MUMBAI, December 3, 2013
Working to reduce project cost: Areva
Lalatendu Mishra
To lower the cost and make it competitive, Areva has decided for local sourcing and assembling of part of the plant
French nuclear energy conglomerate Areva SA, which is the technology provider for the proposed nuclear power plant at Jaitapur in Maharashtra, said it was working with Nuclear Energy Corporation of India (NPCIL) and Department of Atomic Energy (DAE) to bring down the cost of the project so that power could be supplied at cheaper rates.
The delay in the execution of the project and devaluation of the rupee has resulted in cost escalation, and Areva said it would work on different parameters to make nuclear power affordable in India.
“We are negotiating for this project for some time. Now we are talking (with NPCIL and DAE) to get an agreement on price for at least the first two reactors (of this nearly 10 GW power plant),” Tarik Choho, Chief Commercial Executive Officer, Areva SA told The Hindu.
“In 2010 when the agreement was signed to make this project viable the cost of power from this plant was estimated at Rs.4 per kilowatt hour. That time the investment parameter was different. We have improved that offer by commercial efforts. Now that the cost has gone up we are trying to understand the calculation and will be working on different parameters to lower the cost,” Mr. Choho who is currently visiting India to meet NPCIL officials said.
As per latest calculation the cost of power to be generated from the Jaitapur plant has gone up to Rs.9 per kilowatt hour and NPCIL plans to bring down this cost to Rs.6.5 per kilowatt hour.
To lower the cost and make it competitive, Areva has decided for local sourcing and assembling of part of the plant. Areva’s inputs to the plant would be to the extent of 40 per cent.
“We want to make sure that our part is competitive, safe and the project is viable,” he added.
The plant was scheduled for commissioning in 2017 and with the delay in land acquisition if work starts now, it would be operational in 2021.
Areva which has already has an order backlog of 45 billion Euros said it would have a larger play in India by supplying nuclear reactors and uranium to this market.
India already has 20 operational nuclear reactors and Areva is eyeing nuclear fuel supply order from these reactors.
Besides, Areva is executing 125 mw compressed solar plant for Reliance Power in Rajasthan and expecting more orders from Reliance and other power producers.
Bio-mass energy unit
Mr. Cheho said the company's bio-mass energy unit at Chennai, which has already executed five projects in India, was doing a pioneering job and helping Areva to cater to the Southeast Asian markets by supplying technology from here.
Three bio mass power plants are being set up at Thailand and Philippines by the Avera India team from Chennai, he added. These plants use rice husk as fuel to generate energy.
NEW DELHI, February 15, 2013
Updated: February 15, 2013 02:03 IST
Pact with Areva not in India’s interest: Karat
Prakash Karat.
It will not be in the interest of our country to sign the pact
The National Committee in Solidarity with Jaitapur Struggle has asked the government not to sign any agreement with French company Areva on supply of an EPR reactor for the Jaitapur nuclear power plant during the two-day visit of French President Francois Hollande to India that began on Thursday.
“Given the range of issues with the Jaitapur project, it would not be in the interest of our country to sign any agreement with Areva on the EPR reactor. The Jaitapur plant must be subjected to public scrutiny, both on techno-economic grounds and on questions of safety before any decision is taken,’’ Prakash Karat, member of the committee and general secretary of the CPI(M), told journalists here on Wednesday.
The committee opposes the setting up of nuclear plants with costly imported reactors and believes that without a thorough safety review and detailed techno-economic analysis of the nuclear energy programme, no expansion must be undertaken.
The members of the committee besides Mr. Karat are: A. Gopalakrishnan, former chairperson of the Atomic Energy Regulatory Board; CPI leaders A.B. Bardhan and D. Raja; Lok Jan Shakti Party leader Ram Vilas Paswan; CPI(M) leader Sitaram Yechury and Prabir Purkayastha.
“The Jaitapur project is being pushed against the will of the people of the region. Any nuclear plant has to work with the people of the areas if it has to operate safely. It must also work out safety drills and evacuation procedures in the case of an accident. All this requires taking the local people into confidence, and not suppressing them with full force of the state as is being done currently,” the committee said.
“Post Fukushima, France’s Nuclear Safety Regulatory Authority (ASN) has completed a thorough re-assessment of Areva’s EPR reactor, one of which France is building in Flamanville. As a result, several substantial modifications to its hardware and subsystems, as well as design and safety re-analyses, have been mandated by the ASN. Based on Flamanville costs, the phase-1 capital cost of the Jaitapur Nuclear Power Plant (JNPP) would be of the order of Rs. 1,20,000 crore for 2 reactors, with a capacity of 3,300 MW. With this amount of investment, India can install more than 20,000 MW of coal fired plants,” the committee said.
Dr. Gopalkrishnan quoted a study by the Indian Institute of Astrophysics in Bangalore, published in the Current Science journal of the Indian Academy of Sciences last year, that raised serious doubts about the prudence of setting up six 1,650 MW nuclear reactors at this site.
Mr. Raja said the nuclear plant would be situated in a seismic zone, and raised serious doubts over safety.
NEW DELHI, December 18, 2012
Updated: December 18, 2012 03:40 IST
Areva closes in on key agreement for Jaitapur plant
Sandeep Dikshit
PTI A file photo of the site of the proposed Jaitapur nuclear plant in Ratnagiri district of Maharashtra.
Unperturbed by protests against its proposed nuclear power plant in Jaitapur, Maharashtra, the French civil nuclear energy major Areva is now in the closing stages of striking an “early works agreement” with Nuclear Power Corporation of India Limited.
This agreement, which is actually a series of studies to ensure that the reactor is in conformity with local conditions, is likely to take nine months. “Areva’s discussions with NPCIL are on. We hope to achieve closure as soon as possible. We are eager to start [on the studies] so as to fully define the project,” said diplomatic sources.
They drew attention to French Ambassador Francois Richier’s observations at a recent Indo-French nuclear seminar. “I hope the discussions will be completed soon,” he had said, which would make the Jaitapur project “the first to come up since the 2008 Nuclear Suppliers Group exemption to India.”
While Kudankulam I and II will be the first mega units to come up in India, the agreement with Russia [then Soviet Union] was signed over two decades ago and negotiations over the next two units are deadlocked over the Nuclear Liability Act. Similarly, the American bid to set up nuclear plants in Gujarat and Andhra Pradesh is also held up.
Commenting on the Act, which has been opposed by all companies vying for business in India because of a clause that puts the onus of an accident on suppliers, the sources said Areva’s basic principle was to abide by the law of the land and at the same time ensure that the company’s interests were protected. But as the Rules have not entered into force, there is uncertainty about how it will all end up. In addition, the Supreme Court is hearing a petition on safety in civil nuclear plants. “But this question is not for us to solve,” they said.
Protests
The second issue facing the French company are mass protests in and around Jaitapur that has led to the loss of a life in police firing. Unlike the Russians, who suspected a foreign hand in protests at their site in Kudankulam, the French are taking the protests at Jaitapur in their stride.
“It is the beauty of democracy that all are allowed to demonstrate. France had such demonstrations for long and one good effect was it obliged the industry and the government to take care of safety concerns and also accept transparency. This approach helped the French to accept nuclear energy without fears. Today France has 60 reactors or one reactor for every 10 lakh people. Demonstrations are legitimate and we will try to address their safety related concerns,” the sources said.
The third stumbling block after the Limited Nuclear Liability Act and the protests is the absence of an India-Japan civil nuclear cooperation agreement. This will make it next to impossible to source crucial parts for the reactor vessel made by the Japan Steel Works.
Indian officials expect Areva to approach South Korea with which India has a civil nuclear agreement. According to South Korean diplomats, Areva and Korean Electric Power Company (Kepco) have worked together in the past, but have also competed against each other for a major United Arab Emirates tender, which was won by Seoul.
Kepco’s stand
At the same time, it remains to be seen whether Kepco will be content with supplying a few parts for the reactor, when South Korea feels that after signing the civil nuclear agreement with India [after just three meetings], New Delhi might award it a nuclear reactor park of its own.
Diplomatic sources are confident of surmounting these issues. “This is not the first time France is central to India’s nuclear energy programme. Our cooperation started in 1951 and the long term commitment to work together in nuclear and space segments triggers all kinds of cooperation easily and solves all problems.”
June 15, 2012
Updated: June 15, 2012 01:39 IST
This renaissance is just a fairy tale
Nityanand Jayaraman
The unpredictable financial implications of constructing, running, decommissioning plants and handling risks are causing a global rethink on nuclear energy
For a professed proponent of liberalisation and free trade, Prime Minister Manmohan Singh's penchant for a technology that cannot float without subsidies is telling. Nuclear power's unfavourable economics are not lost on Dr. Singh.
Recently, Westinghouse Electric and Nuclear Power Corporation of India Limited (NPCIL) signed a Memorandum of Understanding (MoU) to negotiate the setting up of AP1000 reactors in Gujarat, ending a slump in interest from the Toshiba subsidiary in India's nuclear market. For Toshiba's Westinghouse and other nuclear equipment suppliers, the Civil Nuclear Liability Act's clause on supplier liability was the key hurdle to investing in India. The companies wanted the Indian government to insulate them from the financial fallouts of any potential disaster caused by their technology by spreading that liability among taxpayers. The recent MoU suggests some progress in moving towards this goal.
More obstacles remain, though. Nuclear projects are un-bankable. The government may deploy mental health specialists to deal with the fears of Kudankulam protestors. But those shrinks are unlikely to be able to allay the fears of financiers or nuclear equipment suppliers.
According to nuclear energy expert Peter Bradford, “The most implacable enemy of nuclear power in the past 30 years has been the risk not to public health but to investors' wallets. No nuclear power project has ever bid successfully in a competitive energy market anywhere in the world.” Mr. Bradford was member of the U.S. Nuclear Regulatory Commission and chair of the New York and Maine electricity regulatory commissions. He teaches a course on nuclear power at the Vermont Law School.
Second thoughts
Unpredictable financial implications associated with constructing, running, decommissioning plants and handling nuclear risks are causing a rethink on nuclear energy worldwide. But these developments seem to slip by India without so much as causing a ripple.
Germany and Switzerland have decided to phase out nuclear power, despite their substantial dependence on it. Israel abandoned its year-old civilian nuclear programme after Fukushima. Belgium revived a pre-Fukushima decision to phase out nuclear power, using the Japanese disaster as a reminder. Italy and Kuwait gave up their nuclear debut by abandoning plans for 10 and four plants respectively. Mexico dropped plans for constructing 10 plants. All of Japan's 54 reactors are now closed, and plans for 14 new reactors killed.
The story of nuclear energy's unviability is told not just by the actions of naysayers, but also by the experiences of those — like Egypt, Saudi Arabia, Jordan, Iran, Turkey, Vietnam and South Africa — pursuing nuclear programmes. All of them want the nuclear option, but have no idea how they will finance it.
If the U.S. is Dr. Singh's inspiration, then the so-called nuclear renaissance's trajectory in that country gives even more cause for despair. In 2009, the U.S. declared a nuclear revival with promises of more than 30 new reactors. Today, most of these projects are doomed. Even candidates for federal loan guarantees such as the South Texas project, and the Calvert Cliffs-3 project in Maryland, have been mothballed.
State governments in the U.S. do not seem to share the Federal Government's enthusiasm for nukes. Bills to reverse moratoria on nuclear plants in Minnesota, Kentucky and Wisconsin failed last year. In Missouri, North Carolina and Iowa, legislators defeated bills to charge electricity consumers in advance to finance reactors.
“At the time of Fukushima, only four countries — China, Russia, India and South Korea — were building more than two reactors. In these four nations, citizens pay for the new reactors the government chooses to build through direct subsidies or energy price hikes,” Bradford notes.
Finland was among the few that reiterated its commitment to nuclear power after the Fukushima disaster. The 1,600 MW Olkiluoto nuclear plant uses French company Areva's technology. Areva's modular design was expected to make it faster and cheaper to build. But 11 years later, the project is behind schedule and its $4.2 billion budget is up now by 50 per cent. After Fukushima, Areva admits that the same plant would cost $8 billion. Even Areva's home project, in Flamanville, France, has suffered a $4 billion cost overrun and a four year delay. Indeed, 31 out of 45 reactors that were being constructed globally around 2009 were either delayed or did not have official dates for commissioning, says a report for the German Government by consultant Mycle Schneider.
In India
In Kalpakkam, meanwhile, the Prototype Fast Breeder Reactor was slotted to contribute to the grid in March 2012. In 2005, Baldev Raj, Director of the Indira Gandhi Centre for Atomic Research, Kalpakkam, boasted that the 500 MW unit will be completed in 2010, 18 months before schedule. Till date, there is no sign of this happening. The Kudankulam plant, which is now 23 years old since conception, lost only eight months due to protestors.
In Jaitapur too, the government has more to worry about than local protestors. Areva, the technology supplier, is in trouble. Last year, it announced losses of €1.6 billion, and the sacking of 1,200 workers in Germany. Last June, it decided to suspend production at a Virginia reactor component plant due to declining market prospects. Its expansion plans in France, the United Kingdom, and the U.S. may never materialise. Areva expected to sell 50 nuclear reactors this decade. It has not received a single order since 2007.
Now, with a socialist president at the helm in France, Areva's future looks even more uncertain. French President François Hollande had promised voters a reduction in nuclear dependence from 75 to 50 per cent, and shutdown of an aging reactor in Fessenheim. Whether or not he carries through with these promises, it appears certain that no new plants will be built or planned during his term. Both conservative-led Germany and socialist France will make up the shortfall from the nuclear phase-out, by investing in renewables for electricity and new jobs. In replacing nuclear with renewables, these nations are declaring that despite its carbon dividend, nuclear is too risky — financially, politically and environmentally — to pursue.
(Nityanand Jayaraman is an independent writer and volunteer with the Chennai Solidarity Group for Kudankulam Struggle.)
March 3, 2012
Updated: March 3, 2012 00:03 IST
French nuclear giant Areva reports $3.2-bn loss
AP
AFP NUKED BALANCE SHEET: The Tricastin Areva’s nuclear power plant in the French town of Pierrelatte.
France's State-controlled nuclear giant Areva lost €2.4 billion ($3.2 billion) in 2011, much of that on the back of a troubled uranium mining venture that has been the subject of investigation.
Thursday's dismal figures reflect a difficult year for the nuclear plant operator, which is also facing a global rethink of the future of atomic energy in the wake of Japan's Fukushima disaster. For instance, Germany has decided to shut down all of its plants by 2022, forcing Areva to lay off staff in that country. It has also instituted a partial hiring freeze in France and suspended projects.
Top resignation
Last year also saw the departure of charismatic chief executive Anne Lauvergeon, known as “Atomic Anne,” after she lost the support of the French government. Her tenure has come under scrutiny because the mining subsidiary, UraMin, was acquired in 2007, while she was in charge. The company's internal review of the acquisition found no evidence of fraud, but recommended more oversight for future purchases. Areva, which reports its annual sales and profit figures separately, had previously said that its revenue fell 2.6 percent to €8.87 billion last year. The company's loss of €2.42 for last year billion compares with a small profit in 2010 of €883 million.
The figures were even worse than the company's own guidance, issued just a few weeks ago. When it announced its revenue numbers, CEO Luc Oursel had said he was anticipating an operating loss of between €1.4 billion and €1.6 billion. The largest hit was seen in the mining group, where it booked a charge of €1.46 billion for UraMin. But most business groups saw operating losses. Oursel contended, however, that the worst was behind Areva and that his turnaround plan was already yielding results. “In a difficult context, the slight decline in revenue in 2011 demonstrates the robustness of Areva's integrated model,” he said.
December 5, 2010
Updated: December 5, 2010 23:28 IST
India racing to buy an untried reactor?
Vaiju Naravane
PTI Prime Minister Manmohan Singh with French President Nicholas Sarkozy during a meeting in Washington. A memorandum of understanding for the sale of two EPRs was signed in 2009 and there are chances that a framework agreement will be signed during French President Nicolas Sarkozy's working visit to India which began on December 4. File Photo
The EPR is still a reactor in the making, whose design is likely to undergo serious modification before it can be built as a series.
The announcement last week by the Finnish utility TVO of yet another year-long delay in the construction of the new Areva European Pressurised Reactor/Evolutionary Power Reactor (EPR) being built at Olkiluoto in southern Finland has re-launched the controversy surrounding the world's biggest, most expensive and as yet untried nuclear reactor.
India is slated to purchase up to six of these reactors, of which the first two alone carry an estimated price tag of €11 billion. A memorandum of understanding for the sale of two EPRs was signed in 2009 and there are chances that a framework agreement will be signed during French President Nicolas Sarkozy's working visit to India which began on December 4.
Supporters of the EPRs say that India desperately needs nuclear energy to replace dwindling and polluting fossil fuels. Given India's population density and the paucity of land, Areva's powerful 1,650 MWe nuclear reactor would be best suited to its needs. However, critics point out that the technology, which is extremely capital intensive, remains untried and the EPR has run into trouble wherever it is being built.
Started in 2005, the initial completion and commissioning date for the Finnish OL3 reactor was 2009. Over the years and because of repeated delays, the reactor's budget too has increased from €3 billion to an estimated €5.7 billion with TVO and Areva locked in bitter arbitration. The Finnish company which awarded Areva a fixed price, turn key contract for the project is claiming damages totalling some €2.7 billion.
There are only four such reactors currently under construction in the world, two in China, known as Taishan 1 and 2, one in Finland known as OL3 and Flamanville3 in northern France. Work on Taishan 1 and 2 has just started and it is difficult to say whether it is running to cost and will be completed on time.
But the Flamanville3 reactor in France, being built by the French electricity giant EDF, the world's most experienced architect engineer which has 58 nuclear reactors to its credit in France alone, has also run up huge delays and cost over-runs. Anne Lauvergeon, the CEO of Areva, in a snide aside during an interview with The Hindu indicated that the problems of both Ol3 and Flamanville could come from the civil engineering firm retained for both projects — the French construction giant, Bouygues.
A third generation pressurised water reactor, the EPR was initially known as the European Pressurised Reactor or the Evolutionary Power Reactor. This has now been changed by Areva to the trademarked name of EPR. Designed to be more competitive because of its massive power output of 1,650MWe, the reactor uses fuel that is a mix of uranium and plutonium oxide known as MOX.
The EPR has been marketed as the safest and strongest reactor in the world capable of withstanding hits from a full-size passenger airplane. But critics say that the redundancy of the safety measures has made the reactor extremely complex and costly to build, resulting in huge delays and cost over-runs.
After the French consortium led by EDF, GDF-Suez and Areva was beaten by the South Koreans who were awarded a contract to supply the United Arab Emirates with four nuclear reactors, President Sarkozy asked the former CEO and present Honorary President of EDF, Francois Roussley, to write a report on the French nuclear industry.
“The credibility of the EPR model and the capacity of the French nuclear industry to successfully build new reactors have been seriously tested by the difficulties encountered on the sites of Olkiluoto and Flamanville3 …The complexity of the EPR resulting from its conception, notably its level of power, the core and the core catcher and the excessive and redundant safety features remains a handicap both for its construction and its cost. It is therefore important to rapidly redress the situation by taking urgent measures to allow the French nuclear industry to reposition itself on the civil nuclear market. If this is not done, it is the credibility and perhaps the very existence of Areva and the industry around it, which will be threatened,” Mr. Roussely says in his report.
He goes on to insist that Areva and EDF should bring the completion of the OL3 and the Flamanville 3 reactors to a rapid and satisfactory conclusion bearing in mind time and cost over-runs. “The lessons drawn from the construction of these two reactors should be properly understood and analysed before commencing the next EPR in France or the one in the U.K.,” the Roussley report says.
Professor Thomas, a specialist on nuclear energy at Greenwich University's School of Business, feels that India would be making “a terrible mistake purchasing technology that has been plagued by problems, is needlessly expensive and, above all, is yet to prove its efficiency.”
The U.S. Nuclear Regulatory Commission, considered the gold standard in matters of nuclear safety, in a communiqué issued as recently as July 23, 2010, said it “has informed AREVA NP that the company has yet to demonstrate how some aspects of the EPR reactor's digital instrumentation and control system meet NRC requirements … AREVA need to better demonstrate that each safety division in the system can perform its function without relying on information originating outside the safety division and is protected from adverse influence from outside the division …”
The exact cost of each EPR in India has not been disclosed. Ms Lauvergeon told The Hindu that the cost would be less than Rs. 4 per Kilowatt/hour. Professor Thomas rubbishes the claim. “There are three important factors in determining the price of a kilowatt/hour of nuclear electricity. The first is the cost of building the plant and until you see Areva's bid you don't know what that is going to be. The second element is the cost of borrowing the money. Now what rate of interest will India have to pay? Areva does not know that. And the third element is whether the plant is reliable because if its unreliable there will be fewer kilowatt hours to spread those fixed costs over,” Professor Thomas told The Hindu.
In an interview with the newspaper, the project manager of the Flamanville3 site, EDF's Robert Pays tried to explain the delays and cost over-runs at the plant: “Last summer, we announced a re-evaluation of the budget for the entire reactor, global costs of €5 billion. It is clear that when the duration of the work goes up, the costs go up — that's the first reason for the cost over runs. The second is that we had drawn up cost estimates on the basis of preliminary quantity estimates — the number of kilometres of pipes, cables, the kilos of steel in the concrete, etc., but detailed studies indicated that the quantities required were in fact superior to the initial estimates. Since this reactor was the first in the series there were a certain number of studies or the design had not been entirely finished when we started construction and then the Nuclear Safety Authority also obliges to modify certain features because we have to comply with its comments and observations and that too adds to the cost.”
The long and short of it is that the EPR is still a reactor in the making whose design is likely to undergo serious modification before it can be built as a series.
Thomas Houdre, the chief of the French Nuclear Safety Authority (ASN), told The Hindu that his organisation was waiting for Areva to submit another report on the Instrumentation and Control question which continues to hang fire. The ASN has also pointed to welding problems. Classified EDF documents leaked to the press in March 2010 have raised questions about the safety of the nuclear core. “Spanning 10 years from 1999 to 2009, the documents refer to a major redesign of the core because original plans did not meet safety criteria for control rod ejection accident at high power,” the New York Times reported. “Control rods regulate the nuclear reaction in the reactor vessel, and a control rod ejection accident has a domino effect, causing parts of the reactor to overheat. In a severe case, that will break the cladding covering the radioactive fuel rods, causing them to release radioactivity, with potentially dangerous consequences,” the NYT noted on July 26, 2010.
EDF documents reveal that the architect engineer at Flamanville3 tried to find safer cladding material. However, these attempts have so far not been successful.
Says Professor Thomas: “The EPR will eventually be certified in the U.K. and the U.S., but not for two maybe three years. Until that point there could be significant design changes and the additional requirements of the regulators could further increase the cost. If the regulator asks for an additional safety system, for example, that could increase the price of the plant. If I was India, I would wait to see when that happened.”
Copyright© 2013, The Hindu
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