Nuclear Energy

matters of negotiations”. cdxliii Meaning, that the government has agreed to buy the reactor, without
finalising the price! Clearly, the government has something big to hide. Let us take a closer look at
the Areva deal.
Newsreports have estimated the cost of the two reactors to be about 7.0 billion euros (9.3
billion dollars).cdxliv However, this seems to be a big underestimate. The contract price of the 1600
MW EPR being constructed in Finland was €3.2bn when the agreement was signed in December
2003; as in June 2010, its cost had escalated to around 5.9 billion euros, and the reactor was only
halfway to completion.cdxlv Obviously, the final cost is going to be much more. Even assuming
that each Jaitapur reactor is going to cost this much, that is 5.9 billion euros, then, taking the current
Euro-Rupee exchange rate as in January 2011 of Rs. 59 = 1 euro, this means each reactor should
cost at the minimum Rs. 34,800 crores! That works out to a whopping Rs. 21 crores per megawatt
(MW), as compared to Rs. 5 crores per MW for coal-fired plants!!
The total installed capacity of the Jaitapur plant when all six reactors are constructed is
going to be 9900 MW. At Rs. 21 cr/MW, this means the plant is going to cost a mind-boggling Rs.
2 lakh crores! The cost of an equivalent coal-fired plant would be just Rs. 50,000 crores, implying a
saving of Rs. 1.5 lakh crores!!
Given this huge capital cost, what will be the unit cost of electricity from the plant? No one,
right from the Prime Minister to the Chairperson of NPCIL, is willing to discuss it. Areva's CEO,
Anne Lauvergeon, in an interview to The Hindu on November 25, 2010, asserted that it would
definitely be below Rs. 4 a unit!cdxlvi This is obviously ludicrous. More realistic estimates put the
cost of electricity from the Jaitapur nuclear plant at least Rs. 7-9 per unit: Prabir Purkayastha, the
well-known power sector analyst, estimates the cost of electricity assuming the plant is going to
cost Rs. 20 cr/MW to be Rs. 7-8 per unitcdxlvii; Dr. Vivek Monteiro, a well known physicist who
holds a doctorate from Harvard University, estimates that the cost would be at least Rs. 9 a
cdxlviii; Gopal Krishna, a member of Toxicswatch Alliance, also estimates it at Rs. 9 a unit.cdxlix
unit
Of course, these cost estimates do not take into account the subsidies to nuclear power
discussed above, like decommissioning costs, waste management costs, etc.
Clearly, the cost of electricity from the imported reactors is going to be even greater than
that from Enron's Dabhol Power Plant in Maharashtra, which made MSEB virtually bankrupt. If
the government succeeds in its plans of setting up a string of nuclear parks along the coast, India is
going to be saddled with dozens of nuclear Enrons.
Nuclear Liability Bill: Indemnifying Foreign Suppliers
The costs of nuclear electricity are so huge, that the foreign vendors are still not satisfied
with these subsidies. American reactor suppliers like General Electric and Westinghouse grunted
that they will not invest until India gives them a sovereign guarantee that the entire liability of any
potential catastrophe is borne solely by Indians, in other words, that they will not be held liable
for any accident at the plants supplied by them – they are aware that it could bankrupt them. And
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