Nuclear Energy: India Is Losing A Winning Hand

http://www.businessworld.in/article/Renewable-Energy-India-Is-Losing-A-Winning-Hand/19-01-2016-90425/

Rajendra Shrivastav

The mandarins of nuclear power programme in India are using public money for decades but have not been able to master the art of implementing it on commercial lines.

Thanks to Homi Bhabha, a brilliant nuclear physicist who died prematurely in an air crash near Mont Blanc (the French Alps) on 24 January 1966, India had a head start in the 1960s in employing nuclear fission energy for power generation. At that time, in the evolution of global atomic energy, only a few countries in Europe, Russia and North America were able to use nuclear energy for power generation and that too on a very modest scale. On 29 October 1969, a 2×210 megawatt (MW) capacity nuclear power plant at Tarapur in Maharashtra began supplying power to the grid of Maharashtra and Gujarat. With this development, India joined the small select club of countries such as the US, the UK, Canada, France and Russia that were operating nuclear plants to supply electricity for consumption of common man. The two units at Tarapur are still in operation and supply electricity at less than Rs 1 per Kwhr to the Western Grid.
India has consistently added a few thousand mega watts of power generation capacity from coal, hydro, diesel, and wind energy sources in each successive year. But the addition of nuclear power capacity has not kept pace. While the total generation capacity of India has rapidly climbed from 6,000 MW in 1970 to 2,90,000 MW in December 2015, nuclear power generation capacity increased from 440 MW to only about 5,780 MW during the period. The share of nuclear power in the Indian context was quite significant in the 1970s but with the passage of time it has paled into insignificance.
India’s domestic nuclear power programme, based on indigenously built pressurised heavy water reactors (PHWRs), has been designed, developed, constructed and operated by the government of India through the Department of Atomic Energy (DAE) and its public sector arm, the Nuclear Power Corporation of India (NPCIL). The critical point is that in the past 45 years, we have really not learnt to build these plants in a professional manner within the prescribed time schedule and estimated costs.
Seventeen out of the 19 PHWRs were built way beyond approved budgeted costs and scheduled time frames. For instance, the 2×220 MW Narora units were sanctioned at an estimated cost of Rs 210 crore, but the Narora Atomic Power Plant (NAPP) was eventually completed at a total cost of about Rs 800 crore. Kakrapar units 1&2 were originally estimated to cost Rs 383 crore, but were completed at Rs 1,400 crore. Similarly, Kaiga units 1&2 in Karnataka and RAPP 5&6 in Rajasthan were originally estimated to cost Rs 699 crore and Rs 700 crore, respectively. The completed costs were about Rs 2,200 crore for Kaiga and more than Rs 2,200 crore for RAPP.
The story is the same in terms of time frames. NAPP was approved in 1972 and was connected to the northern grid in 1992 (gestation period of 20 years). The two units of Kakrapar, 1&2, were sanctioned in 1980 and went into commercial operation in 1995. Kaiga units 1&2 were sanctioned in 1985 and connected to the Southern Grid in 2000. Rajasthan units 3&4, sanctioned in 1985-86, were connected to the Western Grid in 2000.
Even after four decades, things haven’t changed much. Consider the latest examples of two units each of 700 MW capacity PHWRs to be built at Kota in Rajasthan (RAPP 7&8) and at Kakrapar (KAPP 3&4) in Gujarat. Both projects are already delayed by over three years each beyond the original time schedule. The latest in this series of 700 MW PHWR type reactors, the Gorakhpur-Haryana Anu Vidyut Pariyojana (GHAVP), has a similar story. While it was given administrative and financial sanction in February 2014, till date no order has been placed for the power plant equipment, components and civil works. After the placement of civil works order, it will take about another year to reach the ‘First Pour of Concrete (FPC)’ milestone, which was planned in June 2015. There are endless slips in every under-construction project at RAPP, KAPP and GHAVP and these projects are going to mimic the cost and gestation period of their predecessors at Kaiga, Narora and Rajasthan. This is a classic case of ‘those who do not learn from history are condemned to repeat it’.
The first unit of GHAVP was scheduled to be completed in 63 months and the second unit in 69 months, in order to supply power to the grid by September 2020 and March 2021, respectively. In a reply in the Parliament in December 2015, the government stated that the work will only begin in early 2016. This is an admission of delay by two years in project activities. Without the Civil Liability for Nuclear Damages (CLND) issue being settled and the Indian Nuclear Insurance Pool (INIP) agreement with NPCIL and the suppliers signed, no orders could possibly be placed with domestic or international suppliers for any hardware and services for GHAVP. No clear commitment of date is available to close the INIP and CLND for the Gorakhpur nuclear power plant.
The often touted cost of generation from GHAVP in public domain at Rs 6.6 per unit in 2020 would most likely be revised to Rs 7.5 by the time it is completed, provided the delay is restricted to three years. Should further delays occur, unit energy cost (UEC) for grid supply may reach Rs 8 per unit. It may be noted that UEC of imported Light Water Reactors (LWRs) from the US of 1200 MW to 1450 MW unit size and from France of 1750 MW unit size by DAE will be no different than for indigenously built GHAVP, if they were all to be put into operation simultaneously by 2024-25.
The mandarins of nuclear power programme in India are using public money for decades but have not been able to master the art of implementing it on commercial lines. Given the history of cost and time overruns of PHWRs of 200 and 700 MW unit size, they are not likely to be competitive even on Indian soil, only succeeding due to a misplaced sense of ‘Make in India’ but with an inefficient use of taxpayers’ money. The domestic nuclear power programme has practically lost its plot.

The author is former MD, Nuclear Business, Alstom; president, Indorama and country director, EDF

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