Business Daily of THE HINDU group of publications in a recent article, titled $1600/kW is benchmark cost for light water reactor imports sheds new light on Indian present and future LWR costs and plans. The article that the two Russian VVER-1000 reactors nearing completion at Koodankulam have a
total construction cost was estimated at $2.6 billion.Indian sources rarely provide much information on financing or credit costs for nuclear capital financing. I suspect that the other 50% for the Koodankulam reactors come directly or indirectly from the Indian government. According to the story,
At current exchange rates, it translates to around Rs 6.5 crore per MW.
The Russian Government had provided India with long-term credit, which covers almost half of the cost of the first two units.
NPCIL expects the first Koodankulam unit, when operational, to be able to sell power at less than Rs 2.50 a unit (kilowatt hour).When completed, the two VVER-1000 will increase Indian rated nuclear capacity by 50%. Most locally designed Indian reactors are small and have a rated power output of about 1/5th that of the Russian designed WWERs. Reactor manufactures often see reactor sales as loss leaders, and plan to recoup discounts by long term contracts for nuclear fuel. This fits in well with long term Indian nuclear plans. The Indians intend to use the "spent nuclear fuel" often wrongly called "nuclear waste," to fuel their future fast breeder reactors. The prototype Indian Fast Breeder reactor is expected to come on line next year, and the Indians plan to build 4 more by 2020. By 2050, the Indians would like to have more than 300 fast breeders online. Thus the Russian interest in selling uranium motivates their willingness to sell the Indians reactors on favorable terms, while the Indian desire to recycle used nuclear fuel in fast reactors, motivates their desire to obtain Russian uranium.
Russia has offered a sweetener in the form of a 30 per cent discount on the $2-billion price tag for each of its new nuclear reactors under discussions for sale to India. The Russians have offered the discount based on plans to start serial production of reactors for the Indian nuclear industry, with much of the equipment and components proposed to be manufactured in India, thereby bringing down costs.
After factoring in the discount, the cost of construction for a mega watt (MW) for each new reactor comes to roughly Rs 7 crore (at current exchange rates, without including decommissioning costs).
The Indians appear to be making the Russian deal the standard for negotiating costs with other reactor manufacturers. Indian industries have announced plans for the construction of $50 billion in industrial infrastructure.
The costing aspect gains significance as the Government's plans to scale up India's nuclear capacity nearly ten-fold over the next decade is underway, with the Centre according ‘in principle' approval to over 38,000 MWe (mega watt electrical) of new reactor capacity.
Imported LWR units ranging from 1,000 MWe to 1,650 MWe from Russia, France and the US would make for over 80 per cent of the envisaged capacity, with indigenous Pressurised Heavy Water Reactors of 700 MWe accounting for the rest.
The Indian preference for foreign LWRs, does not reflect negatively on the local nuclear technology. Rather the Indians are interested in access to the uranium that is part of the Light Water Reactor business plan.
The planned new Russian reactor will be a slightly larger version of the Russian WWER-1000s now under construction in India.