NTPC to form JV with NPCIL for nuke foray

The board of NTPC, the country's largest power generator, has approved a proposal to form a joint venture company with Nuclear Power Corporation of India (NPCIL), the country's only nuclear power producer, enabling NTPC to diversify into the civilian nuclear energy.

The proposed joint venture company will be the first non-NPCIL nuclear power generation initiative in the country, following the Nuclear Suppliers' Group waiver. According to the proposal, the JV firm would initially set up a 2,000-MW nuclear power plant.

NPCIL will hold a majority stake of 51 per cent in the JV company, while NTPC will own the remaining stake.

“The investment to flow in the JV company will be dependent upon the cost of setting the power project, with a 70:30 debt-equity ratio. At least two reactors are planned to be installed under the project,” said NTPC Chairman and Managing Director R S Sharma.

Further details on the project will be finalised after the JV company is incorporated, Sharma added.

Last month, the 45-member NSG had given its nod to the India-specific waiver to drop a ban on nuclear commerce. Experts believe that the move has opened up a new window of nuclear commerce for India with other countries and will help the country meet its planned target of about 20,000 MWe (mega-watt equivalent) of nuclear power by 2020 and 36,000 MW by 2030.

“This is surely going to be the first non-pure NPCIL project and sends a positive signal for further developments. But it will be dependent upon the technology that the reactors use, whether it will be sourced from outside or is going to come from NPCIL,” said a senior analyst of an accounting and consultancy firm.

When asked whether the JV company is planning to buy nuclear reactors from overseas manufacturers, Sharma declined to comment.

But he said the JV firm would be formed by the end of the current year. Another executive of the company confirmed that the capacity of the nuclear power project will be about 2,000 to 3,000 MWe. “The power plant will have a capacity of 2,000 MW, which can go up to 3,000 MW, depending upon the capacity that is finalised for the two individual reactors,” he said. The executive also added that the two rectors to be set up will be light-water reactors (LWRs).

At present, only the state-owned NPCIL produces nuclear power in India. It has an installed capacity of 4,020 MWe and produced 16,930 million units of electricity in 2007-2008.

The current average cost of building a nuclear plant is between Rs 7 crore and Rs 8 crore per MW, which means a 2,000-MW plant would require an investment between Rs 14,000 crore and Rs 16,000 crore, around 33 per cent higher than a thermal plant with a similar size.