Jaitapur nuclear plant headed for delay: Areva
Even as India is looking forward to reach an agreement on civil nuclear energy cooperation with Japan during Prime Minister Manmohan Singh’s ongoing visit, the unending delay in signing the commercial agreement with French major Areva for building two nuclear reactors at Jaitapur, Maharastra is threatening to derail the economics of the project. Moushumi Das Gupta reports.world Updated: May 30, 2013 22:01 IST
Even as India is looking forward to reach an agreement on civil nuclear energy cooperation with Japan during Prime Minister Manmohan Singh’s ongoing visit, the unending delay in signing the commercial agreement with French major Areva for building two nuclear reactors at Jaitapur, Maharastra is threatening to derail the economics of the project.
Christian Lechervy, Special Advisor to French President and incharge for Strategic Affairs & Asia Pacific told HT that the delay in signing the commercial pact with Areva will not only penalize the seller but will also affect the consumers.
“We are striving to finalize it as quickly as possible…. We know how great the need is for electricity in India. Negotiations are on and if it is concluded within the year, it would be good news for everybody,” he said.
Areva had in 2010 signed a framework agreement with the Nuclear Power Corporation of India (NPCIL) to build two of the new generation European Pressurised Reactors (EPR) of 1650 MW each as part of Phase I with an option to build four more.
But amidst protests by locals -- concerned over safety issues following the Fukushima accident -- and confusion over some clauses of civil nuclear liability law that puts the onus on suppliers in case of accidents, the commercial pact has not been signed as yet resulting in the project failing to take off the ground.
The delay has not only resulted in Areva rescheduling the original 2017 date for commissioning the reactors but company officials said it will also lead to an escalation in the cost of power to be generated. Currently the per unit cost of power has been fixed at Rs 4.
“No way that the EPR would start by 2017. More the delay, the unit cost would get affected. The Rs. 4 per unit tariff is meant for plants starting in 2017,” said Arthur De Montalembert, executive vice-president, business development, international commercial organization at Areva.
He added, “If the contract is signed by the end of this year, Areva can put up the two reactors within 90 months.”
A senior French diplomat said that there are some technical issue related to transfer of technology, pricing per kilowatt hour and the legal framework under which it would be built that has to be resolved before any commercial pact is signed.
The total capacity of the plant will be about 10,000 MW.
According to Indian government sources the approximate cost at current prices for building the two reactors will be about Rs 1,20,000 crore.
Montalembert said that negotiations with NPCIL are at a fairly advanced stage but it would be very difficult to give a timeframe for sealing the deal.
On the contentious clauses in the civil nuclear damage liability bill, he said “We do not have a choice. We operate according to the law of the land. We find it comfortable with Indian law as long as it is compatible with international convention as far as Jaitapur is concerned.”
Areva is building similar third generation EPR reactors in France, Finland and China.
Currently 77% of France’s electricity requirement is met from nuclear power as compared to India’s 2 %. India’s nuclear capacity is under 5000 MW and is expected to increase to 20,000 MW by 2020.
After the Nuclear Supplier Group lifted the embargo imposed on India to engage in civil nuclear trade in 2008, France was one of the first countries to sign an agreement on civil nuclear cooperation with India.
(The reporter is in Paris at the invite of the French government)
Changes were made on May 30, 2013, to say "According to Indian government sources the approximate cost at current prices for building the two reactors will be about Rs 1,20,000 crore."