India's entry into the 45-nation Nuclear Suppliers Group (NSG) is likely to help the country become a major hub for manufacturing of nuclear components and reactors, as domestic engineering companies are expected to strike global alliances to serve the global nuclear market.
“We have at least a dozen technologically-competent players who can rope in strategic alliances and joint ventures with reactor manufacturers. Eventually, these players can go on to become reactor manufacturers,” said V K Chaturvedi, the chairman and managing director of Nuclear Power Corporation of India (NPCIL).
Already players such as L&T, India’s biggest engineering company and BHEL, the largest power equipment maker, are associated with NPCIL for the erection, procurement and construction of nuclear plants, including the Koodankulam project in Tamil Nadu. However, the government has to first permit participation of private companies in the nuclear energy sector and a decision is expected soon. But state-run companies such as NTPC face no such bar for entering the sector.
“Although India still has a long way to go, but this NSG consensus will definitely produce huge opportunities for both inward and outward trade of technologies,” said a senior analyst from an accounting and consultancy firm.
BHEL and NPCIL already have an equal joint venture for manufacturing nuclear reactors. The JV has been formed to manufacture reactors of 700 MW and 1,000 MW capacities initially with an investment of about Rs 500 crore.
“The new development will help us in a great way. Especially, our JV with NPCIL stands to be benefitted now and we are discussing with NPCIL,” said a senior official of BHEL, country’s largest power equipment manufacturer.
Experts said with the NSG deal, India needs to look at allowing private sector participation for realising its plans of adding 60,000 MW of nuclear power. This will require an investment of over Rs 600,000 crore, since each MW of nuclear power costs about Rs 10 crore.
More From This Section
Already R-Power, NPCIL, JSW, BHEL and L&T have lined up plans worth over Rs 1,00,000 crore for foraying into this sector. Larsen & Toubro is planning to form a Rs 2,000-crore ($463 million) forging venture with NPCIL.
R S Sharma, chairman and managing director of NTPC, the country’s largest power generator, said the deal would help its entry into nuclear power generation. “We have already drawn up plans to enter nuclear power generation by setting up a 2,000 MW project. The deal is a good opportunity for public sector players like us to enter this segment,” he said.
NPCIL said the deal would help its plans of adding 20,000 MW capacity by 2020 and half of it during the 11th Five-Year plan. The deal ensures taking off of the next phase of Koodankulam (3-6 reactors) by adding two 1,000-1,500 MW reactors each, from the current capacity under construction of 1000X2 MW. Two similar-sized new projects may also take off at Kaiga in Karnataka and at Jaithalpur in Maharashtra within the next five years.
At present, India has 17 nuclear power units with a total installed capacity of 4,120 MW in operation, which produced 16,600 million units of power during the last year. About 3,160 MW are under various stages of construction at present at Rawatbhata station in Rajasthan (2X220 MW), Kaiga (220 MW) and at Koodankulam in Tamil Nadu.
NPCIL officials revealed they have already done exploratory meetings and technical discussions with three major reactor suppliers – Areva of France, General Electric and Westinghouse Electric Corporation of the US for supply of reactors for these projects.
“Once the deal goes through, all remaining hurdles including vetting by the US Congress, hopefully before the end of this year, we will start commercial discussion with them for sourcing reactors for these projects,” said an NPCIL official.
Further, the deal will help its existing reactors to increase capacity utilisation (plant load factor) from around 50 per cent currently to about 90 per cent, thus almost double its production capacity.