The Recent Court of Appeals’ Decision Dated May 2014 States: No Extra Charge for Power Plants for Using Sea Water as Cooling Water

There has long been discussion regarding the issue of payment by thermal power plants to the Treasury for the usage of sea water in the production of cooling water and fresh water by the power plants located in seaside cities.

This issue was finally clarified and regulated by a recent court decision, which was rendered by the 4th Chamber of Civil Law of the Court of Appeals in May, 2014. Because sea water is also being used as cooling water in many of the seaside power plants in Turkey, this important decision has the potential to affect Turkish power plants.

Based on the court’s decision, we believe that seaside thermal power plants in Turkey do not have to pay consideration for the usage of sea water and that if the thermal power plants do receive a payment request, they may challenge such a request before the administrative courts by relying on this court precedent. Specifically, The 4th Chamber of Civil Law of the Court of Appeals stated in its long-awaited decision dated May 29, 2014, file number 2014/6226 and decision number 2014/8951, that “the Treasury could not request any consideration for usage and consumption of sea water based on the facts that utilization of places that are not possessed and places dedicated for public interest is subject to provisions of special law according to Article 715 of Turkish Civil Code (the “TCC”) and there is no explicit regulation that allows requesting consideration for usage and consumption of sea water in Turkish legislation.” 

Additionally, the process of using sea water as cooling water does not constitute “consumption.” The water replaces itself and, therefore, provides another reason for objecting to any payment request made by the Treasury. The court summarized its decision as follows: “the flow of sea water moves to the chlorination pool by virtue of the pier built within the sea. After being decontaminated in the chlorination pool, it is circulated to a system, called condensers, through two different pipes with the help of a buster pump to absorb heat from the steam. Following this process, the sea water is discharged back to the local source; in other words, to the sea through the same way. Thus, all the sea water used as cooling water returns to sea. And it is unfair to request consideration from power plants working with the aforementioned system for use of sea water without evaluating the fact that the sea water returns to sea.”