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Cost of Electricity from the Jaitapur Nuclear Power Plant

The Indian government has announced that it plans to purchase six European Pressurised Reactors for Jaitapur from the French company, Areva. No EPR is in commercial operation anywhere else in the world. Estimates of costs from plants under construction in Finland and France suggest that each unit may cost as much as Rs 60,000 crore; at this price, six units will cost Rs 3.6 lakh crore. The paper shows that the expected starting tariff for electricity from these reactors, without including transmission and distribution costs, is likely to be around Rs 15 per unit (kWh). The existing revenue model used by the government already involves a large loss for the taxpayer. The government may seek to make the tariff from Jaitapur competitive by increasing the scope and nature of these handouts.

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