Domestic nuclear power program and how India lost its plot.

Thanks to Dr. Homi Bhabha, a brilliant nuclear physicist and an outstanding leader who died prematurely in an air crash near Mont Blanc (the French Alps) on 24th January 1966, India had a head-start in the sixties in employing nuclear fission energy for power generation. At this period in the evolution of global atomic energy, only a few countries in Europe, Russia and North America were able to use nuclear energy for power generation and that too on a very modest scale. On 29th October 1969, a 2×210 MW capacity nuclear power plant at Tarapur in Maharashtra began supplying power to the grid of Maharashtra and Gujarat states. With this development, India joined the small select club of countries such as USA, Canada, UK, France and Russia that were operating nuclear plants to supply electricity for consumption of electricity by common man. The two units at Tarapur were installed by GE & Bechtel on turnkey basis, with 200 million USD provided by USAID at a low interest rate and 30 year loan term. These two units at Tarapur are still in operation and supply electricity at a tariff of less than 1 rupee per Kwhr to Western Grid.

India has consistently added a few thousands MW of power generation capacity from coal, hydro, diesel, and wind energy sources each successive year. But the addition of nuclear power capacity has not kept pace with the contribution from these commercial sources of power. The total generation capacity of India has rapidly climbed from 6,000 MW in 1970 to 2,90,000 MW in December 2015. However, nuclear power generation capacity increased from 440 MW to only about 5,780 MW in the same time period. The share of nuclear power in Indian context was quite significant in the seventies but with the passage of time, it has practically paled into insignificance.

India’s domestic nuclear power program, based on indigenously built pressurized heavy water reactors (PHWRs), has been designed, developed, constructed and operated by the Government of India (GOI) through the Department of Atomic Energy (DAE) and its public sector arm Nuclear Power Corporation India Limited (NPCIL). The critical question is whether, over the past 45 years, we have really learnt to build these plants in a professional manner within the prescribed time schedule and estimated costs. I am afraid the answer even after having decades of experience of building PHWR type Nuclear Power Plants (NPPs) with indigenous industrial manufacturing capacities, private companies’ supplies and technical services support is indeed negative. 

To elaborate the point, consider that 17 out of the 19 PHWRs were built way beyond approved budgeted costs and scheduled time frames. Let us recall that 2×220 MW Narora units were sanctioned by GOI at an estimated cost of INR 210 crores. Narora atomic power plant (NAPP) was eventually completed at the total cost of about INR 800 crores. Kakarapar unit 1&2 were originally estimated to cost INR 383 crores and by the time these units were completed the cost had escalated to INR 1400 crores. Similarly, Kaiga units 1&2 located in Karnataka state were originally estimated to cost INR 699 crores, and RAPP 5&6 located at Kota in Rajasthan state were estimated to cost INR 700 crores. The completed costs were about INR 2200 crores for Kaiga and more than INR 2200 crores for RAPP.  

The story is the same if we look at scheduled time frames. NAPP was approved in 1972 and it was connected to the northern grid in 1992 (gestation period of 20 years). The two units of Kakrapar 1&2 were sanctioned in 1980 and went into commercial operation in 1995 (gestation period of 15 years).  Kaiga units 1&2 were sanctioned in 1985 and connected to the southern grid in the year 2000 (gestation period of 15 years). Rajasthan unit 3&4 were sanctioned in 1985-86 and connected to the western grid after completion in the year 2000 (gestation period of 15 years).

Even after 4 decades of experience under the NPCIL belt, things haven’t changed for better. Consider the latest examples of two units each of 700 MW capacity PHWRs to be built at Kota in Rajasthan (RAPP 7&8) and at Kakrapar (KAPP 3&4) in Gujarat state.  While these units are under construction for past 3-4 years, both these projects are already delayed by over three years each beyond the original time schedule.  The latest in this series of 700 MW PHWR type reactors, the Gorakhpur-Haryana Anu Vidyut Priyogana (GHAVP), has a similar story.  GOI gave administrative and financial sanction to GHAVP in Feb 2014. This project is already delayed as no orders have been placed till date for the power plant equipment, components and civil works. After placement of civil works order, it will take about one more year to reach ‘First Pour of Concrete (FPC)’ milestone for GHAVP. In the approved schedule of GHAVP, the FPC was scheduled in June 2015. There are endless slips in each of the under – construction projects at RAPP, KAPP, GHAVP and these projects are going to mimic cost and gestation period history of their predecessors at Kaiga, Narora and Rajasthan. This is classic case of ‘those who do not learn from history are condemned to repeat it’. 

The first unit of GHAVP was scheduled to be completed in 63 months and the second unit in 69 months, in order to supply power to the grid by September 2020 and March 2021 respectively. In the Parliament reply given in December 2015, GOI has stated that the work will start only in early 2016. This is already an admission of delay by two years in project activities startup. Without the Civil Liability issue being settled and Indian Nuclear Insurance Pool (INIP) agreement with NPCIL and with the suppliers, no orders could possibly be placed on domestic and international suppliers for any hardware and services for GHAVP.  No clear commitment of date is available to close the INIP and Civil Liability for Nuclear Damages for Gorakhpur nuclear power plant. How much this plant would be further delayed in addition to the 2 years delay that has already taken place is anybody’s guess.

There is going to be substantial financial penalties for such delays in implementing GHAVP. GOI is paying for 30% of the project cost as equity from its budget. The capital expense required to complete the 2×700 MW capacity GHAVP plant, including Interest During Construction (IDC), was fixed with reference to the starting year 2014. We are now in Jan 2016 and no orders for equipment’s and components have been placed by NPCIL for GHAVP. The original estimate to complete GHAVP was INR 21,000 crores. As per my estimate, for 3 years delay the project cost would have to be revised upwards by about 21%.  The revised cost for GHAVP should be INR 25,000 crores for 1400 MW capacity power plant, i.e., INR 17.8 crores per MW. Given the track record of NPCIL in completing the nuclear power projects, it is unlikely that GHAVP would finish even at this revised estimated price. The often touted cost of generation from GHAVP in public domain @ INR 6.5 per unit in 2020 would most likely be revised to INR 7.5 by the time it is completed, provided the delay in restricted to just 3 years.  Should further delays occur, GHAVP cost of generation to be supplied to the gird may reach INR 8 per unit.

 It is clear that domestic nuclear capacity addition is too little too late. These PHWR type domestic nuclear power plants of 220 MW and 700 MW unit size are always inordinately delayed, costs are doubling or trebling from that of original estimates and time lines to complete them range between 10-15 years. The mandarins of nuclear power program in India have not been able to master the art of implementing program on commercial lines and decades have gone by hoping that the situation would improve. There are no evidences available that could promote positive changes and hence in the overall scheme of things in Indian power sector, the domestic nuclear power program has lost its plot.

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