Power & the truth

The nuclear reactor at Koodankulam. - A. SHAIKMOHIDEEN

Energy security is again being dubiously touted as the key rationale for the nuclear deal.

IT is indeed strange that the United Progressive Alliance (UPA) government, propped up with the support of the Left parties, should choose to bring itself to the brink of a fall with its bid to press ahead with the controversial Indo-U.S. Civil Nuclear Cooperation Agreement, or the 123 Agreement as it is called, on the dubious premise of its importance to the countrys energy security.

The Lefts view, ever since the contours of the civilian nuclear cooperation were articulated in the joint statement of July 2005 by United States President George Bush and Prime Minister Manmohan Singh, has been that the envisaged deal is not a stand-alone agreement but is intimately linked to a wide-ranging strategic alliance with the U.S. that would undermine and compromise Indias sovereignty in foreign policy, national security and economic matters and that the government would do well not to pursue it.

With the collapse of the talks in the joint UPA-Left Committee constituted in September 2007 to go into the ramifications of the deal and the U.S. laws that govern it, in particular the Hyde Act (see box) energy security is once again being touted by the government, the Prime Minister in particular, and other top Congress politicians as the key rationale for the agreement. The government argues that since such an agreement is more likely to be realised under Bush than under any new entrant to the White House, the nations energy security is at stake if it does not sign the deal with the current U.S. administration. Clearly, the effort on the part of the Left to convince the government which seems more beholden to Bush than to its own people and Parliament about the inconsequentiality of imported nuclear power for the energy security of the country has not been entirely successful even when facts are as plain as daylight.

The issue of the importance of nuclear power in the energy security of the country has been analysed in these columns earlier ( Frontline, September 7, 2007). As noted therein, nuclear power will certainly form an essential component of the energy basket for long-term energy security, but that is achievable without resorting to a head-long rush to please Bush at all costs. The total installed power capacity at the end of May 2008 is 144,565 MW, of which nuclear power, with 4,120 MWe of installed capacity from 17 reactors, constitutes a mere 2.9 per cent. Thermal power accounts for the largest share of 64.6 per cent, with coal accounting for 53.3 per cent and the rest being largely gas.

The nuclear share comes from the two imported Boiling (Light) Water Reactors (BWRs) at Tarapur of 160 MWe each, built by GE in the 1960s, with which the Indian nuclear power programme began; the twin Pressurised Heavy Water Reactor (PHWR) systems at Rawatbhata, Rajasthan, with a total of 300 MWe, built with Canadian assistance during the 1970s; 11 indigenous PHWRs of 220 MWe each and two indigenous PHWRs of 540 MWe each. Five projects are under various stages of construction. These include three indigenous PHWRs of 220 MWe each and 2 x 1,000 MWe Light Water Reactor (LWR) system being built under Russian cooperation at Koodankulam, Tamil Nadu. These will add 2,660 MWe to the installed capacity by 2008 end. (The PHWRs that form the mainstay of the Indian nuclear programme use natural uranium, which has only 0.7 per cent of the fissile isotope uranium-235, and the imported LWRs/BWRs use uranium enriched to 3-4 per cent in U-235.)

Exploitable uranium reserves in the country can generate only 10,000-12,000 MWe through PHWRs but the plutonium derived from the spent fuel of the PHWRs can be burnt in fast breeder reactors (FBRs). Besides breeding more plutonium than they burn, the FBRs can also convert the fertile thorium (Th-232), which India has in plenty, into fissile uranium-233 when used as a blanket to the reactor core. U-233-based heavy water reactors can operate in a self-sustaining fuel cycle of burning U-233 and converting Th-232 into U-233. Thus nuclear power generation will be completely delinked from the limited natural uranium availability and will form the basis for long-term energy security. The above three stages form the basis of the Indian nuclear programme. The programme has already entered its second stage with the upcoming 500 MWe Prototype Fast Breeder Reactor (PFBR) at Kalpakkam, near Chennai, which should become operational by 2011. Indigenous Advanced Heavy Water Reactors (AHWRs) that will use U-233 as fuel and Th-232 as blanket, which will form the third stage, are already in an advanced phase of development.

The PHWR base by the end of the 11th Plan (2012) is expected to be 7,280 MWe, which means that the nuclear component with indigenous reactors will constitute about 3.7 per cent of the total installed electricity capacity of 195,000 MWe. The total generation by the end of the 12th Plan (2012-17) is projected to be 275,000 MWe, of which the nuclear component is expected to be 13,880 MWe, constituting about 5 per cent. This will include 2 x 500 MWe FBRs (besides the PFBR) and this would mean that by then the Indian nuclear programme would have truly entered the second stage.

Though the target for 2020 set by the Department of Atomic Energy (DAE) is 20,000 MWe, the actual generation achievable based on the indigenous programme is only 14,880 MWe. This is because the target includes 6 x 1,000 MWe LWRs from Russia, besides the upcoming 2 x 1,000 MWe at Kudankulam, which can materialise only if the NSG relaxes its guidelines as envisaged under the nuclear deal. If that indeed happens, and the international nuclear market opens up for India, the additional nuclear power that the DAE expects to get through imports by the end of the 12th Plan is 12,000 MWe (which includes an import of 2,000 MWe of nuclear power by the NTPC). This means a total of 25,880 MWe of nuclear power by the 12th Plan end.

Even in the optimistic import scenario following a successful nuclear deal and a favourable international trade regime, the nuclear component will constitute only about 9 per cent of the total installed power, which, from a near-term energy security point of view, cannot be termed critical by any stretch of imagination. As has been pointed out by many, including the Left, for short-term energy security it would make sense to set up thermal power plants based on coal (indigenous and imported) and imported natural gas. From this perspective, it becomes all the more imperative for India to become part of the proposed Iran-Pakistan-India gas pipeline, which the U.S. has sought to undermine through the nuclear deal. If some additional nuclear power can come through imports, without any attendant undesirable constraints, it would be acceptable, but that is not the case.

For the long-term, based entirely on the indigenous programme, a generation capacity of over 100,000 MWe by 2040 and over 200,000 MWe by 2050 is achievable, according to the DAE. This, of course, assumes that the second-stage breeder programme, which is at the pilot stage, will succeed and the third stage, which aims for a sustained high growth path based on thorium cycle, can be launched. If the fast breeder programme does not succeed, then the nuclear component cannot provide long-term energy security in any case.

If the DAE could access the international market, it could have overcome the temporary fuel crunch that it currently faces owing mainly to mining operations not having expanded commensurately with the growing power programme because of insufficient funding through imports. But with new mining and ore processing units having been commissioned last year, this uranium squeeze should ease. With further planned expansions of both mining and processing units, the position should become comfortable during 11th Plan itself.

With rising international uranium (oxide) costs market projections of $85-95 a pound (one kilogram is 2.2. pounds), notwithstanding the current temporary sharp drop owing to large-scale sale by the U.S. energy department the production cost of uranium from domestic poor quality ores (at $130/kg) has also become competitive.

There is also thus the question of the cost of nuclear power from imported nuclear plants and fuel. At a high capital cost of around $2 m/MWe (without interest during construction on borrowed amount), imported plants would be much costlier than indigenous ones that are being built at about Rs.7 crore/MWe. Processed fuel for LWRs (enriched to 3-4 per cent U-235) would have, in fact, a very high cost of around $1,700/kg. A 1,000 MWe LWR requires about 1,000 tonnes of fuel over its lifetime.

According to estimates by the Left, imported nuclear power would cost two to three times the cost of power from thermal plants and 1.5-two times the cost from indigenous nuclear plants. (Nuclear power, of course, can become competitive with thermal power if you valuate the cost of carbon emissions saved.)

Assuming that such large resources (required for importing 20,000 MWe of nuclear power by 2020) can be raised, the money would be better spent in widening the indigenous PHWR base at a faster pace by increasing the production of domestic uranium and by setting up new plants to consolidate the indigenous nuclear capacity for long-term energy security and gradual decarbonisation of the energy sector. Import is clearly not the option, especially if it is not critical for long-term energy security and does not come free of technical, political and diplomatic problems and constraints.