The power of experience

18 May 2021

Riskonet Turkey has recently started monitoring the performance of an operator of coal-fired power stations in the country. The company’s experience in the energy-generating sector, together with its international reputation, probably played key roles in the client’s decision.

As is the case everywhere, the energy-generating sector is crucially important in Turkey. And of course, the more crucial a sector is, the bigger the repercussions if things go wrong. “It would be no exaggeration to say that life nowadays depends on electrical power,” says Özlem Emgen, Riskonet partner in Turkey. “Without it, we cannot work, be entertained, communicate remotely, and so the list goes on. And, of course, our industries and healthcare systems rely on a continuous supply of electricity.”

Enriched portfolio

Riskonet Turkey has a good portfolio mix of energy-generating clients, assures Emgen. “We currently work with hydro-electric power stations, windfarms, as well as thermal and geothermal plants. Adding another coal-fired power station operator has now further enriched this portfolio. It will enable us to improve on our already-excellent position in identifying all the different types of risks the sector is exposed to, whether they generate power from fossil-fuels or from renewable-energy sources.”

Compliance with international standards

According to Emgen, a coal-fired power station is exposed to more threats and risks than other types of power stations, particularly if it must comply with international standards. These threats and risks include the transportation and delivery of coal, the disposal of waste and, of course, emission levels. For Riskonet, the deliverables of this new venture mainly include monitoring and reporting on the performance of the client’s coal-fired power stations in Turkey and ensuring that they follow international guidelines, legislation and other requirements.

Difficult balancing act

A keyword in the role that Riskonet plays for its clients in the power sector is sustainability, including how this relates to environmental- and social-risk management. Riskonet is helping energy providers perform a difficult balancing act, insists Emgen. The operator of a coal-fired power station can provide a great deal of local employment, for example, but at the same time it can also negatively impact the environment in which it operates. This impact can manifest itself through waste-disposal, landfill issues, emissions, and labour relations, largely through the occupational diseases that could potentially be caused by coal dust.

"The end-product of environmental and social-risk management is the ability to control today’s operations in a way that ensures future generations will enjoy a better standard of life"
Özlem Emgen, Riskonet partner Turkey

Negative impact

Windfarms, on the other hand, rely on renewable energy so they are obviously less polluting. However, they can negatively impact avifauna and generate nuisance complaints from local residents. In the case of a hydro-electric plant, land has to be expropriated for the reservoir and this needs to be managed in terms of land-owners’ rights and even fish stocks. Geothermal wells, meanwhile, can lead to problems with geothermal fluid leakage and toxic elements. Hydrogen sulphide, which smells of rotten eggs, can lead to nuisance conditions, while pentane can pose an explosion threat leading to fire-safety issues and possible business interruption.

Managing threats and risks

This wide variety of threats and risks makes power generating an attractive sector to work in and thus makes Riskonet more dynamic, asserts Emgen. “By monitoring their performance and providing feedback to operators so they can better implement pre-defined measures in their power stations, we can help them manage the threats and risks they are exposed to and maintain good relationships with the communities in which they operate. The end-product of environmental and social-risk management is the ability to control today’s operations in a way that ensures future generations will enjoy a better standard of life. Implementing the right project in the right place, with the right risk management, will help to achieve sustainability goals.”

Meeting targets

That sustainability also extends to finance, says Emgen. “In any project, we always advise a client to improve its chances of obtaining financing by being as green as possible with respect to the environment and to all stakeholders, including employees and their working conditions. When it comes to the latter, for example, happy employees lead to more efficient power plants. And this, in turn, helps employers meet their targets.”

Feedback and reporting

Getting back to the new client, Emgen explains that Riskonet has made an evaluation of each individual power station, documenting what functions well, where there is room for improvement, and what are the problem areas. “Doing proper due diligence with an expert team is a crucial step in our methodology,” she insists. “Legislation, international guidelines and requirements, as well as sustainable targets are all key factors in an environmental and social due-diligence report and action plan agreed by the energy provider and all parties involved in project finance.”

Complete package

In this case, Riskonet is not instructing on the client’s implementation of commitments, guidelines and targets, she clarifies. “We are keeping track on where and how the client might not be fully complying with them and providing feedback in the form of regular reports to ensure that compliance. Our portfolio also offers a variety of services, right up to the complete package. This can include the evaluation, a due-diligence report and action plan, performance monitoring and reporting.”

Winning the client’s trust

Reflecting on the successful acquisition and start of this new venture, Emgen concludes: “I am convinced that Riskonet’s risk-management experience in the energy-generating sector, complemented by excellent communication skills, played key roles in winning this client’s trust.”

 

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Local offices

AMSTERDAM

Ron de Bruijn

Amsterdam
The Netherlands
+31 85 043 79 40
[email protected]

ISTANBUL

Özlem Emgen

İstanbul
Türkiye
+90 533 21 12 051
[email protected]

KRAKOW

Leszek Golachowski

Kraków
Poland
+48 663 336 844
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JOHANNESBURG

Chris Brits

Johannesburg
South Africa
+27 83 456 7424
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