At Rs4 per unit, nuclear power to cost half of estimates: report

10 October 2008

Dispelling the myth about nuclear power being costlier than thermal and hydro electric power, S K Jain, chairman and managing director of the Nuclear Power Corporation of India (NPCIL), India's sole entity authorised to construct nuclear power plants in the country, has said that the cost of nuclear power would be comparable to conventional power plants.

Jain told Business Standard that NPCIL has clearly informed all its vendors that there are no government subsidies involved in the nuclear power deal, and therefore, power from nuclear sources will have to compete with power generated from other sources in India. He said that project proposals will take into account that the tariff is comparable to that of any thermal power plant.

Jain told the business daily that while the benchmark price from the Sasan ultra-mega project is Rs1.20 per unit, it represents the 'levellised' cost, as the project life is 60 years. He said NPCIL would better that, and though the current tariff for Sasan would be Rs4-4.5, NPCIL's tariff ''will not be more than Rs4 per unit, and that includes the cost of everything including waste disposal and decommissioning.''

According to an estimate by the Central Electricity Regulatory Commission (CERC), the cost of producing power (per kWh) with domestic coal is Rs2.94, and Rs3.50 without domestic coal.

The CERC estimate pegs the cost of generating power from hydro power stations (per kWh) between Rs1.79 and Rs4.72, varying upon the location, water flow and age of the power plant.

According to a report in the Financial Chronicle last week, state-owned Bharat Heavy Electricals (BHEL) and NPCIL are reported to be looking for foreign partners for their planned joint venture that will set up nuclear power projects in India. The report had quoted chairman and managing director of BHEL, K Ravi Kumar, as saying that the two government owned entities are talking to three foreign companies, including Siemens, Alstom and GE, for manufacture of 700MWe, 1,000MWe and 1,600MWe turbines for nuclear plants and related equipment and are looking for a foreign technology partner. The report had said that discussions with Toshiba and GE for reactors had also been initiated.