Many are questioning the rationale behind such a commitment as installing nuclear reactors manufactured by Westinghouse would overshoot the cost of Russian reactors already in operation at Kudankulam of Tamil Nadu.
Amit Bhandari, Energy Expert and India's leading think-tank Gateway House told Sputnik, "Considering the cost of a reactor that Westinghouse is building in the US, cost per megawatt works out to $7.5 million while the approved cost of Kudankulam Unit 3 & 4 is $2.9 million. So there seems a strong likelihood that the cost of Westinghouse reactors will exceed that of the Russian reactors in India." Russia's Rosatom operates two reactors at Kudankulam, in Tamil Nadu.
Meanwhile, one of India's major political parties — the Communist Party of India (Marxist) — is also skeptical of the viability of projects involving western nuclear reactors. A CPI (M) statement says "The cost of the AP1000 reactors are going to be prohibitive, just as the French Areva reactors to be set up at Jaitapur (Maharashtra). By a conservative estimate, it is going to cost more than USD 42 billion for the six reactors. The cost of power produced from these reactors is going to be unsustainable."
"Solar and wind energy are already cheaper than nuclear power in India — in this scenario, any new nuclear project has to be evaluated for its commercial viability, otherwise we risk ending up with a white elephant," says Amit Bhandari.
In January 2016, Finland's Fortum Finnsurya offered to supply solar power at a record low price of Rs. 4.34/kWh in India. Apart from Fortum, several other bidders have offered to supply solar power at less than Rs. 5/kWh. The wind energy tariff in India, on the other hand, ranges from Rs. 4.13-Rs. 6.60/kWh, depending upon the location.
The reactors were originally planned to be built in Gujarat, but opposition by locals over land acquisition forced the authorities to relocate the project to Srikakulam in Andhra Pradesh. However, resentment is high among locals in Srikakulam as well. Farmers have threatened to protest if their demands for a higher compensation are not met.