, not aggressive enough, and they are partially right, but this aspect of the issue should not be ignored. Now, I always say about India, coal production is around 70%, as far as I know, of energy supply. They gave a date as 2070. India is such a country that it represents an advanced stage in the fact that people consume coal there, we must understand this. Of course, we forgot these misery tables since we do not have a village without electricity. Turkey completed 99% of its electrification, in 1997-1998, with its shortcomings and gaps. Now there are hundreds of millions of people without access to electricity, without access to modern energy sources. Now they have stages to complete. On the other hand, we look at the power plants that were closed in Europe, they have already completed their theoretical life. Therefore, when they say that they are leaving, they have the means to compensate for the loads that may occur. After the Russia-Ukraine war, Mr. Gökberk always told me: "The weather was very good at the COP, look, now the European Union has added nuclear to its taxonomy, with the force of France. Natural gas was defined as a clean fuel. Weren’t we going green?” There is no such world now, if only that was possible. We could do it tomorrow under today's conditions. If we produce electricity from renewable sources all over the world and also in Turkey, it would be great if coal and natural gas, which are not polluting at all, are used in the industry, but today it is a dream, It is neither possible nor realistic to do this from today to tomorrow.
KK: I always ask those who say this. Please lift your head and take a look at the room you are in. How many items or objects catch your eye? How much of this is about steel and how much is about plastic? If we can get these two out of our lives, okay, we don't need coal in our lives. Can we remove these? In other words, steel and plastic have entered our lives a lot, from the joinery, hinges, and handles of the door to the front cover of the television. We are very accustomed to the comfort of modern life. Therefore, we will either make concessions on this, but it is very difficult for people to compromise the welfare and comfort standard they see and these happen with extraordinary events, or we will make this transition gradually. Therefore, I do not think that climate targets are targets that can be underestimated in this sense. Germany is thinking of reopening coal power plants after the Russia-Ukraine issue, or discussing the industry among themselves, should we switch to coal boilers again or what to do. These discussions happen. In this sense, I advise everyone to remain calm and restrained because when it comes to energy, it would be misleading to look at issues in terms of three months, six months, or one year, and it is the same with oil.
We have a rough logic, you remember, oil isn’t priced under fifty dollars, and it doesn't go over a hundred dollars. This is our rule of thumb assumption. Of course, we do not make rough guesses about it, there is a ratio for it. It can happen from time to time, it does. When you look at periods of twenty, or thirty years, you will see that those ups and downs are outside the norms in the normal distribution curve. When this crisis eases and peace is achieved after a while, prices will regress to the required band. Coal prices and natural gas prices will also decline. Remember that these are temporary. Now, as you know, one of the energy-intensive industries in Portugal is ceramics. Seven or eight factories stopped production. They are discussing heatedly in Europe, how it will turn out. The head of the Bank of England made a statement, he said that oil prices will be higher than what we saw in the 1970s during those shocks. It's true, it could be. But remember, these kinds of shocks bring new balances. Therefore, think about the 1973-1979 oil crisis, when the International Petroleum Agency came on the scene, natural gas came into the force as a resource. Prices were, between the years 1983 and 1995, six and twelve dollars if I am not mistaken. Such an upper and lower limit has been set; a new equilibrium has been established. For a very long time, that balance continued.
Now, when this Ukraine-Russia war calms down a bit, prices will also calm down when we move on to low-intensity conflict, even if there is no absolute peace. Such six-month, one-year fluctuations, of course, even if we ponder and project, should not deter us from broad, long-range flows. To sum up, when I look at this practice of almost twenty years, I see that the direction is always towards the greener. It is the same in Turkey and the world. This is the case more than anyone else in Europe, where we have a very strong commercial relationship. This will have repercussions for us.
GB: Let me ask you this as well, sir. Where do you place Turkey on this matter, and how are our policies stated? Before moving on with other matters, I wanted to get an idea about this from you as well.
KK: Of course, when we talk about energy policies, Gökberk, we are talking about a very wide area. Again, you remember, I have a motto, and I say it mixed with humor. Energy is a whole, indivisible, I say. Because when you say energy, there is oil, natural gas, imported and domestic coal and it does not end with them. We also have renewable resources, the energy topic which cuts horizontally on all issues such as energy efficiency, is very important and is an issue at the heart of sustainability. There is also a financial pillar to carry out all of these. Financial institutions will provide financing so that they have new investments. Of course, there are also consumer preferences. Now, these consumer preferences can be translated as decision-making mechanisms. You didn't care much about the "public policy-making process", it has now changed. Why has it changed? It changed for two reasons. First, investors diversified. So thirty years ago, the only place you could find money to invest was from banks. If you didn't have the resources, they gave you a loan if you are suitable and you would make the investment. Now we're going in a different direction than that.
Companies can issue bonds, open to the stock market, and obtain funds from domestic investors. And these investors borrowing their money, let me put it simply, lending investors are now taking a somewhat preferential approach. This is the driving factor that we should focus on first. The second is the demand side. What is that? I always say that when we went to the market, we didn't need it twenty years ago anyway, if we needed milk, we bought it. We would take whichever milk we found was closest to us. Now, for example, when I go to the market with my daughter, she reads the labels of each product one by one, looks at the contents, whether there are stamps on this production, does it has this in its compound, etc. In other words, the sensitivity we show in both textile products and food products, the sensitivity that the new generation shows with high awareness, will be the subject of energy use. The state has prepared the infrastructure accordingly, you know, renewable energy can be used by paying a little more. The market for it has been created, pairings were made in TEİAŞ (Turkish Electricity Transmission Company) and they are still being made. The volume is not very big yet, but today's crisis or shock is not a topic to talk about much because of the shock in energy commodities. Everyone is worried about how to pay their electricity and natural gas bills, but please remember, these are transitional periods. After the transition, periods are over and stable balances are established, such options are discussed more.
So there are two major driving forces. The first is investors, they can take a role in investment decisions with the small or big decisions they make. The second is the consumers who consume the produced service or product. There is tremendous awareness on both sides. When these are supported by public policy processes, they will automatically bring about the transformation. That's why I see this as very important. It is necessary to be realistic in anyone's household today that sustainability is kept on the agenda with this aspect in this way, in an environment where electricity prices are so high, someone may not say that he will use greener but more expensive electricity. Remember, 15-20 years ago, nobody said that they would buy more expensive but organic products. What happened next? Mothers grew the organic market because of their enthusiasm for a higher standard of nutrition, especially for children up to two years old. Energy is on its way to being like that.
GB: Thank you, sir. Of course, when it comes to awareness, we see that one of the most important issues in education. I mean, we have zero carbon targets in 2053 in our country, and to reach those targets, we need to make some improvements and innovations in our education system. With the digital transformation and the introduction of more technology into our lives, we see that the education systems so far have started to become inadequate. Most of the sensations that come to us from the private sector are frequently informed that the students leaving the university are not at the desired levels.
When you consider the issue from this site, you, as the general manager of a consultancy firm, think about how we shape education policies, and do you agree with this view?
That is, about whether the people who graduated from the university are at a sufficient level? If you have such a view, at what levels can improvements be made?
KK: Of course, Mr. Bilgin. Education policies are not my area of expertise. Inevitably, like every Turk, we understand a little bit of football and a little bit of education. Let me express my non-expert opinion in that context. Now we do interviews from time to time. Especially when it reaches a certain stage, especially when it reaches a certain stage, I agree with the interviews so that I can understand how young people see the universe, the world, and Turkey. Are we alienating too much? In this sense, I agree. We also choose our colleagues very meticulously. They are all like that, but they are friends who both have this good training and meet the criteria you are looking for, which I will mention shortly. First of all, we attach great importance to the fact that saying "I am the biggest" is an obstacle to development. In my new generation, the young people in Turkey say that have become a part of it, perhaps because our education policies are somewhat influenced by the American education system.
Now there's a book that was translated in the late 1980s, by a writer called Herbert Schiller. It is a bad translation, but it's called Mind-Winners. He talks about something there and says there was no today's internet. There will come a day when people's minds will be turned into a sieve. In other words, there will be such an information bombardment that people's discrimination abilities will be paralyzed at the end of that bombardment. It's like a prophecy, a prediction, that's what's happening today. I live with my children, and I also discuss with them from time to time. It usually says something, "it is" or "it is not", we are discussing. When I ask where did you learn this, they say "Google". And I say "remember that 95 out of 100 of the information you learn on Google is garbage because everyone writes something”. This means that “I am done”. That's why it became very easy to access information and because it became very easy, young people started to think that “they are done” after the moment they read three or four sources. That's how I saw the biggest risk in America when I was doing a master's degree. This is very inconvenient, something that needs attention.
Knowledge or, more accurately, information; can be learned by reading and accessing several sources, but to synthesize all this information in a meaningful way, to bring it to consistency, to place it in a casting mold, people need to go through certain training. This may be a specialized establishment; studies such as academic, master's, doctorate; working in an institution by constantly busy with the same subject. These are all stages of the growing process. But when they are all put together, a real expert emerges whether it's sustainability, climate, energy, or agriculture. No matter what the subject is, no one should rush, humans are something that grows hard. We call this a notion, in other words, human information load or database may be very rich, but a certain experience is required to process it and turn it into refined information. We pay great attention to this when we take them to Escarus, and after we take them, all of our friends say that we should not stop. The minimum requirement for progress is to ask questions, to be able to ask good questions rather than good answers, you know, the prerequisite of intellectuality. We are making such an effort. Now, if we turn to the education policy, this is a very important barrier that must be broken. I see a barrier here. A very confident youth is coming, I like this self-confidence very much. But if that confidence is not equipped with meaningful competencies, it is not reinforced, it will spread to both politics and social life like a contagious disease after a while. God forbid, it is not necessary to say "I am", it is necessary to say "I will be". If you are asking in terms of energy, a curriculum or approach should be developed that will center on the "Energy is a whole, indivisible" approach that I just said there. It is this; we always have, I see friends from the public sector among the audience, some valuable listeners are more competent than me. Now, if a person is engaged in the transmission of electricity, he may know it tremendously, he may go deep there, but he is only part of the chain.
As I said before, it has a resource side; coal, natural gas, etc. are extracted, processed, transported, transformed in power plants or refineries, then again transported, transmitted… All of these are intermediate stages of a great system. And of course, there is the financial side of the business, and in recent years, there is also the environmental and social dimensions of the business. Now it should be something like that, of course, expertise in certain areas is very important, but it is necessary to have a little perspective from each of them. I know transmission lines very well. You might say "a high voltage is a subject that I know the most". This is an incredibly valuable thing. But if you just stay there, that's the whole picture, as I just said, the evil eye-landscape relationship is a narrow eye, it prevents you from seeing the view well. I think it's like a philosophical discourse, I know I am boring you. If a skeleton is to be created, it must be built on this spine. This is basically what I'm talking about.
GB: Sir, what we are trying to do is related to these issues. In the work we do with our interns, we also read academic articles from many different fields because, as you mentioned at the beginning of your talk, there is so much we don't know even after we understand the "E" in "Energy" that as soon as we understand it, a new technological development happens and everything we know can become completely invalid. I think I heard it in a speech by Bill Gates if I remember correctly; he is constantly reading and after a while, filters begin to form in his mind and he begins to mentally understand what and which information can be used correctly, which information can be useful or useless, and this is something that can occur over time. He mentions that we can reach that stage when we read a lot and do a lot of research when we take part in the events when we deal with different sides and different dimensions of the business.
Now you talked about the energy sector, finance, you talked about the environment, you talked about socio-economic events; a group that wants to develop a policy regarding these should at least be aware of all kinds of concepts, it should be following the latest developments there, that is, we are talking about a very wide area. You have a long career and so far you have covered topics from different fields. How are things going in your daily life, what do you pay attention to, and what do you follow? Let's continue from here, I believe that it will be very useful for our young friends in terms of information transfer.
KK: Mr. Bilgin, let me protest you first and then answer your question. When you say such a long career, you implicitly say old, thank you, but it's still beautiful. Aging is also meaningful, it adds value to life. Now once again, it is very related to your previous question about education policy; I attach great importance to being multidisciplinary. Personally, on a company basis, and in general with the stakeholders we come into contact with. Now I've heard it a lot, and you've heard it too: people often say, "I'm a social scientist, am I going to do a statistical analysis?" There is no such world. Statistics is not something that only scientists or engineers should be busy with.
If you want to read meaningfully if you want to make policy designs meaningful, you should know impact analysis, you should understand a little bit of finance, at least enough to do a simple analysis, and you should understand statistics. Whatever your expertise is, it also requires being multidisciplinary. When it comes to energy, for example, the Russia-Ukraine War reminded us once again that you cannot analyze without considering the dimensions of diplomacy, international relations, and economic wars. If you cannot meet this requirement, all oil forecasts may turn out to be wrong. So the more disciplines you work with, the wider your nutritional resources, and the closer you will get to the truth. Now, sustainability, which we talked about a little bit earlier, is a very broad topic. When we say sustainability, the circular economy is involved, and strong waste management is involved. Of course, sustainable finance options, green finance, come to the fore in the sense of financing this sustainability.
So does it end here? No. Energy efficiency, water efficiency, material efficiency, and optimization of the supply chain in terms of effective management of resources, of them, completely fall under sustainability, some of them intersect. It is not limited to these, on the other hand, it is exposed to external influences. For example, something called the European Green Agreement is on our agenda. We've been talking a lot for a year. We call it the “Green Contract”. Europe has committed to an important transformation, and with it, a corpus has been formed. When we look at that corpus, the subject is not the technical issues I have talked about, but one after another, countries are enacting laws for the 'Duty of Care. Let's say an energy company has caused irreparable damage to the surrounding area while extracting oil or gas or transporting them, in any place, then it has to compensate for the damage. You know. I will not name the company, but lawsuits are being filed. Therefore, when we talk about sustainability, there is also a social dimension. That is, you will not employ child labor, if there is resettlement you will preserve the rights of the people you are resettling.
Also, of course, there are all dimensions related to the environment. In other words, all topics that we can think of such as recycling, waste management, minimizing energy emissions, or chemical or wastewater discharges are under sustainability. It is not possible to keep up with everything in a title that is so rich now, which directly concerns many sectors and fields. Therefore, we want to focus on at least some areas and deepen in those areas, but we do not want to neglect other areas.
Fortunately, with the pandemic, Turkey quickly adapted to digital communication. I am very happy with it. In the past, if you reserved a day for just one conference to listen to a conference, for example in Istanbul conditions, you could only listen to two at most because it takes place in different locations. Now you can do your job, you can easily access these open sources of information during breaks, and you can extend the productive time from eight hours to ten hours. In the extended time frame, you do not lose anything from the time you devote to work. You do not lose much in the time you devote to your family. In this sense, access to information and resources has become much easier. We are trying to benefit from all sides as efficiently as possible. This is our learning method, but for example, we have a coordination meeting for 3 hours every Monday and we talk about projects and new areas. From time to time, if there are new topics, our colleagues working on that subject make presentations. So essentially, one person benefits from twenty others. Thus, we are trying to both increase efficiency and be multidisciplinary. This is our approach, Mr.Bilgin. I guess that's a bit of a long answer.
GB: Sir, it is very useful for us. We are currently working on what kind of education strategy should be followed for Turkey to achieve its climate goals. Therefore, it is very important to get feedback from you, valuable experts, and to have a chance to listen to your ideas. By the way, participants can also ask their questions over the chat. I saw a question there, sir. Let me share it with you. (45.00) Mr. Muzaffer Başaran asked. "The Electricity Generation Company (EÜAŞ ) has included FGD for Afşin Elbistan A Power Plant in its investment program for years, and the State Planning Organization (DPT) did not approve this more than once. In your opinion, was this decision of the DPT correct?” he asks. What does FGD mean here, sir?
KK: FGD means Flue Gas Desulfurization. So, it means flue gas treatment plant. Now, of course, Mr. Muzaffer is a very important elder of mine. He is one of the doyens in his industry. I notice you're asking with slight sarcasm. That decision was correct, Muzaffer Bey. What we said that day, we say the same thing today. The decision of that day was essentially a decision about sustainability. Now, in the meetings we went to in the parliament, EÜAŞ, various kits (State-owned enterprises) from time to time both in the lower and in the upper commissions, the deputies were asking "Are you an enemy of the environment?" due to misinformation. Under the conditions of that day, Afşin Elbistan A Power Plant had to either be closed or flue gas purification systems had to be installed after it had been rehabilitated from end to end and its electro filters had been improved.
At this point, it should be said that when we mention sustainability, we need to clarify one thing. Now we call renewable energy very clean energy and it is so. However, there are such hydroelectric power plant projects that destroy the fauna and flora in their environment. All of us have seen what kind of natural destruction was done in some parts of the country, especially in mini hydroelectric power plants. So just because something is green doesn't necessarily mean it's sustainable. As we emphasized at the beginning of the talk, there are three dimensions. We need to consider the environmental, social, and economic dimensions. If you build a flue gas plant of hundreds of millions of dollars without a performance guarantee for a power plant that has reached that degree of wear for 30 years in terms of operating conditions of a 15-20 years old power plant, you will not be able to operate the plant in harmony and you will be wasting that much money. We were saying the same thing that day. I still say the same thing today. Initially, the power plants should be brought to a level that can operate at optimal combustion efficiency. After that, suitable flue gas installations should be installed. If it cannot be done so and it is wanted that the local people will not be harmed due to the emissions that will occur at that time, the production may be suspended. Nevertheless, this decision would have a political cost. Policymakers also did not want to bear that political cost because there are hundreds of workers working there and there is a social situation there. There are also political dimensions of the subject, which I do not want to go into. Muzaffer Bey knows these subjects very well. I know you're asking with irony. I send my greetings to him as well.
GB: Thank you very much, sir. Yiğit Afşar Bey has a question. He asked, "What do you think about the processes of hydrogen transmission, storage, and mixing with natural gas?" If you're going to talk about these new technologies, let me ask you: There are serious investments in nuclear energy, such as making them safer, and building nuclear power plants with small reactors. Can you answer both together?
KK: Of course. Here in the audience are nuclear engineers. Maybe it would be too much for me to speak in front of them. However, I can say something about hydrogen and nuclear power. Let's start with hydrogen first. When Nejat Veziroğlu came to Turkey in the early 2000s and talked about hydrogen, the energy professionals of that day were very excited. But sometimes, conditions have to mature for technologies to diffuse, as I just said and explained via the coal example. Conditions did not mature in 20 years because technologies did not reach the cost maturity to compete with conventional technologies. Now, by this green deal, both carbon pricing, that is, carbon pricing at the border and rising carbon prices (50.00) in the emissions trading system, and the clear orientation in this sense have made hydrogen an important technology option. However, we still have two problems. The quality of the technology we will use to produce the hydrogen. If we are going to cause the same amount of emissions, there is no reason for switching from coal to natural gas, and from natural gas to hydrogen. Therefore, among the hydrogen options, I say from a green perspective, there should be green hydrogen. It is also a more expensive option than others. Now maybe you've heard: I heard it from a French official last week. So I asked the nuclear question about hydrogen; s/he says pink hydrogen. Namely, the hydrogen produced by using nuclear electricity is called pink hydrogen. I just heard about it too. We knew green, blue, gray, and pink ones came out. It's a bit more debatable, but when we come to modular nuclear power plants or nuclear units, I think modular plants will become more common rather than large, centralized, established 5000 mW plants where the waste management is much more difficult because the new trend is something that may require a little more dynamic layout. If demand-side management is to be done, I foresee that such trends will be discussed more; then modular power plants, modular nuclear reactors, and units will become more acceptable options. That's my guess.
GB: To link up, shortly, even though it is not said to be green energy, it is included in the bill by the EU. There is a question about that issue by Ms. Fatma.
KK: There was a lot of discussion in the climate council. There were greenhouse gas reduction, energy, transportation, and industry commissions both before and during the meeting. It was discussed a lot there. It's a matter of being defined in the taxonomy. To be honest, there has been some disappointment in environmental groups, those who believe in sustainability wholeheartedly. Now if you look at it from the emission point of view, nuclear is a clean option, but cleaning isn't just about emissions. It is also a matter of minimizing other possible risks. As you know, waste management is a very important topic and an important problem from time to time. Therefore, a significant number of environmental groups do not consider nuclear a very clean option. Its introduction has already generated a reaction. The definition of natural gas as a green option met with the following objection. At the end of the day, when you use natural gas instead of coal, it halves this emission in a boiler in electricity generation or any combustion process but does not reset it, so it is not 100% clean. Here, perspectives of gradual transition or radical transformation collide. It seems that natural gas is a transitional fuel, so I don't see any harm in buying it that way and I consider it a more realistic approach. However, there is another dimension to the issue, banks have made statements one after the other. Now, whatever you take into taxonomy, I will not name them, some international development finance institutions said that although taxonomy is like this, we maintain our position on not making fossil fuel finance. There is not a single Europe, not a single America, and not a single financial world. Therefore, it was a bit of a disappointment, but at least in terms of finance, I don't see a negative change in attitude compared to 3 or 6 months ago.
GB: Thank you, sir. There are some developments in this waste management as well, I am following it on the one hand. It seems that there are some technological developments in the direction of reusing waste as fuel. Investments in nuclear draw my attention. If there is a technology that can solve all the problems we currently accept, it can be an extra alternative to renewable energy sources. In fact, nuclear's involvement may accelerate the R&D studies of renewable energy investments and may enable us to reach much more efficient technologies in a shorter time. I am also hopeful that competition can have a positive effect, but we will see it in time.
KK: It's a matter of cost Mr. Bilgin, the first title is a matter of double diffusions. These industries are very large, especially the oil industry, even if the cost is cheap. here are multi-billion-dollar investments, and it may not always be easy for new technologies to diffuse before they pay for themselves. It is a thorny and painful road. Also, Mr. İlker asked something about the green contract. If you allow me, I will answer him in the remaining time. Now, it is a very good question to show how prepared and conscious the producers in Turkey are of the possible burdens of the green contract. I thank him. We conducted a study for DEİK, and we conducted a survey study on them in March last year. The situation was very dire in the answers that day, so we realized that we were not familiar with the subject at all, especially SMEs. But since then, there has been a very rapid information bombardment. Chambers of industry, chambers of commerce, non-governmental organizations, and business world organizations have embraced this issue very much. The state has announced a green agreement action plan, It was an extremely important step. There is an orientation towards an important issue in public institutions. Therefore, with so much information, I think that our producers are at least mentally more prepared compared to a year ago. However, the biggest dilemma here is that whenever we talk to an industrialist, he only takes it in the context of border carbon regulation. However, there is a corpus, there are eight titles. Each of these will affect the lives of those exporters. It's not just about the costs, let's just call it penalties from emissions, things to be brought to the non-free allocation of carbon emissions. It has a lot of dimensions. Product footprints, agricultural activities, and transportation will all touch our lives. We're a little bit down there from him. But it also has time, I think over time, I think we will see a business world that is more aware of both the additional costs of risks and the doors and opportunities to be opened.
GB: Sir, you have one last question. Let's take that as the last question if you wish. It is Mrs. Selma's question. She asked, "Which one of the green and sustainability requirements do you think will be the dominant right in green agreement harmonization legislation sanctions, considering the concept of competing rights in law?"
KK: Thank you very much, dear Selma. Something maybe green but not sustainable if you do not calculate its economic dimension well. Why? I just gave an example. Hydroelectric power plants are theoretically green because they have no emissions. But for example, you may have to close it when you do not make good accounts. There are examples of this in Turkey. Since water revenues were not calculated well and the basin analysis was not done well, some facilities produced much lower than anticipated. Now, if the owners of such facilities are unable to pay their loans, they may have to dispose of them after a while or they may have to stop production. However, the most important factor that distinguishes sustainability from the purely ecological approach is projects, approaches, businesses, and facilities that are as green as possible but at the same time sustain their lives. Sustainability is like that. I gave the example of iron, steel, and plastic. These will be in our lives. We will not say that these should be removed from our lives, but we will say that we should make them as green as possible in their production processes and consumption stages. That's why we are among those who think that sustainability will come to the fore as a broader umbrella concept that includes green in the long run. Of course, no one is wrong about this. If we have a lifetime, in the next 20 years, we will evaluate together whether our current estimates are correct or not.
GB: Mr. Kavak, thank you very much for your valuable participation. It was a very pleasant conversation. We also learned a lot. We had agreed on one hour, and it was exactly one hour. We would like to thank our esteemed guests for their participation. Our activities will continue in the coming days. If you have feedback that will enable us to do our job better, you can always reach us from our social media accounts or our e-mail address. Thank you very much for your precious time, we wish everyone a good evening.