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$1600/kW is benchmark cost for light water reactor imports

March 21

The Centre has pegged the benchmark capital cost for the new Light Water Reactor (LWR) imports that are under discussion with Russia, France and the US at $1,600 per kilowatt, or around Rs 7.2 crore per mega watt.

“The capital cost sanctioned to the Department of Atomic Energy is $1600 per kilowatt for each of the four Russian ‘VVER' reactors coming up at Koodankulam. This will be the broad benchmark for reactors proposals under discussion by State-owned Nuclear Power Corporation of India Ltd (NPCIL) with reactor vendors from France and the US as well,” a Government official involved in the exercise, said.

The capital cost estimates compare with around Rs 4-6 crore per MW for Greenfield thermal stations and over Rs 5 crore for a new hydro project.

Key factor

“The cost is the most crucial while signing contracts. If a project proposal is forwarded to the Government, we have to show that we will be able to sell the power at competitive rate. So a cost benchmark is crucial during negotiations and this will be around $1,600 per kilowatt,” the official said.

In the case of first two ‘VVER-1000' units that are currently under construction at Koodankulam, the total construction cost was estimated at $2.6 billion.

At current exchange rates, it translates to around Rs 6.5 crore per MW.

The Russian Government had provided India with long-term credit, which covers almost half of the cost of the first two units.

NPCIL expects the first Koodankulam unit, when operational, to be able to sell power at less than Rs 2.50 a unit (kilowatt hour).

Russia has offered a sweetener in the form of a 30 per cent discount on the $2-billion price tag for each of its new nuclear reactors under discussions for sale to India. The Russians have offered the discount based on plans to start serial production of reactors for the Indian nuclear industry, with much of the equipment and components proposed to be manufactured in India, thereby bringing down costs.

Cost of construction

After factoring in the discount, the cost of construction for a mega watt (MW) for each new reactor comes to roughly Rs 7 crore (at current exchange rates, without including decommissioning costs).

The costing aspect gains significance as the Government's plans to scale up India's nuclear capacity nearly ten-fold over the next decade is underway, with the Centre according ‘in principle' approval to over 38,000 MWe (mega watt electrical) of new reactor capacity.

Imported LWR units ranging from 1,000 MWe to 1,650 MWe from Russia, France and the US would make for over 80 per cent of the envisaged capacity, with indigenous Pressurised Heavy Water Reactors of 700 MWe accounting for the rest.

Site clearances

Site clearances, including primary environmental clearance, have been received for the second phase of the Koodankulam project (four additional Russian reactors) and the Jaitapur site (in Maharashtra), where French nuclear major Areva NP will set up reactor units.

Toshiba-Westinghouse's AP1000 series of reactors, GE-Hitachi's ABWR reactor series, Areva's 1,650 MWe European Pressurised Reactors, besides the Russian ‘VVER' series reactors, are set to be deployed at the earmarked sites. The current installed nuclear capacity is 4,250 MWe.