India to Designate Sites for U.S.-Developed Reactors

India on Monday pledged to designate two nuclear energy park sites for development by U.S. companies—likely Westinghouse Electric Co. and GE-Hitachi—as part of its civilian nuclear energy cooperation agreement with the U.S. Before the deals—worth an estimated $10 billion—to develop nuclear power plants are signed, however, the U.S. will need to overcome several hurdles.

The U.S. power plants will likely be built in the southern state of Andhra Pradesh and the western state of Gujarat, according to the Indian Express. The Business Standard reported on Tuesday, meanwhile, that Prime Minister Manmohan Singh had told U.S. Secretary of State Hillary Clinton India would buy up to 10,000 MW of civil nuclear power from U.S. suppliers. Also on Tuesday, Tokyo-based newspaper Nikkei reported that Westinghouse Electric Co.—the U.S.-based unit of Japan’s Toshiba Corp.—and GE Hitachi Nuclear Energy, the joint venture between GE Energy and Hitachi, will likely win the deals for the two plants. The newspaper cited sources close to the matter.

GE Hitachi and Westinghouse have separately been in talks with Nuclear Power Corp. of India Ltd. (NPCIL), the federally owned entity that runs the nation’s 17 existing reactors, as well as with a host of Indian engineering and manufacturing companies. More recently, as Westinghouse sought to reach agreement on the deployment of AP1000 reactors in India, GE Hitachi has signed a nuclear power plant development agreement with India’s top engineering and construction company, Larsen & Toubro.

But neither company has gotten as far as France and Russia, with whom India has also signed civilian nuclear cooperation deals. NPCIL signed an agreement in February with AREVA, a majority French government–owned company, for two EPRs at Jaitapur in Maharashtra. AREVA also promised a lifetime fuel supply for the reactors—up to 60 years. Earlier this month, AREVA submitted a bid to design and build the two EPRs, adding that it had set up agreement with engineering firms Bharat Forge and Tata Sons unit TCE Consulting Engineerings Ltd.

India also agreed to buy four VVER-1000 reactors from Russian state-owned company AtomStroyExport last December, including the two that are under construction in  Kudankulan, Tamil Nadu. India has not formally designated a site for these reactors, but it has promised to buy 2,000 metric tons of nuclear fuel from Russia—and it has received its first installment, an official told The Hindu last week. Nuclear cooperation deals with the UK and Canada are also in the pipeline.

Before India and U.S. companies sign deals, they would need to iron out some elementary issues. The Indian government is now preparing to hand over its separation plan of safeguarded nuclear facilities to the International Atomic Energy Agency by the month’s end—though it has yet to sign an international convention that limits liability of private nuclear companies in case of nuclear accidents.

Meanwhile, the U.S. Department of Energy will need to grant U.S. companies specific authorizations to allow transfer of nuclear technology to Indian entities, but first, U.S. regulators require that India makes “nonproliferation assurances,” to certify that U.S. technologies won’t be transferred to any parties other than the importer.

India is struggling to meet its lofty goals for power capacity expansion. To bridge a peak power deficit of about 12%, the country plans to install 78 GW of new capacity by 2012. Only 15.1 GW has been so far commissioned.

On Monday, Junior Oil Minister Bharat Singh Solanki reportedly told parliament that the nation would likely add only 70% of an estimated target of 14.5 GW in the year to March 2010. The delays were blamed on coal shortages in April through June, Reuters reported. More than 52% of India’s power is coal-fired, and shortages are common even though the nation harbors the world’s fourth-largest coal resources.

Sources: The Indian Express, The Business Standard, Nikkei, The Hindu, Reuters