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Delay impact: Gujarat seeks tariff cut for power from Kakrapar N-units

Anupam Chatterjee

With delays in project construction raising the tariff of electricity generated from the upcoming nuclear power generation units in Kakrapar, the Gujarat government has sought the Union power ministry’s intervention to reduce its cost burden. The Nuclear Power Corporation of India (NPCIL), which is developing the units, recently communicated to the state that the project’s cost overrun had increased the estimated tariff for the power station to around Rs 5.31/unit, up from the Rs 3.34/unit rate when the host state had sought power allocation.

According to sources, Saurabh Patel, Gujarat energy minister, has requested power minister R K Singh to take up this matter with the department of atomic energy and restructure the tariff to around Rs 3.34/unit. The average price at which the state bought non-renewable based power in FY19 was Rs 3.98/unit. Since NPCIL projects have the ‘must run’ status, the landed cost of around Rs 6/unit looks unsustainable for the state, state officials pointed.

Two nuclear power generation units of 220 MW each are already operational in Kakrapar. Tariffs have increased for two upcoming 700 MW units. The sanctioned cost of the project is Rs 11,459 crore.

These are the first nuclear power generation units being built with the indigenous pressurised heavy water reactor (PHWR) technology. Being the first of its kind infrastructure, the manufacturing of critical equipment such as steam generators, diesel generators, reactor component and their inspection has added to the delay in supply of these equipment as there are limited qualified vendors in India for manufacturing of nuclear grade reactor equipment and components.

Further, delays in statutory clearances from the atomic energy regulatory board, chief controller of explosive, Gujarat pollution control board and ministry of environment and forest also contributed to the cost overrun.

According to sources, the reactor of the first upcoming unit would start sustained fission chain reaction by the end of FY19. Currently, average tariff of power from existing nuclear plants is Rs 3.41/unit.