Move towards Indian joint venture
30 October 2008
Leading Indian power firms could set up a joint venture company to build imported nuclear power plants.
The board of India's largest power company, NTPC, yesterday approved a proposal to approach Nuclear Power Corporation of India Ltd (NPCIL) with a view to signing a memorandum of understanding towards new nuclear projects.
The proposal said that NPCIL would hold 51% of any resulting joint venture companies, which would be in line with current legislation. It is expected, however, that the rules will be changed in time to allow other competent companies to control nuclear infrastructure.
NTPC has already made clear its intention to operate 2000 MWe of nuclear capacity by 2017.
India was virtually unable to import nuclear power technology from abroad until the Nuclear Suppliers Group (NSG) made special guidelines for trading with the country in early September. As a non-signatory to the Nuclear non-Proliferation Treaty without full-scope safeguards of its nuclear facilities, India had been barred from trade under previous guidelines.
Following a specific safeguards agreement made with the International Atomic Energy Agency and the subsequent update in NSG guidance, any country can enter into bilateral nuclear cooperation agreements with India, which would allow businesses in both nations to commence nuclear trade in the same way as that which already goes on between other nations. So far, the USA and France have made such agreements, although no commercial contracts have followed as yet. Russia and the UK are ready to complete agreements too.
The change is expected to lead to a surge in nuclear build in India as advanced designs are brought in to operate alongside Indian-designed power systems which, while workable, have proven to perform below top global standards. The country is aiming to meet 25% of its surging electricity needs using nuclear reactors by 2050, up from just a few percent now.