The cost factor: holding up the Jaitapur nuclear plant?

Atul Aneja | The Hindu

As India and France inch towards a deal on setting up two nuclear power reactors at Jaitapur in Maharashtra, issues other than the nuclear liability law are holding back the clearance of this ambitious power project.

Diplomatic sources told The Hindu that rather than the nuclear liability law, the price at which electricity would be generated by the two 1,650-MW reactors, has become a major topic of negotiations between Areva, the French supplier, and the Nuclear Power Corporation of India Limited (NPCIL). “We cannot have power supplied at rates higher than what other foreign competitors, including Russia and the United States, offer,” the sources said.

Visiting French Foreign Minister Laurent Fabius on Monday was categorical in his response to a question at a press conference that the nuclear liability law was not impeding a possible nuclear energy deal. In its final form, which would include installation of four additional reactors, the Jaitapur project would generate more than 10,000 MW of electricity, significantly boosting French nuclear commerce and bridging India’s energy security demands.

The dialogue between the French supplier and the NPCIL is at an advanced stage and various ideas are under consideration to bring down electricity costs..

“Localisation is essential because this will benefit domestic industry, especially in the field of Light Water Reactors (LWR),” sources said. Geared towards manufacturing Pressurised Heavy Water Reactors (PHWR), India’s nuclear industry will benefit significantly from French LWR technology.

Ratnagiri 20/04/2011 Pulice men at Jaitapur Nuclear power project site at Jaitapur on Wednesday.  Photo:  Vivek Bendre

Ratnagiri 20/04/2011 Pulice men at Jaitapur Nuclear power project site at Jaitapur on Wednesday. Photo: Vivek Bendre

The sources pointed out that the Fukushima nuclear accident also contributed to the delay in the Jaitapur project as the incident triggered a safety review by the French regulators of the European Pressurised Reactors (EPR), which are slated for supply at the site.

Unlike the Americans, the French have shown far greater flexibility in engaging India on the Nuclear Liability Law, the sources said.

The Indian side has also moved the pieces by fixing the operator’s liability, in case of a nuclear incident, at Rs. 1500 crore. “A foreign supplier’s liability cannot be fixed higher than this amount,” they said.

R.K. Sinha, Secretary, Department of Atomic Energy and Chairman of the Atomic Energy Commission, has been quoted as saying that along with the DAE, the Finance Ministry, the NPCIL and the insurance companies are involved in an exercise to provide cover to nuclear plants.

The sources said that after addressing initial problems related to costs, land acquisition, localisation and nuclear liability, a “critical mass” has now been created to accelerate foreign investments in nuclear power projects.

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