With the US President George W Bush signing the Indo-US nuclear bill, India is looking at a more than seven-fold capacity increase over the next decade, to about 30,000 Mw. While there are many challenges to overcome from land acquisition to employee attrition, Nuclear Power Corporation of India Ltd’s (NPCIL is the only company authorised to build nuclear power plants in India) CMD Dr Sreyans Kumar Jain is confident the power will be competitively priced. Excerpts from an interview with Vandana Gombar and PB Jayakumar:
How soon will the first results of the nuclear deal be visible?
There are three major suppliers of light water reactors — the US, France and Russia. We still have to sign the deal with the US; the Inter-governmental Agreement (IGA) with the French has been signed and needs to be ratified; the IGA with the Russian Federation is slated to be signed during the first week of December when the Russian president is expected to visit India.
In the last three years, we’ve had detailed discussions with all the four vendors — General Electric, Westinghouse, Areva and Rosatom. To begin with, we are planning to negotiate with each one of them for one pair of reactors each (not less than 1000 Mw) with the clear understanding that there will be a basket of such reactors, that the relationship would extend to 6-8 reactors. You can’t start the construction of all the 20-30 reactors simultaneously. How soon will the reactors get operationalised?
We have two sites today, at Kudankulam (Tamil Nadu) and Jaitapur (Maharashtra) and the Russians are already working at the first one, so it is natural we would like to continue with their technology there. We are expecting the government to announce two more sites very soon from among the four shortlisted coastal sites at Gujarat, Andhra, Orissa and West Bengal. It takes at least 24 months for a greenfield site to be ready, and about 60 months thereafter.
How will you keep costs competitive if you’re not bidding out the contracts?
We’ve indicated very clearly to all the vendors that there are no subsidies and so the power has to compete with other energy resources in the country. So the project proposals, which will be jointly worked out, must ensure that the tariff is comparable to that from any thermal plant.
The benchmark price from the Sasan ultra-mega project is Rs 1.20 per unit …
That’s the ‘levellised’ cost – since our project life is 60 years, we’ll be better on that. Today’s tariff for Sasan will be Rs 4-4.5 while our tariff will not be more than Rs 4 per unit, and that includes the cost of everything including waste disposal and decommissioning.
And the funding?
We have enough cash to fund the equity to support 10,000 Mw and can go to the government for more. As for debt, we could borrow domestically or abroad or even get soft government credit/vendor financing. It all depends upon the terms.
How many of the 17 reactors in operation are eligible for imported fuel?
Including the five under construction, we’re talking of 22 reactors. Six are already covered under safeguards because they have been constructed with foreign collaboration — at Tarapore, Rajasthan and Kudankumlum. There is a plan to bring 8 more reactors under safeguards. So, 14 will be in the so-called civilian domain as per the separation plan. These would be run with imported fuel.
Is 40,000 Mw by 2020 realistic? We’ve just 4,000 Mw in the last 40 years...
Even if you have the money, there isn’t enough production capability. 30,000 Mw is more realistic.
You will soon have private sector competition, or are these companies trying to partner with you?
The country needs more than one agency to meet the power requirement. But before opening up, we need to frame rules and regulations. Nuclear power plants can’t just be shut down like the Enron one was. They require the same kind of attention whether they’re operational or shut. So we need to ensure that all the players who want to enter have the right credentials, that their business interests don’t override their commitment. Today, our country has given assurances that we have a sound material accounting system — this means each gram of nuclear material which comes to this country is accounted for. So naturally there has to be some mechanism to work out how the accounting will be done for all private players who get this fuel. What happens to the spent fuel? Who will have waste handling responsibility? These are some issues for which government policies are to be spelled out and regulations developed. All this can be done in 2-3 years.
Are you looking an IPO?
If required, we can have one, there is no restriction. NPCIL’s board is empowered to take that decision.
What is your main challenge today?
The main challenge is to realise the opportunities. The debate on the deal has become a household word and the euphoria is very high. People have no idea of how much time it takes to really get the power from a nuclear power plant. When it comes to land acquisition, the issues are same whether it is for a Nano or for a nuclear power plant. We will also have to work out some innovative method of taking over land from existing holders. Maybe we could give them a stake in our plant because whatever compensation you give looks handsome today, but in few years, it goes down the drain — in celebrating birthdays and marriages. Maybe all these people should be stakeholders.
