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Why nuclear power still makes sense for India

LiveMint logoLiveMint 30-05-2017 Livemint

If one reads Jawaharlal Nehru’s speeches and missives, it is hard not to notice his obsession with atomic energy and what he described as the “atomic age”. The warmth between Nehru and nuclear physicist Homi Bhabha ensured that the country’s nuclear aspirations received early flight. The patronage broadly sustained even after Nehru but the total installed capacity of the reactors operated by Nuclear Power Corporation of India Ltd (NPCIL) is just 6,780 MW—a little over 2% of power generated from all sources in the country.

In a bid to improve these numbers, the Union cabinet, earlier this month, approved the construction of 10 nuclear reactors that are expected to add 7,000 MW to India’s nuclear capacity. An additional 6,700 MW will be added by reactors already under construction. There have also been reports indicating that India has been delaying the signing of the Memorandum of Understanding (MoU) with Russia on the construction of reactor units 5 and 6 at the Kudankulam Nuclear Power Plant. New Delhi has reportedly made the signing contingent on Moscow being able to persuade Beijing on India’s entry into the Nuclear Suppliers Group (NSG). Interestingly, India has threatened, the reports add, to go for a completely indigenous nuclear programme in future if its entry into the NSG is not secured in the next couple of years.

It is evident that the Narendra Modi government is giving a strong push to the indigenous nuclear industry: This is the first time that 10 reactors have been approved in one go. A push this big also makes sense as it gives domestic suppliers sufficient scale to operate on, thus decreasing their costs. It will also, hopefully, serve to avoid the protracted delays that have been repeatedly countenanced in building reactors in India. In a 2009 paper, The Indian Nuclear Industry: Status And Prospects, M.V. Ramana had pointed out that the delays have been due more to the fact that there haven’t been enough orders to make manufacturing economical than to the deficit in “technological base and knowledge”.

The indigenous push will also eschew the problems related to nuclear liability law that the foreign reactor builders persistently complain about. While the partnership with Rosatom, the Russian nuclear corporation, has been relatively smooth, the Indian government had to put out a creative interpretation of its own nuclear liability law to convince General Electric Co. and Westinghouse Electric Co. The former remained unpersuaded and the latter has now filed for bankruptcy in the US. The deal with the French reactor supplier Areva SA is stuck at the stage of tariff negotiation.

The road to indigenization, however, is not that easy. All the 10 reactors the cabinet has recently approved for construction are pressurized heavy water reactors (PHWRs). Even though the PHWRs are expensive, the department of atomic energy persists with them because it lacks the expertise required to build and operate cheaper light-water reactors (LWRs). The imported LWRs are more expensive than the domestically built PHWRs.

The economics of the global nuclear energy industry has gone a little awry after the Fukushima nuclear accident in 2011. India’s nuclear liability law, which is out of line with the international standards, doesn’t help either. Heavy insurance premiums have to be paid up first, inevitably resulting in higher tariffs. It should be mentioned at this point that the safety concerns around nuclear reactors are grossly exaggerated and not supported by scientific evidence.

Indigenization does indeed make sense but some people—in light of Germany and France deciding to phase out nuclear power plants—question the wisdom of embracing nuclear energy in India. They cite falling costs and increasing capacities of solar and wind power as against the rising costs and safety concerns of nuclear power. This, however, is a false comparison. Unless cheaper storage options are discovered, neither solar nor wind energy can meet India’s base load demand. As a clean energy source, nuclear is best suited to gradually replace coal, especially at a time when the government is simultaneously trying to reduce peak demand—the monumental programme to replace wasteful old lamps by 770 million LED bulbs is a case in point. Hydropower is another option for base load but like nuclear power it too has met with resistance from activists around the world, including in India.

If India is able to build these 10 PHWRs quickly enough, it would have proved its mettle in reactor building and should then also consider exporting the technology to other developing countries. To meet domestic and foreign power requirements, India should infuse more energy into the sector by divesting NPCIL. What started with Nehru and Bhabha should end with Nehru and John Kenneth Galbraith. In a letter to chief ministers dated 14 October 1956, Nehru had articulated his apprehensions of private monopolies in the West controlling atomic power. And in another letter dated 27 June 1961, Nehru expressed his annoyance at the criticism of India’s economy as “post office socialism”. The phrase was coined by Galbraith, a renowned economist who also served as the US ambassador to India, whose definition of India’s public sector enterprises as firms which “operated at no profit, hopefully no loss, with no particular efficiency and with no clear purpose in mind” fits NPCIL almost perfectly. Decades later, the burden of a public sector monopoly in atomic power is certainly obvious.

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