New Delhi: The nuclear deal between India and US may have crossed the barriers at the legislative level during the President Obama's visit to India, but the foremost question still remains regarding the operating cost and feasibility of producing nuclear energy.
In a report published in The Indian Express it says that the technological requirements on which the US based nuke firms operate is going to cost much higher than the technology on which the nuclear energy is used to produce power in India.
In India most of the nuclear reactors operate on pressurised heavy water reactor (PHWR) technology in which project cost of up to Rs 7 crore per MWe (mega watt electrical) whereas the US firms make nuke reactors based on Light Water Reactor (LWR) technology. The operating cost of such projects ranges between Rs 12 crore and 25 crore per mega watt electrical (MWe).
Companies like GE-Hitachi and Toshiba-Westinghouse Electric, and France's Areva which makes such reactors have given a measured opinion on whether the deal is really going to benefit India' s power sector. They said that the deal was still ‘in progress'.
The representatives of both the companies believed that the higher capital costs will get transformed into a spike in generation tariff.
The ‘overnight capital cost' which can be also termed as Engineering Procurement Cost (EPC) added with ‘owners cost' for nuclear projects have rose from Rs 3.8 crore at the enjd of 1990s to about Rs 18 crore per MWe in 2014.
The GE-Hitachi's ESBWR (Economic Simplified Boiling Water Reactor) design, based on which the Kovvada project has also been delayed by at least four years has two units of the same 1,650 MWe reactors that are to be deployed at Jaitapur in Maharashtra.
A spokesperson for GE-Hitachi, said, “We believe a sustainable solution is one that brings India into compliance with the International Convention on Supplementary Compensation”.
The two new Russian design reactors which will be set up at the Kudankulam power project has involved a sanctioned cost of Rs 39,849 crore which means it's around 20 crore per MWe which is much higher than the established bench mark of 7-10 crore in India.