Actually, the nuclear story being unveiled by the Nuclear Power Corporation of India (NPCIL), with as many as 20 power reactors under its umbrella – many operating at 90 to 95 per cent availability factor – is a bright addition to the Indian industrial corporate scene. The NPCIL reveals a picture of dedication and efficiency in reactor operations, in which a frontier technology blends with tight corporate financial management to give excellent results. A rising curve of power generation, steady growth in profits, an ambitious developmental programme, mapped out not on the strength of budgetary support, but internal accruals.

The perspective has been dramatically altered by lifting of sanctions on India’s international nuclear commerce by the Nuclear Suppliers’ Group. Indigenous PHWR programme, hitherto developing under constraint of meagre uranium resources, has given way to prospects of rapid growth, with uranium imports for capacity power operations under IAEA safeguards. India’s own uranium resource base is expanding, with opening of new mines.

Besides spurring indigenous PHWR construction, the way has opened for advanced light water reactor imports from Russia, France, United States and other countries, in order to give nuclear power’s share a big jump. The vendors themselves are all too keen to offer advanced light water reactors to India: it’s big business in a weak market. Together, these two sources of nuclear power construction can break India’s power shortage and create electric power adequacy during the present and the next decade. This prospect means a lot for Indian economy, for adequate electric power is the fulcrum round which modern developmental plans revolve.

The NPCIL has seized this opportunity with both hands. In fulfillment of the Planning Commission’s integrated energy plan, the nuclear power target for 2020 has been pushed up from the original 20,000 MWe to 35,000 MWe, and the target for 2032 to a hefty 63,000 MWe.

To meet these twin targets, NPCIL has mapped out an ambitious nuclear power construction programme and is energetically moving towards its realization. There are two streams of reactor construction planned. First is an accelerated programme of indigenous PHWR construction. The Atomic Energy Commission having stepped up reactor design to 700 MWe, as many as 10 such PHWRs have been lined up for construction by 2015 to 2018. Construction of four reactors at two sites – Kakrapar 3 and 4 and Rajasthan 7 and 8 – is in full swing. Construction of six more 700 MWe reactors – four reactors at Kumharia in Haryana and two at Bargi in Madhya Pradesh – is bring processed. These reactors will add 7000 MWe nuclear power to the grid. Construction of six more 700 MWe reactors at a site in Orissa awaits clearance by the Centre.

However, the target of 63000 MWe by 2032 set by the Integrated Energy Policy of the Planning Commission, is much too big – the indigenous PHWR construction programme will not be enough. NPCIL therefore proposes to import 40,000 MWe advanced light water reactors from Russia, France, United States, and other countries during the next two decades.

Four sites have been selected for setting up these LWRs. At Kudankulam, two Russian VVER design reactors, each of 1000 MWe capacity, are already nearing completion. Negotiations are in progress with the Russians for construction of another two VVER reactors of 1000 MWe each at Kudankulam, to be followed later by two more LWRs of VVER design from Russia. The leading French company AREVA has offered to set up six advanced design European Pressurized Reactors (EPR) of 1650 MWe capacity each, and negotiations are in progress with Areva for setting up initially two EPRs. Negotiations are on with Westinghouse for two LWRs of 1200 MWe capacity from among the designs they have offered. GE-Hitachi has offered to set up six reactors of 1400 MWe of their boiling water reactors. Two designs are on the table, ABWR, which is a proven design, and ESBWR, which is claimed to be the most advanced design but no ESBWR is yet proven or its construction undertaken. Initially, two reactors of either design are to be taken up for construction, for which negotiations are in progress.

Clearly, NPCIL faces big challenges for realizing this ambitious programme of speedy build up of nuclear power capacity. The first is the challenge on the financial front. The NPCIL has an outstanding performance record of success on the financial front, which has resulted in a cash surplus of Rs 13,000 crore, from operations of 18 PHWRs – 16 being 220 MWe and two of 540 MWe capacity.

Typically, these nuclear projects are developed on a 70:30 debt-equity ratio and do not get any budgetary allocation. NPCIL net assets are now worth Rs 38,448 crore and it has net-worth of Rs 21,268 crore. The resources for 700 MWe chain of PHWR construction planned for the coming decade are to be similarly raised from internal and extra-budgetary resources of NPC. The perspective is that the indigenous programme will enhance NPCIL financial resources and assets at the end of this decade in a big way – possibly doubling them.

As for the proposed LWR imports, these have to be financed separately. For LWRs, the debt is expected to come from the vendors’ home country government loans as well as market borrowings. “The key would be to reduce the cost of capital, particularly debt and also ensure that our interests are protected over the long term,” says Mr S.K. Jain, Chairman and Managing Director of NPCIL.

Negotiations for advanced LWRs to be imported from leading countries are a complex affair – the complexity pertaining to technology appraisal, the safety factor, and recurring cost of electricity output, and therefore capital costs. As per technology appraisal, the status of GE-Hitachi’s ESBWR leaves a question mark, for the reactor design is not proven, and there is no project even in the United States for ESBWR construction. The problem here is that the Obama administration is pressurizing Indian government to give priority to ESBWRs. The danger is that New Delhi might yield to American political pressure. This is a risk that the Indian nuclear establishment cannot accept. ABWR on the other hand is a proven design and could well be the preferred choice till experience is available on ESBWR deployed in other countries.

The French offer of Areva’s EPR too leaves some gaps in technology appraisal – specifically in relation to safety. Unlike GE’s ESBWR design, the Areva EPR reactors are under construction in Finland, France and China. However, in Finland the project has been delayed because of issues raised by Finland’s nuclear regulator on some safety aspects. The Indian nuclear establishment has to examine the relevant technological aspects thoroughly before a final agreement is signed.

The second major aspect of the ongoing negotiations is costs. NPCIL seeks to lower capital costs so that the recurring price of electricity per unit compares favourably with indigenous power per unit – Rs 2.75 per unit as of now, and Rs 4.20 per unit expected in 2018. Lowering the capital cost can be achieved by fusing Western technology with Indian nuclear industry’s competitive low costs. Indian nuclear industry on its part will have to expand and meet the perfection standards of atomic power production. The ongoing discussions between NPCIL and vendors of light water reactors will have to be protracted and pin-pointed. There is no room for political pressures or lobbying.

All said and done, the NPCIL is expected to emerge stronger and with a bigger stature from the challenges that it is going through – in indigenous PHWR construction and induction of advanced LWRs in the Indian nuclear programme. The vision being unfolded by NPCIL is of optimum growth, technology development and creation of vast resources for the nation. NPCIL is able to achieve the type of results expected because it is a PSU where science is in command, not the bureaucrats – a bit of socialism with Indian characteristics! (IPA Service)