Areva to Supply 300 Tons of Uranium to India's NPCIL

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the first contract signed between India and an international private company for nuclear commerce following the approval of the Nuclear Suppliers Group (NSG), Areva SA (EPA:CEI) (Paris) has entered into an agreement with Nuclear Power Corporation of India Limited (NPCIL) (Mumbai) to supply 300 tons of uranium to nuclear reactors in India, that will come under the safeguard of the International Atomic Energy Agency (Vienna, Austria). The agreed quantity of fuel supply is said to be adequate to generate about 1,500 megawatts (MW) of nuclear power, accounting for more than 35% of India's present installed nuclear power generation capacity of 4,120 MW from 17 nuclear reactors at six locations operated by NPCIL.

Jairam Ramesh, India's Minister of State for Commerce, Industry and Power, said the fresh supply of fuel could see the country's nuclear reactors to operating at 90% of their installed capacity by June 2009. India's fuel-starved nuclear reactors have been operating at 45% of installed capacity because of the unavailability of uranium. The supply of fuel from Areva is likely to increase power generation from the present 1,800 MW to nearly 4,100 MW.

The agreement between Areva and NPCIL is a follow-up of the nuclear cooperation agreement between India and France that was signed when Indian Prime Minister Manmohan Singh visited Paris in September. India also has civil nuclear cooperation agreements with Russia and the U.S. in place. Firms from Canada and Kazakhstan reportedly approached NPCIL to tap into India's potential nuclear power sector through the sale of uranium but further developments on this front are possible only after India enters into similar nuclear cooperation agreements with interested countries.

India has modest uranium reserves that are gauged to be adequate to generate only 10,000 MW of nuclear power. Also, domestic ore is of an inferior quality with uranium content of 0.1% as against international standards of 12% to 14%. India's Department of Atomic Energy is in talks with non-NSG nations, including Namibia and Nigeria, to procure uranium from their rich reserves. Nigeria is home to 10% of the uranium reserves in the world.

In addition to the agreement to supply fuel, Areva has also expressed interest in supplying nuclear reactors with power generation capacity of 1,700 MW to NPCIL. Russia is supplying NPCIL with four nuclear power reactors with a capacity of 1,000 MW each for the firm's upcoming nuclear power plant in Koodankulam, Tamil Nadu. The first of the set of four reactors is expected to be installed by September 2009.

As part of its plan to increase nuclear power generation to 20,000 MW by 2020, India was looking to set up 19 nuclear power reactors with a total installed capacity of 16,000 MW during the ongoing Eleventh Five-Year Plan Period (2007-12). These were to include 10 imported light water reactors with a power generation capacity of 1,000 MW each, eight indigenous pressurized heavy water reactors with a capacity of 700 MW each, and an advanced heavy water reactor with a capacity of 300 MW. However, the unavailability of fuel has forced the government to downsize plans to add 3,880 MW in nuclear generation in the current plan period. NPCIL is looking to add more than 10,000 MW of nuclear power generation capacity in the Twelfth Five-Year Plan period to compensate.

Anil Kakodka, Chairman of the Atomic Energy Commission of the Department of Atomic Energy, recently announced that private sector players interested in the nuclear power sector would be required to team up with NPCIL as a minority partner to ensure that the latter retains control of India's nuclear power program. Nuclear power currently accounts for 3% of the total power generated in the country. India is planning to increase the share of nuclear power in the total electricity generated to 20% by 2020.

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