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Home News Power Sector News Kudankulam power cheaper than U.S. proposals: Russia

Kudankulam power cheaper than U.S. proposals: Russia

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KudankulamA week after U.S. President Barack Obama's visit cleared major hurdles in the Indo-U.S. nuclear deal, Russian officials say the power generated under the agreements will be much more expensive than the negotiated deals with Russia for the "Kudankulam series."

An official statement from the Russian Embassy said the rates for electricity from units 1&2 of the Kudankulam Nuclear Power Plant, being constructed with Russian technical assistance (in Tamil Nadu), were almost half the price that power from proposed American designs would cost. According to unconfirmed reports, U.S. company Westinghouse has proposed Rs.6 per kWh in initial discussions with India, while French company Areva had spoken of Rs.6.50 per kWh, both of which would be far higher than the estimated price of power at Kudankulam 1&2 at Rs.3.50 per kWh. Added to this is the projected raised costing for insurance after India agreed to set up a $240-million (Rs. 1,500 crore) "insurance pool" to be funded equally by state-owned insurance companies and the government.

Significantly, the statement was issued on a day External Affairs Minister Sushma Swaraj met Russian Foreign Minister Sergei Lavrov at the RIC trilateral in Beijing. Indian government officials called the Russian statements premature. The costs in both the cases of U.S. and France "are still to be worked out," they told The Hindu.

However, the costing of U.S. nuclear companies is becoming the next big issue, even as India and the U.S. overcame the major hurdles of supplier's liability and administrative arrangements. In a letter to Prime Minister Narendra Modi this week, CPI leader D. Raja pointed out that the cost of U.S. reactors and the insurance pool could result in the rate exceeding Rs.15 per kWh. "This is much higher than the tariff from competing sources," wrote Mr. Raja. "I am concerned that the government has not adequately examined the cost of electricity from the proposed American reactors."

The Russian statement quoting nuclear officials indicates that Moscow is unhappy, and feels competitive about the spotlight on the U.S.-India deal, even as Russian President Vladimir Putin had in December signed a strategic agreement for constructing 12 new nuclear power units.

The Indo-U.S. deal announced by Mr. Obama and Prime Minister Narendra Modi was welcomed last week by Westinghouse CEO Daniel Roderick, who called it a "breakthrough." The deal hinges on a "memorandum" to be submitted by the Indian government to the U.S. that will outline the Indian understanding of the clauses that the U.S. nuclear suppliers find problematic.

Sources told The Hindu that the memorandum would be shared with U.S. officials "this week."

Russian nuclear officials, however, made unfavourable comparisons between their negotiations for nuclear reactors that began in 1988 and the proposed American deals.

"The Russian side had offered the Indian government credit for the construction of the new Kudankulam 3&4 plants with similar terms as for the construction of Kudankulam 1&2, regardless of the fact that 30 years had passed since the agreement on the first unit," they said. They also pointed out that the Kudankulam reactor now operational "meets the latest safety requirements." It was connected to the national grid in 2013 and the next one was due to be commissioned shortly.

Source- The Hindu

 

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