A suitable financing model is needed to cut the high cost of light water reactors (LWRs), a report by professional service firm Deloitte said on Thursday.
The report, “Nuclear power in India — A way forward”, was released by Atomic Energy Commission chairman R K Sinha at the Indian Nuclear Energy Summit on Thursday. The report noted that imported LWRs would play a key role in India's nuclear capacity addition in the future.
However, due to the high capital costs of LWRs and the high interest rate regime in the country, the resulting tariff would be high and it would not be competitive with rupee financing from domestic institutions. The nuclear power with low fuel cost escalation would be competitive to meet the energy requirements of the country, provided a suitable financing mechanism was put in place. Deloitte, however, said if the LWRs were funded with longer duration and cheaper debt, then the tariff would become comparable to pressurised heavy water reactors and would be able to compete with fossil fuels.
“The Nuclear Power Corporation is correctly following a strategy of a combination of indigenous PHWRs and imported LWRs. Given the price sensitivity of the electricity market in India, it is important to get the right finance for LWRs - both tenure and rate - to get a competitive tariff,” Deloitte said in the report.
According to the report, there will be opportunities in the fuel value chain including mining, fuel processing, enrichment, reprocessing, waste management, heavy water production.
There will be more joint ventures or acquisition by Indian companies to gain expertise in various areas of the nuclear supply chain. “This will help in possible localisation of design and production of equipment for nuclear power plants. This association could possibly be extended to supply conventional equipment to other countries,” Deloitte observed.
Post the Fukushima nuclear accident, there has been a lot of apprehension on safety of nuclear power and the country has seen public resistance at several proposed nuclear power plant sites. Deloitte suggests that the apprehensions on nuclear power need to be allayed by familiarising the general public on India's approach to safety standards, its policies and regulations on safety and its spectacular safety record.
The report, “Nuclear power in India — A way forward”, was released by Atomic Energy Commission chairman R K Sinha at the Indian Nuclear Energy Summit on Thursday. The report noted that imported LWRs would play a key role in India's nuclear capacity addition in the future.
However, due to the high capital costs of LWRs and the high interest rate regime in the country, the resulting tariff would be high and it would not be competitive with rupee financing from domestic institutions. The nuclear power with low fuel cost escalation would be competitive to meet the energy requirements of the country, provided a suitable financing mechanism was put in place. Deloitte, however, said if the LWRs were funded with longer duration and cheaper debt, then the tariff would become comparable to pressurised heavy water reactors and would be able to compete with fossil fuels.
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Currently, the state-run Nuclear Power Corporation is in the midst of procurement of several LWRs with foreign collaborations with unit sizes ranging between 1,000 Mw and 1,650 Mw.
“The Nuclear Power Corporation is correctly following a strategy of a combination of indigenous PHWRs and imported LWRs. Given the price sensitivity of the electricity market in India, it is important to get the right finance for LWRs - both tenure and rate - to get a competitive tariff,” Deloitte said in the report.
According to the report, there will be opportunities in the fuel value chain including mining, fuel processing, enrichment, reprocessing, waste management, heavy water production.
There will be more joint ventures or acquisition by Indian companies to gain expertise in various areas of the nuclear supply chain. “This will help in possible localisation of design and production of equipment for nuclear power plants. This association could possibly be extended to supply conventional equipment to other countries,” Deloitte observed.
Post the Fukushima nuclear accident, there has been a lot of apprehension on safety of nuclear power and the country has seen public resistance at several proposed nuclear power plant sites. Deloitte suggests that the apprehensions on nuclear power need to be allayed by familiarising the general public on India's approach to safety standards, its policies and regulations on safety and its spectacular safety record.