Areva SA, the world's largest maker of nuclear power stations, and General Electric Co. are among four companies poised to share $14 billion of orders from India as nations led by the U.S. prepare to lift a 33-year ban.
Toshiba Corp.'s Westinghouse Electric Co. and Russia's atomic energy agency Rosatom will probably also win contracts to each build two 1,000 megawatt reactors, said Nuclear Power Corp. of India Chairman S. K. Jain. India will be able to purchase equipment after an Aug. 3 accord with the U.S. is approved by the 45-nation Nuclear Suppliers Group.
“These are the only four reactors in the world that meet our requirements,'' Jain said in an interview in Mumbai after the agreement was announced.
The orders will form the first phase of Prime Minister Manmohan Singh's plan to build 40,000 megawatts of nuclear capacity by 2020, equivalent to a third of current generation. India needs to add to the 3 percent of electricity that comes from Russian-designed reactors to meet soaring energy needs and reduce its reliance on coal-fired power plants.
“India will try to diversify its suppliers and it's highly likely all four will win the contracts,'' said Mikhail Stiskin, a nuclear industry analyst with Moscow-based brokerage Troika Dialog. “The question is how much more will one or the other get, and Russia seems to be in a strong position.''
Nuclear energy projects in India and China to sustain economic growth that's more than five times the pace of the U.S. may lead to shortages of manpower and equipment and push up costs. Global capacity will rise to 519,000 megawatts by 2030 from 370,000 megawatts last year, according to International Energy Agency forecasts.
Initial Contracts
General Electric, based in Fairfield, Connecticut, Paris- based Areva, Westinghouse and Rosatom may each win contracts valued at $3.5 billion, part of a $40 billion reactor-building program, Jain said.
Nuclear Power Corp., India's monopoly atomic energy generator, plans to set up plants at four sites in the states of Gujarat, Andhra Pradesh, Orissa and West Bengal, he said.
The company plans to build “nuclear parks'' housing reactors capable of generating as much as 8,000 megawatts at a single location.
“To begin with, we will give out orders for two reactors of 1,000 megawatts at each of the locations,'' Jain said in an Aug. 3 interview. The four suppliers will not be permitted to own equity in the projects under Indian law, he said.
Nuclear Power Corp. plans to buy the AP1000 series of reactors from Monroeville, Pennsylvania-based Westinghouse, the `ABWR' series from General Electric, Areva's serial designs for the 1,000 megawatt reactors and the Russian VVR 1,000 reactors, he said.
U.S. and Russia
The state-owned company will award contracts after India's civilian nuclear deal is cleared by the International Atomic Energy Agency and the Nuclear Suppliers Group, Jain said.
The U.S. deal was held up by differences over whether India would get a perennial supply of nuclear fuel, be allowed to reprocess spent fuel and have the right to conduct nuclear tests.
India signed a similar civilian nuclear agreement with Russia in January. Russia is helping India build the two 1,000- megawatt light water reactors at the Kudankulam nuclear power station in the southern state of Tamil Nadu.
International sanctions against India were prompted by the nation's testing of a nuclear weapon in 1974. The explosion conducted in a desert in western India prompted the formation of the Nuclear Suppliers Group. Another round of tests by India in 1998 led to the U.S. choking trade with India by blocking the Export-Import Bank and Overseas Private Investment Corp. from guarantee loans to projects in India.
The U.S. removed the economic sanctions in 2001 after the Sept. 11 attacks to bolster support for its campaign against terrorism. The U.S. decision to give India access to civilian nuclear technology was based on talks initiated during Prime Minister Singh's visit to Washington in July 2005 and concluded during President Bush's visit to India seven months later.
