Alok Kumar, Director, The Lantau Group
The nuclear energy establishment in India and the private sector within India and abroad are excited about the new target of 100 GW of nuclear-based electricity generation capacity by 2047. In fact, this is very timely if India is to achieve Net Zero by 2070, because neither gas-based nor hydroelectric generation can significantly replace coal as a baseload generation source for India. Carbon capture, utilisation and storage (CCUS) technology is still at the development stage, and faces far larger challenges than those involved in ramping up nuclear-based generation.
Nuclear Power Corporation of India (NPCIL) has already announced its goal of achieving a cumulative capacity of more than 50 GW by 2047, and is busy locating new sites for its plants in addition to planned brownfield expansion at its existing power plants. The fleet mode construction of 700 MW units has been proposed to be extended beyond the ten units already under development, and can be a game changer in terms of cost reduction and a more certain and shorter execution period from the “first pour of concrete”. NTPC has also announced plans for joint ventures with NPCIL as well as a wholly owned subsidiary. However, the real challenge lies in overcoming the uncertainties, particularly local opposition, in pre-execution survey and investigation at the identified sites. This initial project development phase (before the first pour of concrete) has been leading to an uncertain and extended execution period. On the other hand, India’s continuously growing electricity demand cannot brook any delay in setting up new capacities. To address this challenge, there is an urgent need to closely work with the states (perhaps by making them a joint owner of the projects) and to create more intense awareness about the country’s excellent safety record in operating nuclear reactors.
Another major task involved in this targeted expansion of India’s nuclear capacity is ensuring the reorientation of our highly talented nuclear scientists and technologists to the reality that as the share of nuclear-based capacity grows, they have to pay larger attention to the fact that nuclear-based electricity not only needs to be generated but also despatched in the grid and sold according to the needs of the power system and electricity consumers. As we approach an 80 per cent share of variable renewable-based capacity by 2047, nuclear plant operations will need to be flexible if it is to replace coal as source for baseload generation. Flexibility may come from ramping up and down to the extent of international best practices, or through the use of surplus electricity/heat for other purposes such as industry or hydrogen production. All such modifications in the design and operations of reactors should not significantly add to costs. This brings us to the other major challenge of ensuring that nuclear-based electricity stays cost-competitive with other sources such as solar plus storage, or coal with CCUS. Presently, the average sale price (as published by the Central Electricity Authority) of nuclear-based electricity is about 20 per cent less than that of thermal power plants. But it is set to rise rapidly as we add a larger number of new units. We have seen this in case of transmission expansion, as well as in case of states such as Bihar, which has signed power purchase agreements (PPAs) with several newly established coal plants. Therefore, the thrust has to be on compressing the construction period so that the share of interest during construction in the capital cost is minimised. Streamlining of regulatory processes is also important to achieve this objective.
Our local industrial units have contributed immensely to our ability to achieve nearly 100 per cent indigenisation of 700 MW nuclear units. They have achieved high quality standards, and many of them are also exporting. These industries are ready to expand their capacities quickly if we can provide them clear visibility of an order pipeline through the sustained expansion of fleet mode execution and the placement of bulk orders. The industry also wants a streamlining of inspection processes by NPCIL during manufacturing, which could potentially reduce delivery time without compromising on quality.
Achieving 100 GW by 2047 will require substantial contribution from the private sector. This has been fully recognised by the Government. The recent Budget has announced legislative amendments to facilitate this. NPCIL has also floated a request for proposals to set up two 220 MW units in large industrial units in captive mode. Several developers have requested clarity on three aspects to ensure the bankability of the investments. Of foremost importance is an assurance of a reasonable completion cost so that the electricity generated remains cost effective for captive consumption or sale to bulk consumers/discoms. The second concern is the fuel supply risk, with the whole supply chain being controlled by the public sector. Who will take on the fuel availability risk in PPAs? Thirdly, the industry would like to have a choice in size of units to be installed. A 540 MW unit may lead to better economics.
Last, but not the least, setting up large capacities for operation based on imported uranium raises a serious concern from the national energy security perspective. As we have seen in the last few years, changing geopolitics may drastically impact the supply of fuel. Therefore, a well thought out strategy must be put in place in terms of acquisition of foreign mines or building up a strategic fuel reserve.