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Friday, September 30, 2022





BANGLADESH

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ROOPPUR NUCLEAR POWER PLANT


HIGH CONSTRUCTION COST TO DOUBLE POWER GENERATION COST

Staff Correspondent | Published: 00:40, Jul 18,2022

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The cost of per kilowatt power production from Rooppur Nuclear Power Plant in
Bangladesh will be 9.36 cents compared to 5.34 cents from a similar plant in
Tamil Nadu’s Kudankulam, India.

The high construction cost of Rooppur Nuclear Power Plant is said to be the
reason behind the excessive cost of would-be power production.    

In Bangladeshi currency, the production cost of per unit electricity from two
reactors of the RNPP will be Tk 7.94 while their establishment costs are $12.65
billion, according to a research released by Springer-Verlag GmbH, Germany,
earlier this year.

In Indian currency, the production cost of power from Kudankulam 3 and 4 plants
will be Rupee 3.93 since their construction costs are about $5.38 billion.

A research paper written jointly by academics Gour Gobinda Goswami and Umama
Rahman of North South University in Bangladesh and Mehdi Chowdhury of
Bournemouth University Business School in the UK estimated the levelized cost of
electricity from nuclear power plants using a financial model in both countries.

The levelized cost of electricity, or levelized cost of energy, is a measure of
the average net present cost of electricity generation for a generator over its
lifetime.

The university researchers made a comparative study on two power plants since
their construction and found them almost identical in terms of electricity
generation.

Both Bangladesh and India have taken financial and technical assistance from
Russia for establishment of the reactors.

Using the discounted present value method developed by Du and Parsons (2009),
MIT (2003; 2009; 2018), and Singh et al. (2018), the researchers noted that the
India’s levelized cost of electricity from power plant would be lower than that
in Bangladesh for several reasons.

The research finds that the construction cost is more than double in Bangladesh
compared to that in India; further, Bangladesh incurs an additional external
cost of $187.5 million, finds the research.  

Since Bangladesh is establishing its first nuclear power plant, it bears a setup
cost of different facilities like telecommunications, transportation, waterline
establishment and gridline establishment while Kudankulam 3 and 4 are India’s
25th and 26th nuclear power reactors, according to the paper.

It said that the cost per unit of nuclear power in Bangladesh would be 70 per
cent higher than in a comparable plant in India which was mainly because the
construction cost was more than double in Bangladesh than in India.

A part of the reason of high construction costs is 69 per cent higher cost of
interest during the construction of nuclear power plant here while the other
reason is 69 per cent higher overnight costs, observed the researchers.

Former World Bank Dhaka office chief economist Zahid Hussain noted that the
research paper could have been more meaningful had the researchers explained why
there was a big difference in construction costs of the reactors in two
countries.

‘The question remains unanswered though,’ he said.   

Zahid said that the research should give more information about Kudankulam 1 and
2 reactors built at a cost of $2.6 billion to produce 1,000 megawatts of
electricity by 2016 after their start in 2002.

That the RNPP’s two reactors have a capacity to produce 1,200 megawatts of power
but are almost five times more costly as shown in the research than Kudankulam 1
and 2 reactors built 10 years ago looks surprising, he added.

According to Policy Research Institute executive director Ahsan H Mansur, the
construction cost of the country’s first nuclear power plant was very high since
its contractor was appointed without any international bidding.

Terming the contract process not transparent, Mansur said that the country could
have produced the same amount of power at less than $3 billion.

He argued that the country’s debt sustainability would come under serious stress
because of loan repayment to Russia taken for the nuclear power plant.

The first installment of $569 million payment in loans is due in March 2027.

The researchers, however, hinted that the power plant would be profitable if the
government could sell out per kilowatt electricity at above Tk 7.94.

They said that in Bangladesh the cost of producing electricity was always higher
than the price of electricity.

The power sector had been subsidized by Tk 52,260 crore over the past 10 years
due to higher production cost against the lower sale price, they argued.

More about:

 * Bangladesh
 * India
 * Rooppur nuclear power plant

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