2 new Russian reactors for Kudankulam to cost double, most expensive n-plants

The first set of twin reactors that are part of the 12 reactor units that Russia has undertaken to supply to India will be the most expensive nuclear power units to be set up in the country so far.

The two new Russian-design VVER-1000 reactor units (KKNPP 3 & 4) to be set up in Tamil Nadu, which would come up at the Kudankulam site where two identical units (KKNPP 1 & 2) are nearing commissioning, entail a sanctioned project cost of
Rs 39,849 crore. This would translate into a cost of nearly Rs 20 crore per MWe (mega watt electric) as against the established benchmark of project cost of Rs 7-10 crore per MWe for existing nuclear projects based largely on the
indigenous PHWR (pressurised heavy water reactor) technology.

The comparative cost of setting up a supercritical-technology based thermal power project is around Rs 6 crore per mega watt. The final cost of the new Russian LWR (light water reactor) units, for which state-owned Nuclear Power Corp (NPCIL) is in negotiations with Russian reactor vendor Atomstroyexport, could go up further, depending on the resolution of the uncertainties over the Civil Liability Nuclear Damage Act, 2010.

The government has taken up the matter of developing an appropriate insurance product to cover the liability under the provisions of the Act, which was enacted with the aim of tying down foreign suppliers to a liability regime but is now being perceived as having created unlimited liability — both in time and costs — for vendors.

The contentious clauses in the law include 17 (b) ,which says the operator (NPCIL) has the right to recourse against suppliers in case of a nuclear accident, and clause 46, which says the suppliers can be sued under any other Indian law as well as by citizens at large.

According to official sources privy to the discussions on the nuclear collaboration in the run-up to Russian President Vladimir Putin’s visit, the Russian side has indicated that its state-owned nuclear utility Rosatom is open to shortlisting three-four Indian equipment vendors for future nuclear power projects being jointly planned in India.

The focus is on moving to a serial construction model, starting with localising mechanical engineering production to produce components and equipment in India in order to avoid time and cost overruns, as experienced with the first couple of units of the Kudankulam project.

At the Kudankulam site, where the two Russian-designed VVER-1000 series reactors are being installed, 100 Russian companies and organisations are involved in documentation, supply of equipment and controlling construction and equipping process.

This has been cited as one of the reasons for the delays and localisation is being considered for quicker project execution at cheaper costs. While the Indian nuclear liability legislation had been seen as a stumbling block for the negotiations for new project sites, the “roadmap” for development of cooperation in the area of civilian nuclear energy signed by India and Russia envisages at least one more site to be earmarked for the Russians, where a minimum of six units could be built. This, sources said, gives Russians the confidence to start serial production here as and when the liability hurdle is cleared.

As compared to the sanctioned cost of Rs 39,849 crore estimated for the twin Russian units (KKNPP 3&4), the sanctioned cost of a Greenfield project in Haryana based on the domestic PHWR-technology — the 2×700 MWe Gorakhpur Haryana Anu Vidyut Pariyojana-1&2 — is about half of the cost of the Russian LWR-technology based project at Rs 20,594 crore. It needs to be noted that the capacity of the indigenous reactors at 1400MWe is about 66 per cent of the 2000MWe capacity of KKNPP 3 & 4. The two new Kudankulam units — KKNPP-3 & 4 — are expected to be ready for commercial operations by the year 2020-21. Currently, for the existing set of 20 reactors in operation in the country, the maximum per unit (kWh) tariff is Rs.3.41 per unit (including fixed and energy charges).

The first set of Russian VVER reactor-based projects set up in the country at Kudankulam — KKNPP 1 & 2 — has a sanctioned cost of Rs 17,270 crore, which is up for revision currently. The first 1,000 MWe unit of KKNPP, which was close to commissioning but had to be shut down due to a technical issue with the turbine, is almost ready while the second VVER-1000 light water reactor is in advanced stages of commissioning.

RISING COSTS

New projects

* Kudankulam Nuclear Power Project – 3 & 4 2×1000 MWe capacity; Rs 39,849 crore
* Gorakhpur Haryana Anu Vidyut Pariyojana – 1 & 2 2×700 MWe capacity; Rs 20,594 crore

Ongoing projects

* Kudankulam Nuclear Power Project – 1 & 2 2×1000 MWe capacity; Rs 17,270 crore (Under revision)
* Kakrapar Atomic Power Project – 3 & 42×700 MWe capacity; Rs 11,459 crore
* Rajasthan Atomic Power Project – 7 & 8 2×700 MWe capacity; Rs 12,320 crore