The 2400-megawatt Rooppur nuclear power project is likely to cost around $10 billion, more than three times the initial estimate of the government.
The project's Russian developer Rosatom has been dropping hints since last year that the cost may go up to $10 billion. A couple of years ago the government had estimated that the plant would cost between $2 billion and $3 billion.
The government and Rosatom have been saying that the cost of a power project like this cannot be specified before the entire project design is complete, which is scheduled to be done by the end of the year.
The government is in talks with Russia on financing the project, and its terms and conditions with a target to conclude the negotiation by November. Bangladesh is seeking 90 percent of the project financing from Russia. The loan will be repaid in 28 years with a 10-year grace period.
“We have not gone to the level of discussing exactly how much money would be required for the project,” said State Minister for Science and Technology Yeafesh Osman, who has been spearheading the project since 2009. “As of now, we are trying to understand the components of construction.”
But similar power plants being built by Russia in different countries are coming with a price tag between $10 billion and $13 billion.
In December last year, Russia's state-run nuclear power company Rosatom signed an agreement to build a 2,000MW nuclear plant in Jordan for $10 billion.
Current nuclear power plant price trend
|Finland||1200 mw plant||$6.5b|
|Hungary||1200 mw x 2 units||$3.5b|
|Turkey||1200 mw x 4 units||$20b|
|South Africa||1200 mw x 8 units||$50b|
|Belarus||1000 mw x 2 units||$10b|
|Vietnam||1000 mw x 2 units||$9b|
However, despite such a high cost, electricity generated at the Rooppur plant would actually be cheaper than that of coal-fired plants and a little costlier than that of gas-powered plants. This low cost is due to comparatively cheaper fuel and a long plant life.
“We will not accept any unrealistic pricing for this project,” said Yeafesh Osman when asked if he was aware of the global price trend.
“The IAEA [International Atomic Energy Agency] is with us and there is an international practice. We will do our part of exercise before we conclude the financing negotiations in November."With technical assistance from the IAEA, Bangladesh has already taken a few major steps towards implementing the country's first nuclear power project. Under a $500 million Russian loan, Rosatom began various studies since mid-2013 and completed several pre-construction steps.
The nuclear power project was conceived in the sixties and its site was selected on the bank of the Padma river in Rooppur back then.
However, there had been almost no progress in this regard, thanks to a lack of political will, until the Awami League came to power in 2009 with a pledge to implement the project. It is now one of the government's top-priority projects.
Last year, additional land was acquired at the plant site as the river had moved away from the original site in the last four decades.
Once operational, the plant would ensure significant energy diversity for the country which has so far been largely dependent on gas-based power. As the country's gas reserve is depleting fast, the government decided to build large coal-fired and nuclear power plants to ensure that the country's economic growth is not obstructed by an electricity crisis.
WHY THE COST HIKE?
"There is no universal answer to this simple question: What is the cost of an NPP [nuclear power plant] construction?” Alexander Uvarov, editor in chief of independent information site atominfo.ru told The Daily Star. This paper approached Rosatom with the query. The local office of the Russian company then forwarded Uvarov's message to The Daily Star.
According to Uvarov, the construction costs vary since all nuclear power plants are tailor-made.
Uvarov noted that type of reactor, site conditions and safety requirements directly affect the price. Using a powerful reactor would make each kilowatt of electricity cheaper than that of smaller reactors.
If the plant is located in an earthquake zone, the construction cost would go high. Additional safety installations would also add up to the cost.
In addition, lack of qualified nuclear power engineers, enterprises, employees would increase the project cost.
“So, what is the cost of an NPP construction? The French will remain for a long time global leaders in terms of [high] cost. Their reactors, which they build in France and Finland, will cost about 8.5 billion euro ... Other nuclear technology suppliers still try to keep down the cost ranging between 4 and 6 billion dollars per reactor,” he said, adding that in case of Rooppur, the price could be determined only after all terms and conditions for construction and development of nuclear infrastructure are finalised in the general contract.
3RD GEN REACTOR
Through the last two year's exercise, the government and Rosatom have agreed to use two units of Russia's latest third generation water-water-energetic reactor VVER-1200 in Rooppur. The first one would be installed by 2020-21, and the second one a few years later, while the physical construction of the plant begins next year.
The VVER-1200 has a service life of 60 years which makes the power generation cost very cheap. This reactor has four layers of safety, including core melt trap (or core catcher), passive system for heat removal from the reactor, and passive system for heat removal from the steam generator.
The core melt trap is the top safety feature to minimise consequences in case of severe accidents. Rosatom will supply the nuclear fuel and take care of the spent fuel rods.