NPCIL and AREVA to expedite talks to seal commercial agreement for Jaitapur project

Locaslisation of reactor equipment to bring down rate to Rs 6 -6.50 a unit

Nuclear Power Corporation of India Ltd (NPCIL) and Areva are expected to speed negotiations to enter into a commercial agreement for the supply of six evolutionary pressurised reactors (EPRs) of 1,650-megawatt (Mw) capacity each for the Jaitapur project in Maharashtra.

The agreement signed between India and France on Friday laying emphasis on localisation has paved the way for resumption of talks as little progress has been made so far since NPCIL and Areva entered into an early works contract in December 2010.

Nuclear sector experts say the thrust on the localisation, especially with the involvement of Larsen & Toubro during the construction of 9,900-Mw Jaitapur plant will help bring down the per-unit tariff to Rs 6- 6.50 a unit, down from Rs 9.18 a unit quoted earlier by Areva.

The project is likely to come up in 2022. The cost of power was a major roadblock for talks to move forward as NPCIL and Areva had differences.

France has also decided to provide India a loan for the project at 4.8 per cent interest rate for 25 years.

NPCIL official told the Business Standard: “The localisation in manufacturing reactor equipment will be achieved for nuclear island, conventional island, auxiliary island and service system of the Jaitapur nuclear plant. Various components can be manufactured here and installed with exacting standards as specified by Areva. The cost of components will be cheap which will help make the Jaitapur tariff quite competitive.”

NPCIL’s former chairman and managing director S K Jain, during whose tenure the early works agreement was signed, said the feasibility study carried out had clearly said the Jaitapur project was feasible, economical and viable thanks to the judicious mix of localisation and financing. “The per unit tariff of Jaitapur project will be at par with the thermal power projects in the country,” he noted. The issues relating to the civil nuclear liability had hampered the talks between NPCIL and Areva. However, experts believe India's plan for an insurance pool could address the concerns raised by Areva. The government of India has also clarified that India's Civil Liability for Nuclear Damage Act, 2010 was compatible with the Convention on Supplementary Compensation for Nuclear Damage. Meanwhile, NPCIL official said EPRs will have safety features to address even beyond design basis scenarios.

The reactors designs will have passive safety systems requiring no operator intervention in the event of a major malfunction.