ONGC forays into nuclear power with NPCIL

ONGC is exploring investment opportunities in the nuclear power generation sector in association with the Nuclear Power Corporation of India Limited.

With an aim to raise the share of nuclear power in the energy basket of India, ONGC was on a hunt for a partner to foray into nuclear energy because the government of India has entrusted only two companies to take up nuclear power generation in the country, one of them being NPCIL and the other one is Bhartiya Nabhikiya Vidyut Nigam.

As of now, coal provides 68% of the electricity in India, but reserves are limited. Gas provides 8%, hydro 14% and nuclear 2.9%. As per the country`s integrated energy policy, the nuclear share in the power generation is projected to increase from the current level of 2.9% to 9% by 2031-32 and ONGC can sense an opportunity here.

Presently, India stands ninth in the world in terms of number of operational nuclear power reactors. It had 20 nuclear reactors in operation generating 4,780 MW, as of 2010. NPCIL intends to set up five more nuclear energy parks, each with a total capacity of upto 10,000 MW.

The sites identified for these energy parks are Kudankulam in Tamil Nadu, Jaitapur in Maharashtra, Mithi Virdi in Gujarat, Kowada in Andhra Pradesh and Haripur in West Bengal.
Besides this, indigenously developed 700 MW PHWR (pressurized heavy water reactor) technology is planned for Kumharia in Haryana (2,800 MW), Bargi in MP (1,400 MW) and Markandi in Orissa (6,000 MW). Some of the sites are under review in view of local resistance to such projects.

To take the nuclear cooperation to the next level, the NPCIL team has submitted a draft MoU to ONGC for review.

The salient features of the draft MoU state that NPCIL and ONGC intend to incorporate a joint venture with NPCIL having 51% equity and ONGC 49%.

Till the JV is formed, a steering committee will be constituted with two representatives each, for overall supervision and guidance.

The JV will build, own and operate nuclear power plants for energy generation at mutually agreed locations subject to approval of competent authority and establishment of techno-commercial viability. It will be managed by a Board of Directors. The chairman of the company will be from the directors nominated by NPCIL, being a majority share holder. The JV will be professionally managed and headed by a CEO, appointed by the Board of Directors.
The nuclear power plant operations and maintenance team will have officers and staff on deputation from NPCIL as well as ONGC.