Jaitapur Nuclear Power Plant in India to have 30-60 per cent localisation

The France’s energy giant EDF hopes to finalise deal with the Nuclear Power Corporation of India Ltd (NPCIL) by early 2018 and is aiming to include a degree of localisation in the setting up of the largest nuclear power plant in the world at Jaitapur, Maharashtra. The first two units of the plant will have 30 per cent contribution from Indian industry and the subsequent units will have 60 per cent. Senior Vice-President of EDF’s New Nuclear Projects and Engineering Division Vakis Ramany talks to Nuclear Asia about the objectives and strategies that the European firm is looking at to capture the Indian renewable energy market. Read the full interview here.

What is the business agenda of EDF in India and how important it is as a market?

In the last 20 years, EDF has offered services in the entire value chain of Indian Power Sector, including low carbon electricity generation, transition and distribution. India being amongst the top five focus areas, our vision is in line with the Government of India’s 2030 clean energy and sustainability goals. Presently, we are nearing 400 MW installed capacity in renewable and aim to enhance our capacity in upcoming years by investing in solar and wind projects. Moreover, we are also developing advisory services in India, by engaging in energy optimization solutions with a focus on Smart City projects and smart grid projects. Last year, EDF won a tender offer with WAPCOS to develop smart grid of 75,000 smart metres for the New Delhi Municipal Council (NDMC).

In addition, EDF is developing a six units nuclear project on the Jaitapur site with Nuclear Power Corporation of India (NPCIL), aiming to add 9600 MW to support the dynamic development of the Mumbai region. The project is based on the safe and proven high power EPR technology, already licensed in four countries. It would be the largest nuclear power project in the world and of great added value for the Indian economy. Indian companies could likely participate in the project to the tune of 30 per cent for the first two EPRs, and up to 60 per cent from the third unit onward. We are already working on identifying the companies with the appropriate capabilities in the Indian supply chain.

What is the status of the negotiations in the setting up of the Jaitapur Nuclear Power Plant? When is a breakthrough expected? Also, what are the roadblocks in the finalisation of the deal?

In the beginning of 2016, we signed a Memorandum of Understanding (MoU) with NPCIL, in line with the road map agreed at Government level. The first Techno-Commercial Proposal was presented by us mid-2016.

Currently, we are in intense discussions with NPCIL to define a General Framework Agreement (GFA) for the project and we are expecting the signing of this agreement early 2018. The GFA will define a roadmap of collaboration between NPCIL and EDF. We aim to provide the safest, most cost-effective and efficient project to our client and partner. The EPR technology is fully fit for that.

The EPR reactor has been designed with the highest level of safety. This design is the product of 30 years’ experience acquired through the operation of a nuclear fleet and through advances in scientific and technical knowledge. To date, it is the only third-generation reactor in the world to have been granted a licence in four countries: Finland, France, China and the United Kingdom.

The EPR is the world’s most powerful reactor, making it an asset for countries that are big electricity consumers with a mature power grid, as is the case with India.

EDF is known for bringing in the concept of Green bonds. Will the Jaitapur Nuclear Power Plant benefit from such financing?

From the very first issuance of green bonds by EDF in 2013, the intention of the Group was to earmark funds raised via this mechanism to renewable projects. Such has been the case for all five green bond issuances. As of now, the framework that defines which project can be supported via this mechanism does not include nuclear.

As far as Jaitapur financing is concerned, we are studying various options, with the support of the French government, to provide NPCIL with the most competitive solution.

What will be the participation of Indian players especially in the sourcing of the material for the Jaitapur Nuclear Power Plant?

In line with PM Modi’s “Make in India” initiative, localization is primarily a way, as agreed in the roadmap between India and France, to involve Indian manufacturers in the Nuclear Program. EDF will guide Indian manufacturers in terms of technical and safety requirements / compliance. Given the capabilities of the Indian Nuclear Industry, we believe that localization could provide cost advantages to the nuclear program.

EDF has had positive localization experience in the past and is therefore confident in its ability to meet the Indian government expectations in this regard.

In November, as part of its localization approach, EDF organised a Supplier Day in Mumbai which gathered more than 100 companies specialized in the design, construction and engineering services. The event underlined our commitment to accompany the technical and industrial development of Indian companies as required. Also, it paved way for partnership opportunities and identifying qualified suppliers to join our supply chain. Similarly to our operations in countries where we have built reactors, we work on developing a supply base that is closer to the project for better project management, schedule manage lent and cost control.

How do you see Indian renewable energy market growth especially in the face of fast-paced growth it aims for and the burgeoning population?

Presently, there are over 250 million people in India with no access to electricity. Given the pressures of rapid urbanization and industrialisation, there is an urgent need to address the unsatisfied energy demand. To tackle energy poverty as well as Climate Change, the Government of India’s has set ambitious clean energy targets by setting an ambitious target of 175 GW by 2030.

India’s total renewable energy capacity crossed 60,000 MW in September 2017. Owing to attractive FDI policies, $200-300 billion of new investments are anticipated in India’s renewable space, with a major contribution through global capital inflows in the next 10 years, which is promising for the sector.

We strongly believe that the answer to India’s energy challenges lies in a diversified energy mix with a focus on renewable and nuclear energy sources. We support the idea that nuclear energy being carbon free is part of the global solution and would help offset the intermittent nature of renewables. The current share of renewable is only 17 per cent, which means there is a lot of scope for growth in renewables, especially in the solar field as India is blessed with high radiation levels and 300 sunny days. EDF plans to make the most of these opportunities, which is why we set ourselves the goal of reaching 2 GW of renewables in India within 5 years.

EDF has committed USD 2 billion for investment in India’s renewable energy sector. Which all assets are coming up under this commitment?

EDF has more than 200 MWp of solar capacity in India. In November, we commissioned three new solar plants – 72 MWp (in Uttarakhand) and 15 MWp (in Madhya Pradesh) – that provide enough electricity to power 120 000 Indian households. These plants add to 120 MWp we have been operating on Rajasthan.

Also, we have recently commissioned five wind farms located in Gujarat, accounting for 164 MW. Their electricity powers 460, 000 households. The wind farms were built by SITAC Wind Management and Development, a company specialising in wind power. It is equally owned by EDF Energies Nouvelles and the SITAC Group. Each wind farm has a 25-year power purchase agreement (PPA) with Gujarat Urja Vikas Nigam Ltd. (GUVNL), the region’s distribution utility.

EDF is aiming to grow its installed renewable capacity in the coming years.

What is the global strategy of EDF for the coming years?

EDF has defined a strategy called CAP 2030 which underpins the Group’s goal of being an efficient and responsible electricity company that champions low-carbon growth.

The Group intends to go further and become the leader in large low-carbon electricity facilities that are safe and competitive. Achieving this goal will require the company to double its global capacity in renewable energy – wind, solar, marine and hydro – as well as extend the life of its existing French nuclear fleet through the Grand Carénage programme and develop new nuclear in fast growing-countries.

Already a well-established leader in Europe, EDF’s ambition is to push back the frontiers to grasp future growth wherever it is to be found. While the Group is already a major player in renewable energy and nuclear power in Europe and other world regions, it has set itself the objective of increasing its share of international business by 2030.

It intends to do so by becoming a key player in three to five countries and developing a significant presence in around 10 countries. Its focus will be on low-carbon generation, energy services, and engineering and trading

The Group is reinventing the products and services it offers to help residential customers manage their electricity consumption, to support the energy and financial performance of business customers, and to support local authorities in finding sustainable solutions for the cities of the future.