Fuel crisis

IN one of its most damning reports on the Department of Atomic Energy (DAE), the Comptroller and Auditor General of India (CAG) has found that even though India has adequate uranium resources to achieve the target of 10,000 MWe with natural-uranium fired Pressurised Heavy Water Reactors (PHWRs), the widening fuel demand-supply mismatch and the consequent fuel crunch in the countrys nuclear power programme (NPP) are largely because of the poor planning and mismanagement of the fuel supply chain by the department.

The series of PHWRs (currently numbering 15) constitutes the first stage of the three-stage NPP whose basic premise is that with 10,000 MWe from PHWRs, sustained growth of nuclear power based entirely on indigenous resources, and thereby long-term energy security, can be achieved. Homi J. Bhabha, the founder of the Indian atomic energy programme, was also the chief architect of the three-stage development of nuclear power. The year 2009 marks his birth centenary, which the DAE is all set to celebrate. Coming at this juncture, the CAG report would be highly embarrassing for the department.

In an earlier article on uranium shortage (The Hindu, July 11, 2008) it was argued that the current situation was a consequence of inadequate funding for mining activities during the 1990s. While this certainly did contribute to the present crisis, the CAG report reveals that the DAE itself is to be largely blamed for its failure to take corrective measures post-2000 when funding was no longer an issue.

In his 2007 Founders Day address, Dr. Anil Kakodkar, Chairman of the Atomic Energy Commission (AEC) and Secretary in the DAE, stated: The present fuel demand-supply mismatch would not have arisen had [mining] projects been pursued in the same spirit with which Dr. Bhabha started activities at Jaduguda. This clearly is an indirect admission of that failure. But Kakodkar went on to say, [O]ur uranium exploration programme has seen a paradigm shift... and we should not rule out a PHWR capacity much larger than 10,000 MWe. Giventhe unprecedented programme thrust, I see no reason why this should not happen (emphasis added). The CAG report, however, makes it clear that such a thrust is just not there.

The DAE had originally (in 1984) set the target of 10,000 MWe from PHWRs to be achieved by 2000. In 1995, following funding cuts during the1990s, this was deferred to 2020. The revised milestone also formed part of the DAEs 1997 document Vision 2020. But the road map up to 2020, which was actually drawn up only in 2001, was incomplete as it did not fully address the fuel needs of PHWRs up to 2020, notes the CAG report. While there was no deficiency in planning for new PHWRs (from the 9th to the 13th Plans) to meet the target, the DAE did not link the availability of fuel while laying down the timeline for new reactors, the report has observed. It takes 10 to 15 years from the start of exploration until uranium becomes available for use. But even as the DAE planned for PHWRs, matching targets were not set for the front-end chain of the fuel cycle exploration, mining, processing/milling and fuel fabrication.

This is despite the fact that a committee constituted by the DAE in May 2000 for the assessment of uranium demand-supply for the 10th Plan concluded in its report of August 2000 that shortage of uranium may arise from 2003-04 onwards. The Report on NPP up to 2020, prepared by another DAE committee (December 2000), in fact, predicted a demand-supply mismatch to arise a couple of years earlier and called for matching actions on the nuclear fuel cycle front to achieve the 2020 target. Indeed, the capacity factor (CF), or the plant load factor (PLF), dropped from 80 per cent in 2002-03 to 50 per cent in 2007-08 because of non-availability of fuel.

During 1999-2002, the DAE sought approval for four new PHWRs Kaiga 3&4 and RAPS 5&6 at a cost of Rs.6,354 crore. The report points out that when the uranium committees report became available in August 2000, the approval of the Cabinet Committee for Economic Affairs (CCEA) and the administrative sanction for Kaiga 3&4 were pending. Likewise for RAPS 5&6, approvals by the Nuclear Power Corporation (NPC) Board, the AEC and the CCEA as well as the administrative sanction were all pending. However, notes the CAG, these projects were approved in spite of having knowledge that there was going to be a fuel shortage. But, more seriously, even though the Cabinet specifically sought clarification on the issue of availability of fuel, Cabinet clearance was taken despite the knowledge that these reactors would suffer for want of fuel and without adequately highlighting the shortage of fuel for these reactors in the Cabinet notes.

Further, according to the CAG, while seeking the AECs approval for the perspective plan up to 2020 in July 2001, the DAE had not established fuel availability linkages to the proposed PHWRs or made the specific disclosure that there would be a fuel shortage. When in August 2001, while approving the NPP up to 2020, the AEC raised a specific query regarding fuel availability for the proposed road map, the Chairman of the AEC and the Chairman and Managing Director (CMD) of the NPC affirmed that requisite action had been taken to accelerate fuel-related projects in order to ensure timely availability of fuel. But in reality, the proposed projects on the fuel front had been so grossly mismanaged that none of them could take off.

The DAE stated in its June 2008 reply that the decision to set up new PHWRs was consciously taken so as to ensure that the skill and manufacturing base within the DAE and outside did not get eroded. The CAG, however, has argued that though AEC and Cabinet notes did mention the need to sustain human resource and manufacturing capacity, the DAE had not made specific disclosures that after construction these reactors would suffer for want of fuel. Contending that the auditors conclusion on non-disclosure was injudicious, the DAE said that the fuel position until 2000 was satisfactory and new projects got sanctioned after due cognisance of the inventory position and planned actions for augmenting uranium production, like opening new mines in Domiasiat, Meghalaya. The fact, however, is that these planned actions of the DAE are yet to materialise.

The CAG also pointed out that the monitoring of fuel availability was being done both formally and informally through various committees and at the highest level but, interestingly, more in an informal manner. In response, the DAE stated that the monitoring was informal because of the sensitivity of the programme. From 10th Plan onwards, the DAE added, to accelerate the overall programme, emphasis was on programme mode instead of project mode and the 15-year programme was dovetailed to the 5-year planning process. The CAG has, however, argued that a programme is always implemented through various projects and cannot be viewed in isolation.

The report quotes from the minutes of a November 2006 AEC meeting wherein a former AEC Chairman had called for having periodic and detailed review of various material inputs to the NPP to which the present chairman agreed, and says: In hindsight if a formal mechanism had been in place, it could have probably anticipated [the demand-supply mismatch of inputs] and taken corrective actions. The report has further observed that the improved monitoring and strategic planning from the second half of 10th Plan (after the fuel crisis had erupted) has still not yielded results and the demand-supply mismatch of fuel continues to affect adversely the operation of the PHWRs.

Since the DAE Secretary is directly responsible for ensuring adequate fuel for the PHWRs and the AEC Chairman is required to monitor and direct the DAE to take corrective actions against management failures, the CAG has commented that the twin roles being assumed by the same person diminished the chances of owning up failures and taking remedial actions. Having a single person as head of both the DAE and the AEC may lead to a conflict of interest, the CAG has opined, and has recommended a relook at this policy, particularly when the country is going through a nuclear fuel crisis.

The uranium resources needed for the DAEs 2020 target of 10,000 MWe from PHWRs over their 40-year life is about 1,01,600 tonnes of the mineral uranium oxide U{-3}O{-8} (for equivalent amount of uranium metal, divide by 1.18). This is based on average values for burn-up, CF and electricity conversion efficiency in PHWRs, taken as 6,000 MWdays/t, 0.75 and 0.33 respectively, and on loss fractions during mining, milling and fabrication of fuel, taken as 0.15, 0.2 and 0.05 respectively. Of course, before the fuel crunch set in, the NPC was able to achieve higher burn-ups (of about 7,000 MWd/t) and higher capacity factors (of about 0.85).

The CAGs report on fuel management for the PHWRs has found that the demand-supply mismatch in meeting the targets set in the DAEs Report on the NPP up to 2020 is because of the departments deficient planning and monitoring of the fuel situation. This, in turn, has resulted in the agencies associated with the fuel supply chain the Atomic Minerals Directorate (AMD), Uranium Corporation of India Ltd. (UCIL) and the Nuclear Fuel Complex (NFC) failing to set appropriate milestones for themselves.

As of September 2007, the AMD had identified 1,07,268 tonnes of reserves (of U{-3}O{-8}) of which only 71,159 tonnes are economically viable. Between 1966 and 2007, the AMD handed over 27 deposits in various parts of the country, with a total resource potential of 93,259 tonnes, to the UCIL. Out of this, major reserves are from the Singhbhum belt in Jharkhand, which, according to the AMD, has an estimated resource potential of 47,809 tonnes as of 2009. In recent years, however, the rate of augmentation of reserves has dropped, the CAG notes. Though the DAE had set a target of 75,000 tonnes for the 11th Plan, as compared to 28,195 tonnes during the 8th Plan, augmentation dropped to 13,661 tonnes and 16,244 tonnes during the 9th and the 10th Plans respectively.

After evaluating the deposits handed over by the AMD, the UCIL carries out mining, processing and milling of ores to produce MDU (magnesium diuranate), or yellow cake. The NFC converts the MDU into uranium dioxide (UO{-2}) pellets and fuel bundles for reactors. The Jaduguda mine is the first uranium deposit in Singhbhum to be exploited in the country, where mining operations began in October 1967. Subsequently, many other mines in the region began production: Bhatin in 1986, Narwapahar in 1995 and Turamdih in 2003. But the ore produced from all these mines is processed in one mill at Jaduguda. Commissioned in 1968, the mill has an installed capacity of 6,27,000 tonnes per annum of ore.

The installed mining capacity of these four mines together is, however, 8,55,000 t/a of ore, implying a shortfall of 26.67 per cent in the milling capacity. Even though faced with a fuel shortage since 2006, the UCIL has been operating the mill at around 110 per cent capacity: this mining-milling mismatch has resulted in 93,472 tonnes of accumulated unprocessed ore (as of March 2007). More significantly, because of this mismatch, the UCIL operated its mines at 71-89 per cent capacities during 2002-07 despite the increased demand for fuel during this period. Further, the new opencast mine at Banduhurang, which was ready to produce 1,600 tonnes a day of ore from October 2006 and 2,400 t/d from April 2007, remained non-operational because of inadequate milling capacity.

Though the installed PHWR capacity increased from 2,500 MWe in 2002-03 to 3,580 MWe in March 2007, and the NPCs increased fuel requirement was known in June 2001 itself, enhancing of the mills capacity to 2,500 t/d was taken up only in September 2006. The above suggests significant deficiencies in the strategic planning process. As remedial actions were within the reach of the DAE, and were not contingent on any externalities, the situation was avoidable, the CAG has concluded. The new 3,000 t/d Turamdih mill, which was to start in March 2006 but has got over its operational problems only this year, should improve the situation.

As per the DAEs road map, notes the CAG, the UCIL had proposed mining and processing plants at Domiasiat (Meghalaya), Lambapur-Peddagattu (Andhra Pradesh) and Gogi (Karnataka) for the 10th Plan. Ores in these deposits are of better grade than those at Jaduguda. However, these have all now been rescheduled for completion only in 2012. At Domiasiat, for example, the AMD completed its detailed exploration in 1992. But the project activities did not begin even after 15 years though the plan was to develop the mine quickly and efficiently. Notwithstanding the long-standing opposition to the project from some sections of the local population, the UCIL took as long as 12 years to prepare the detailed project report and it took two more years for its revision. The Environmental Impact Assessment and the Environmental Management Plan were ready only in 2006.

There was also a three-year delay in obtaining clearances from the Ministry of Environment and Forests (MoEF), chiefly because the UCIL submitted incomplete applications, the CAG has noted. The UCIL also delayed filing the mining lease application until October 2001. This, according to the report, was one of the most significant delays in the project so far. The State government is yet to give its go-ahead, approve the mining plan and grant a mining lease. More pertinently, even as late as mid-2008, the DAE had not given financial sanction for the project. The CAG, therefore, doubts whether production at Domiasiat will commence even from 2012.

Similar is the fate of the Lambapur-Peddagattu and Gogi projects. The Lambapur deposits were handed over to the UCIL in 2001 and the DAEs road map envisaged mining to commence by 2006-07. But, according to the CAG, even after more than six years, work on the mines or the mill had not progressed because of delay in obtaining clearances from the MoEF and the State government. According to the DAE, however, though all the clearances were available, the UCIL had to wait because the decision of the National Environment Appellate Authority on the verdict against the MoEF clearance for the mine was pending.

Likewise, the Gogi project was to be completed by 2007. The CAG observed that the work had not begun in the 10th Plan and the AMD was yet to complete a detailed exploration of the site. According to the DAE, however, the economic viability of the deposit was yet to be established and there were external factors that were beyond its control. Observing that the DAEs current interventions had not worked, and the delay had already affected fuel supply adversely, the CAG has called for innovative decisions to solve the deadlock at these sites with better grade deposits.

However, following the failure to get these projects going, the DAE/UCIL decided in June 2002 to restart some mining and milling projects in Singhbhum, which had been shelved in anticipation of the Domiasiat mine: the Bajgata mine the exploration of which the AMD had completed in 1990 but which was closed because of a fund squeeze during the 1990s; the Mohuldih mine, which the AMD had handed over in 1989; and the 3,000 t/d Turamdih mill. The Bajgata project was to be completed by March 2008, but it was opened only in December 2008. The Mohuldih project was approved in March 2004 and was to start in 2008, but the project is yet to be completed. The DAE apparently took seven months to apply for the environmental site clearance and 16 more months to apply for the environmental project clearance. Even the DAEs administrative and financial sanction came only in March 2007. The Turamdih mill, the third revisited project, was also delayed by 33 months.

Even though the AMD had handed over proven reserves that were sufficient to meet the PHWR requirement up to 2020, the CAG found that the road map drawn up by the UCIL for uranium production was not commensurate with the requirements of the PHWR programme. It had planned the exploitation of only 46 per cent of the requirement during 2001-02 to 2007-08 and only 79 per cent for the period 2008-09 to 2016-17, and had no plans for the period beyond 2016-17.

Slippages and shortfalls in mining and milling naturally had a cascading effect on the further downstream activities of fuel fabrication by the NFC and reactor operations by the NPC. But, according to the CAG, both these agencies, instead of raising the red flag at appropriate times to signal the impending fuel crisis, diluted their own targets even as PHWRs were being commissioned as per the NPP up to 2020.

To produce enough fuel bundles for 10,000 MWe PHWR capacity, the road map laid down in 2001 required the NFC to replicate the existing 600 t/a fabrication unit with one each of same capacity during the 10th-11th and 11th-12th Plan periods respectively. Against this, the NFC had taken up in the 10th Plan augmentation of the existing unit to 850 t/a only, which is to be completed this year. The CAG has observed that the NFC capacity of 600 t/a was not commensurate with the projected requirement of fuel during 2005-06 and 2006-07. The gap ranged from 13 per cent to 56 per cent during these three years and, had the plants operated at 0.85 CF, the actual uranium deficit would have been 7 to 62 per cent during 2002-07. Had there been sufficient inflow of MDU from the UCIL (or elsewhere), the PHWRs could not have operated at full capacity owing to the inadequate installed capacity at the NFC, the CAG has commented.

The NPC apparently reduced its demand on the NFC, based on the expected supply rather than on the projected demand of the PHWRs. Consequently, the NFC also did not demand quantities of MDU commensurate with the actual fuel requirement. This resulted in the shortage of MDU being masked and not being projected adequately by the NFC. Setting watered-down targets leads to over-reporting of performance for power generation masks the real performance and impedes timely corrective action, notes the CAG report.