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print versionE A S Sarma
Former Secretary to the Government of India
To
Dr A K Mohanty
Chairman
Dept of Atomic Energy (DAE)
Govt of India
Dear Dr Mohanty,
I refer to the Nuclear Power Corporation of India Ltd (NPCIL)’s proposed (6 X 1100 MWe) LWR nuclear power project at Kovvada in Andhra Pradesh (AP). The US company, Westinghouse is expected to manufacture and supply its VVER units for the project.
In this connection, I invite your attention to a news report (https://www.ft.com/content/5d8e0c6c-59c9-4b40-806f-604889dd5fb6) which indicates that Westinghouse’s 1,100-megawatt Vogtle unit 3, which was initially supposed to be commissioned in 2016, has since come into operation now, after a delay of seven years. "Its start of operations was delayed once more in June after the company discovered a degraded seal in its main generator.....Along the way the company kept ratcheting up the cost estimates, pushing back the deadlines a bit at a time. Every time it was raised just enough where it was still within the bounds of justification that it made sense to proceed. But they were wildly off in their estimates every single time...The $14bn original cost of Vogtle units 3 and 4 has now ballooned to more than $30bn"
According to the above report, the Institute for Energy Economics and Financial Analysis observed, "The
only reason there’s a nuclear renaissance is because the federal government is throwing tens of billions of dollars at nuclear.....Investors aren’t interested.”
This report raises serious concerns about the prudence on the part of DAE in going ahead with the import of Westinghouse’s six 1,100 MWe reactors of a similar design for the proposed Kovvada power project. Apparently, there were significant technical issues encountered in the case of the Vogtle units. In addition, the cost of the Vogtle units escalated to twice the original estimated cost.
Importing reactors from Westinghouse, without following a transparent competitive bidding procedure as is the case with Kovvada, can result in highly inflated costs, more so in rupee terms. It will be further compounded by huge cost escalations and implementation delays, as evident in the case of the Vogtle units in the USA. The bilateral agreement signed by India with the USA envisages even Uranium fuel for the project to be supplied by Westinghouse. A 100% dependence on imported Uranium fuel will subject the fuel price to dollar-rupee exchange variation, which in turn will adversely impact the recurring costs of electricity generation from Kovvada. In addition, uranium prices in the global markets are also likely to escalate as a result of monopolistic manipulation by fuel suppliers. In effect, as and when the Kovvada project gets complete, maybe decades later, its costs are going to be astronomically high, which the consumers will not be able to absorb. If such expensive electricity from Kovvada is to be subsidised, the burden on the taxpayers is going to be heavy.
The Kovvada nuclear power project will have 6X1100 MWe reactors in one place, enhancing accident risks in a compounded manner. Post-Fukushima, the DAE introduced a Bill to create an independent nuclear regulatory authority to replace the existing Atomic Energy Regulatory Board (AERB) which functions under DAE’s administrative control. The concerned Parliamentary Committee examined the Bill in 2012 and made several far-reaching recommendations to improve upon it. More than a decade has elapsed since then and the DAE is yet to reformulate the Bill for Parliament’s approval. Such an inordinate delay raises concerns about the DAE’s seriousness about having a truly independent regulation of nuclear power projects in the country.
The disastrous Fukushima accident has revealed to the world how heavy such accident liabilities could be and how expensive it could be to decommission accident-stricken reactors and clean up the site. The existing legislation on civil nuclear liability in India exempts the reactor supplier from assuming responsibility for accident liabilities to a very large extent, which in turn implies a huge cost burden to be borne by the taxpayers.
Against this background, would it be prudent on the part of DAE to continue with the idea of setting up such a large nuclear power project complex in Kovvada?
While NPCIL may take decades to operationalise the Westinghouse reactors in Kovvada, it is ironic that NPCIL has already appropriated a large tract of lush green agricultural land for the project, uprooting hundreds of families, without any tangible benefits in return. On the other hand, the Kovvada project seems to be providing much-needed life support to a financially threatened US company, creating employment opportunities in the USA!
An independent evaluation of NPCIL’s Kovvada project may be urgently called for to assess the project’s costs and benefits.
Regards,
Yours sincerely,
E A S Sarma
Visakhapatnam
1-8-2023
