The Haryana government plans to set up a 1,600MWe (megawatt equivalent) nuclear power project near Fatehabad in the state by 2012 at an investment of around Rs10,000 crore with the help of Nuclear Power Corp. of India Ltd (NPCIL) in an effort to bridge the gap between demand and supply in one of India’s most industrialized states.
“The funding for the entire project will be borne by the state government,” said a senior official of the Haryana government, who did not wish to be identified.
Gurgaon and Manesar, preferred destinations for companies in industries as varied as automobiles and back-office operations, are both located in Haryana. The state has a demand of 8,900MW, but generates just 1,587MW; it is allotted 4,000MW from the central pool. To continue to attract investors, Haryana needs to generate more power. The state is banking on nuclear energy as it lacks resources such as coal, wind or gas that can be used to generate power.
The nuclear power project will be located at Kumaharia village and requires around 2,100 acres of land.
A Mumbai-based power sector analyst, who did not wish to be identified because the dispute surrounding the Indo-US civilian nuclear deal has made all things related to the business controversial, said there were several issues that needed to be addressed before work started on the project.
Much of this has to do with regulation. Indian laws reserve the nuclear energy business for the Union government. Nuclear power plants can only be set up by NPCIL, a public sector firm that works under the department of atomic energy. However, this is expected to change after the deal between India and the US is completed. When that happens, private sector firms and other state-owned firms (including public sector firms operating under state governments) will be allowed to set up nuclear plants.
Out of India’s installed power generation capacity of 128,000MW, nuclear energy accounts for only 3.05%. NPCIL plans to create additional generating capacity of 3,160MWe by 2012.
The Indo-US agreement is expected to ensure a smooth supply of fuel for the power plants; the unavailability of fuel has been one reason for nuclear energy not really taking off in India.
Meanwhile, nuclear power generation equipment manufacturers such as China’s Dongfang, US’ General Electric Corp., France’s Areva and EDS and local firm Bharat Heavy Electricals Ltd are looking to tap the opportunity.
Tata Power Co., Vedanta Resources and Reliance Energy Ltd have already expressed their interest in setting up nuclear power projects.
According to audit and consulting firm KPMG’s India Energy Outlook report, India’s department of atomic energy hopes to build 250,000MWe of nuclear capacity by 2050 to meet the country’s long-term power requirements.