Home / Industry / Energy /  Jaitapur nuclear project unlikely before 2021, says Areva

Paris: The controversial Jaitapur nuclear power project, against which local residents and activist groups have been protesting, may only be commissioned by 2021 at the earliest.

That’s if the contract for the two European pressurized reactors (EPRs) between state-owned Nuclear Power Corp. of India Ltd(NPCIL) and France’s Areva SAis inked in the current calendar year.

This looks ambitious, given that the two companies still need to iron out critical issues such as India’s Civil Liability for Nuclear Damages Bill, credit arrangements for the construction and the final cost of the project located in Maharashtra.

The €7 billion general framework agreement signed in December 2010 during former French President Nicolas Sarkozy’s visit to India deals with the supply of two EPRs, each with a capacity to produce 1,650MW of electricity, and uranium supply for a period of 25 years for the Jaitapur project. These units are the first of six that are proposed to be constructed at Jaitapur and were earlier expected to be commissioned by 2018. The complex is envisaged as having an overall capacity of 10,000MW eventually.

“If the agreement was signed before the end of this year," the reactors could be put in place within 90 months, said Arthur de Montalembert, executive vice-president, business development, international commercial organization at Areva.

While the agreement is seen as a boost to the strategic ties between the two countries and expected to help India’s quest for clean fuel to power its economic growth, the commercial contract is yet to be inked as there are several loose ends to be tied up. Mint reported on 7 December that India’s satisfaction over the deal may have to be tempered.

“The negotiations are on and hopefully will be signed soon. As you can imagine, the final say is with the customer. There are points which need to be further discussed. The main reason for the delay was the Fukushima accident. That is not specific to India. All new built projects in the world were delayed or stalled and some even cancelled because of the accident," said de Montalembert.

These negotiations also come in the backdrop of Tokyo Electric Power Co.’s crippled Fukushima nuclear plant springing another radioactive water leak. The Indian government has been trying to downplay the security concerns on the EPRs.

The department of atomic energy said in a 2 May press statement, citing a reply in the Rajya Sabha, “These have evolved from the proven design, safety principles and manufacturing technologies employed in N4 reactors in France and Konvoi nuclear power reactors in Germany which are in safe operation for last several years. Currently, EPRs are under construction in Finland, France and China. These will be operational in two to four years and their operational feedback will also be available for reactors to be set up at Jaitapur."

Reacting to statements about an untested EPR being used at Jaitapur, Montalembert said, “This argument of untested and unproven is just baseless. It is the argument for the sake of saying that I don’t like this reactor, let’s call it untested and unproven."

While NPCIL chairman and managing director K.C. Purohitcouldn’t be immediately contacted, a French government official requesting anonymity, said, “The negotiations have been restarted. Some of the issues that are being negotiated upon include the credit arrangement for the project and the civil liability."

The Indian government has been trying to increase power generation in order to meet demand and boost economic growth.

In response to a question about Areva being able to keep the electricity tariff from the project at 4 per unit to help keep in viability, de Montalembert said, “It all depends on when the plant will start. The 4 per unit tariff is meant for plants starting in 2017 or in its vicinity. The price is not something that is fixed. Right now, there is no way that the EPR can start in 2017. I would say that the tariff holds true but you have to take into account the actual time when tariff is applied."

This comes in the backdrop of the world’s first EPR still being built at Olkiluoto in Finland that was to be commissioned in end 2009. Similarly, another EPR being built at Flamanville in France has also been inordinately delayed, resulting in cost over-runs. However, Areva is confident that the Taishan 1 and 2 EPRs in China will be on schedule.

Explaining the reason behind the delays at Olkiluoto and Flamanville, de Montalembert said, “It is the first of its kind of a new generation reactor. It is part of an evolution. We had to reconstitute the supply chain for the reactor. It took longer than foreseen. Taishan 1 and 2 are like EPRs in Olkiluoto and Flamanville where construction, planning and costs are right on time. The reason is that all the lessons learnt from first of its kind projects have been taken into account and have allowed for streamlining and optimizing not only the way that the construction is processed but also the EPR itself. The other important thing about China is that they have an ongoing (nuclear) programme when they signed for the EPR. So all their supply chain is in place."

The company, which has €9.34 billion in annual revenue, supports 360 of the 440 operational nuclear reactors in the world. With Germany, which is one of Areva’s major customers, planning to wean itself away from nuclear power and decommission its reactors, the French energy firm is focusing on the so-called BRICS grouping of Brazil, Russia, India, China and South Africa along with Mexico for future orders.

India has an installed power generation capacity of 223,626MW, of which 2.1% or 4,780MW, is nuclear power. It wants to boost this to 63,000MW capacity by 2032 in the face of anti-nuclear protests at Jaitapur and at Kudankulam in Tamil Nadu, another site for such a project.

Earlier this month, the Supreme Court cleared the Kudankulam project being constructed by the Russians.

While de Montalembert declined to comment on NPCIL’s late move on sensitizing the local populace, he said, “We believe that public acceptance is very important and a precondition for future nuclear (power projects). There can be no nuclear (project) if there is no public trust or acceptance. That is something that we consider a necessity."

In response to a direct question about Areva being agreeable to India’s Civil Liability for Nuclear Damages Bill that puts the onus on suppliers, de Montalembert said, “We don’t have any choice. As a policy we operate in accordance with the law of the land and with international law. This is the matter of principle, wherever we are. So, if we work at Jaitapur, it’s because we find it comfortable to work under the Indian law. I would say that we’re comfortable with working under the Indian law as long as it is compatible with the international regime that we are working with throughout the world."

The writer is in France as a guest of the French government.


Utpal Bhaskar

"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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