Jaitapur nuclear project: Renewed push, amid lingering concernshttps://indianexpress.com/article/business/business-others/jaitapur-nuclear-project-renewed-push-amid-lingering-concerns/

Jaitapur nuclear project: Renewed push, amid lingering concerns

Festering question marks over the EPR’s robustness and added worries of cost-related viability of new projects based on this technology are areas of concern

Jaitapur nuclear project, India nuclear project, india nuke project, india news
There are two concerns — festering question marks about the EPR’s robustness and worries regarding the cost viability of new projects based on the French reactor technology.

The decks may have been cleared for what would be the world’s largest nuclear power generating station by net electrical power rating, with an early-2017 target being set for the commencement of work on the 9,900 MWe (mega watt electrical) Jaitapur nuclear project proposed to be set up on the Arabian sea coast in Maharashtra’s Ratnagiri district.

The scale and the scope of the projects have been vastly broadened and entails the construction of six nuclear power reactor units by French nuclear major Areva, as against two units initialled earlier. The conclusion of techno-commercial negotiations for these six units, which takes forward the 2008 nuclear cooperation deal between India and France, is now being aimed for the end of 2016, according to the new pact signed by both sides earlier this week.

But there are two concerns — festering question marks about the EPR’s robustness and worries regarding the cost viability of new projects based on the French reactor technology.

Let’s take the safety concerns first. There is no denying the fact that France is synonymous with nuclear power, with 78 per cent of its electricity generated by the atom, making it the most nuclear-dependent country in the world. Its state-owned firm Électricité de France SA is the world’s largest nuclear utility while state-owned counterpart Areva is one of the largest nuclear reactor manufacturers. Currently, though, Areva is facing serious regulatory fire over weak spots in the steel of its EPR (formerly called European Pressurised Reactor) reactor it is building for EDF at the Flamanville site in France, according to findings released by French nuclear regulator ASN (Autorité de Sûreté Nucléaire) in June 2015. ASN had said Areva had informed it that tests done at the end of 2014 had shown that in certain zones of the reactor vessel and the cover of the EPR, there was a significant concentration of carbon, which weakened mechanical resilience of the steel and its ability to resist the spreading of cracks.

Advertising

In October, ASN, according to a Reuters report, had said it would rule “soon” on Areva’s plans for dealing with weak spots in the EPR in Flamanville. ASN has now reportedly pushed back a final decision on the safety aspect of the project in France until the end of 2016, something that holds the key to what needs to be done about the weak spots in the vessel of new-generation EPR-based project.

The delay in the decision has two broad implications for India — one that the extent of course-correction that Areva needs to make on its reactors is not known. Second is that pushing back the decision could lead to further delays. EDF —which is now taking over Areva’s nuclear operations, with the latter practically bankrupt after a string of yearly losses wiped out its capital and EDF reported to be hard pressed to generate funds for the takeover —had said in September that Flamanville would not be operational before 2018 and would cost Euro 10.5 bn (around $11.5 bn), up from an initial budget of Euro 3 bn. If ASN were to direct Areva to replace the reactor vessel or lid because of the weak spots, the Flamanville project could face further delays and sharp cost overruns.

In case of Jaitapur, the progress has been marginal. There is some progress on a crucial Pre-Engineering Agreement signed in April last year between state-owned Nuclear Power Corp (NPCIL) and Areva, which has set the ball rolling on the detailed safety assessment for the proposed project. It has also set the stage for commencing the licensing process for the French EPR reactor-based project with India’s nuclear regulator — the Atomic Energy Regulatory Board.

Even before the Flamanville problems, each of Areva’s EPR — a new-generation pressurised water reactor built to resist the impact of a commercial airline crash — comprising a 1,650 MWe reactor unit, has been facing criticism for being too big and too expensive. Areva had been forced to book billions of euros in provisions due to cost overruns at the three sites globally where it is setting up EPR-based projects. For the proposed project at Jaitapur, after the signing of General Framework Agreement (GFA) and Early Works Agreements (EWA) in 2010, discussions were held with Areva on various technical, safety and commercial aspects to arrive at a viable proposal. In parallel, pre-project activities like land acquisition, rehabilitation and resettlement (R&R), technology independent site investigations, infrastructure development at site, and public awareness activities are being carried out at the site. “The Pre-Engineering Agreement or PEA signed between NPCIL and Areva on April 10 (2015) will help bring clarity on the technical aspects of the plant, help make a detailed safety assessment and take up the licensing process with Atomic Energy Regulatory Board,” a government official involved in the exercise said. An MoU was also signed between L&T and Areva aimed at maximising the localisation of critical components for the proposed project at Jaitapur, which marks a desperate attempt to prune the cost of each of the six 1,650 MWe reactors to be deployed at the site in Maharashtra to about $4 billion. This is expected to translate into a targeted generation cost equivalent of about Rs 7 per unit. The meeting of this price cap imposed by the government during the ongoing technical negotiations, officials said, holds the key to the viability of the Jaitapur project, especially in light of Areva’s chequered track record at implementing EPR reactor-based projects elsewhere in the world.

The joint statement signed between India and France on Monday seeks to address the economic viability issue by emphasising on the “cost-effective localisation of manufacturing in India for large and critical components” in accordance with the NDA government’s “Make-in-India” initiative, for which the April 2015 pact between Areva and L&T for localisation of components for the Jaitapur project is being cited as a crucial step in the direction of bringing down costs of the EPR-based projects in India.

Apart from Flamanville, Areva’s EPRs are being deployed at another site in Europe — in Olkiluoto, Finland, apart from two units being built in Taishan, China and plans to build two more unit at Hinkley Point in the UK.

Like the French project, the construction of the Finnish reactor being built at Olkiluoto since 2005 has repeatedly suffered serious delays and cost overruns. The reactor was planned for commissioning by 2009, but is still far from ready. Its cost has doubled and there are doubts on whether it will be ready even by the revised deadline of 2018. The targeted cost of $4 bn (approx Rs 25,000 crore) per reactor is roughly the same as the Areva offer to the Chinese for the two EPR reactors under construction at Taishan in China, which is believed to incorporate a local engineering joint venture to cap costs. The Flamanville EPR reactor is also having problems. Construction started in 2007 and it was supposed to generate power by 2012. It is now scheduled to start in 2016. The L&T deal signed last year is expected to get orders for making heavy and critical components such as pressure vessels and steam generators and these orders will be executed by L&T Special Steel and Heavy Forgings, a JV between L&T and the Nuclear Power Corporation of India. This venture has a manufacturing facility in Hazira, Surat. “Localisation is the only way to bring down cost, especially as the NPCIL has been driving a hard bargain on tariffs being capped at Rs 7 per unit (kWh),” an official involved in the exercise said.

In India, the cost benchmark for new imported light water reactors such as the EPR are derived broadly from the two Russian designed VVER-1000 reactors which are to be deployed at Kudankulam. The two new VVER reactor units (KKNPP 3 & 4) to be set up in Tamil Nadu, which would come up at the Kudankulam site where two identical units (KKNPP 1 & 2) are nearing commissioning, entail a sanctioned project cost of Rs 39,849 crore for the two new reactors.

WHAT THE ISSUE IS ABOUT

* Anomalies have been identified in the composition of the steel in certain parts of the reactor vessel of the EPR under construction at Flamanville, Areva had informed the French nuclear regulator ASN in end-2014.

* ASN said in June 2015 it had been informed that these test results “revealed the presence of a zone in which there was a high carbon concentration, leading to lower than expected mechanical toughness values”.

Advertising

* “Initial measurements confirmed the presence of this anomaly in the reactor vessel head and reactor vessel bottom head of the Flamanville EPR,” according to ASN. Both forged steel components were manufactured at Areva’s Chalon/Saint-Marcel plant.