India to Announce Location of Two Nuclear Sites During Hillary Clinton's Visit in July

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Indo-U.S. nuclear agreement will move a step ahead with India likely to announce details of two nuclear power projects that will be developed with reactors supplied by the U.S. The announcement is likely to be made during the visit of U.S. Secretary of State Hillary Clinton to India next month. Since the international community lifted the 34-year nuclear trade embargo imposed on India, nuclear firms in the U.S. have been exploring possibilities of tapping into the Indian market. The prospect of new business from India is being viewed not only as a big source of revenue, but also as a good opportunity to create hundreds of jobs in the U.S.

The latest development in the Indo-U.S. nuclear relations is the continuation of negotiations and discussions started by the Bush administration with India, which also led to the signing of the nuclear pact between both the nations. The agreement provides a framework and guidelines for technical, economic and techno-commercial cooperation between the U.S. and India. The nuclear agreement, which was announced in 2005, was eventually signed by both countries on October 9, 2008. In September last year, India also issued a letter of intent confirming its interest to purchase reactors and other equipment from nuclear firms in the U.S. in order to develop new power generation capacity of approximately 10,000 MW. At the time, India also indicated that it intended to identify two locations for building nuclear power plants with nuclear technology and equipment from the U.S.

India, on its part, has submitted the safeguard plan and signed the Convention of Supplementary Compensation (CSC) treaty with the International Atomic Energy Agency (IAEA) (Vienna, Austria). The safeguard agreement, released to the IAEA, will help India enhance its nuclear power facilities to global standards. The agreement also ensures that raw material and equipment are utilized only for a civilian nuclear program and not for weapons development. India will also provide access to 14 civilian nuclear sites for inspection by IAEA officials. The CSC is a set of legal guidelines and a regulatory framework for allotting responsibility in the event of accident or damage at a nuclear site. U.S.-based nuclear companies have been hampered by legislation that increases their liability and hinders their investment in India. These firms have been lobbying intensely for India to sign this convention, as this will reduce entry barriers and legislative restrictions for the U.S.-based companies to do business with India. France and Russia were progressing with business deals after having already signed nuclear agreements with India. Unlike the U.S., Russia and France were providing liability shield to companies in the event of a nuclear accident.

Recently, GE-Hitachi Nuclear Energy Limited (GEH) (Wilmington, North Carolina), the joint venture formed by General Electric Company (NYSE:GE) (Fairfield, Connecticut) and Hitachi Limited (NYSE:HIT) (Tokyo, Japan), and Westinghouse Electric LLC (Monroeville, Pennsylvania) signed separate memorandums of understanding with Nuclear Power Corporation of India Limited (NPCIL) (Mumbai) to extend technological expertise for setting up nuclear reactors in India. While GEH will work with NPCIL to develop advanced boiling water reactor technology, Westinghouse Electric is expected to provide technical assistance in building AP-1000 reactors. In December last year, NPCIL began discussions with both companies to develop and supply nuclear reactors.

The signing of the historic 123 Agreement opened a multitude of opportunities for India to develop its nuclear industry. The country garnered tremendous international attention, and several countries, including France and Russia, came forward to sign nuclear-trade deals. France, which had the first mover advantage, has already supplied the first consignment of uranium-ore concentrate to India in March this year. This delivery is part of an agreement signed by France's Areva with India to supply 300 tons of uranium fuel. NPCIL is also setting up two 1,650-MW European pressurized reactors in Jaitapur, Maharashtra, which will be built and delivered by Areva SA (EPA:CEI) (Paris).

Industry experts indicate that business from India's nuclear sector will grow to about $150 billion in the next 30 years. India is targeting the development of 60,000 MW of nuclear power capacity by 2030, which will contribute approximately 10% of the country's total energy mix at the time. Presently, the country's total installed nuclear power generating capacity is about 4,120 MW, which accounts for less than 3% of its energy output from all sources. According to the proposed development schedule created for the Eleventh Five-Year Plan (2007-12), India plans to set up 5,600 MW of pressurized heavy water reactors, 10,000 MW of light water reactors, 300 MW of advanced thorium-based heavy water reactors, and 1,500 MW of fast breeder reactors.

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