Tata Power eyeing $3 bn nuclear power foray (Interview)

August 15th, 2008 - 12:58 pm ICT by IANS  

By Arjun Sen
New Delhi, Aug 15 (IANS) With India’s nuclear isolation likely to end soon, energy major Tata Power is busy planning and studying a minimum $3 billion (Rs.120 billion) foray into nuclear power. “Tata Power will initially venture into nuclear power either on its own or through a joint venture once the sector is opened up to private utilities,” said Sharaf Ali Bohra, advisor for Tata Power.

“In the long-term, Tata Power would also like to go into the business of front-end and back-end fuel cycle technology business,” Bohra told IANS in an interview.

“It is too early to discuss actual figures. We are studying not only various technologies, regulatory and policy scenarios but business models as well,” he said, adding the actual investment will depend on several issues - technology, fuel policy and the question of nuclear liability.

At present, four major technologies are available for nuclear power using enriched uranium. India also has an indigenous technology using natural uranium, as it does not have the sanction to import enriched uranium.

The India-US nuclear deal is necessary to allow the inflow of technologies and fuel. This apart, the Atomic Energy Act, 1962, also has to be amended so that joint ventures can be formed with the state-run Nuclear Power Corp.

Industry lobbies like the Associated Chamber of Commerce and Industry of India(Assocham) feel that the amendment can result in India generating some 20,000 MW of nuclear power by 2020, even if the nuclear deal fails to go through.

Bohra said General Electric of the US has developed an economical simplified boiling water reactor with a capacity of 1,500 MW per unit. Two such units will cost anywhere between $2.75 and 3.25 billion.

Mitsubishi of Japan also has an advanced pressurised water reactor technology with a capacity of 1,700 MW per unit, while Areva of France has developed what is called the European pressurised reactor technology, also of similar capacity.

The capital cost of both these technologies of 3,400 MW will be the same as that of the GE technology, Bohra said. Westinghouse of the US also has its advanced pressurised water reactor technology of 1,100 MW per unit capacity, costing $3.5-4 billion for two units.

“So the minimum investment for us will be at least $3 billion. We will go in for at least two units having a total capacity of 2,200-3,400 MW.”

The cost of generation too will be competitive vis-à-vis thermal power, Bohra said. He expected the cost to be around Rs.2.5-3 kilo-watt-hour, which would be competitive when compared with thermal power plants using imported coal.

“Nuclear Power Corp is making money and we will also do so since there are other factors that will ensure profitability. For one, India will continue to see a huge demand for energy,” he said.

“We can always sell part of the nuclear power at as much as Rs.8 per kilo-watt-hour since the power purchase pacts with the government always allows some part of the generation to be sold privately outside the agreed price framework.”

The $62.5 billion Tata group, which has interests in sectors spanning consumer durables and software to energy, steel and automobiles, has 27 listed companies in its fold, employing some 350,000 people worldwide.

(Arjun Sen can be reached at arjun.s@ians.in)

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