India’s ‘stage three’ fantasy
India's leading private-sector engineering-and-power interests are currently looking at the nuclear power push as a tantalising new income stream. Following the contentious 2008 US-India nuclear deal, international trade restrictions were lifted for India on accessing nuclear supplies despite the fact that it remained outside of the purview of the Nuclear Non-proliferation Treaty. Since then, a host of interests have begun fervently planning for investment in manufacturing for the nuclear-energy sector. These include the Indian private sector (Larsen and Toubro, Reliance Power, GVK Power and Infrastructure, and GMR Energy), the public sector (Bharat Heavy Electricals, the Nuclear Power Corporation of India Limited and the National Thermal Power Corporation), as well as international groups (including Areva, GE-Hitachi, Westinghouse and Atomstroyexport). Indeed, the India-US nuclear deal has done much to re-energise the nuclear-power debate the world over. India (along with China) subsequently finds itself at the centre of very ambitious plans for an international nuclear-power revival, meant to satiate their respective demands for power. Ten of the 14 new nuclear reactors are in Asia, as are 19 of the 35 units under construction worldwide.
The international nuclear industry, quite naturally, is using every opportunity to make optimistic announcements about this 'nuclear renaissance'. The World Nuclear Association, a suppliers' group, said in late 2008:
It is noteworthy that in the 1980s, 218 power reactors started up, an average of one every 17 days. So it is not hard to imagine a similar number being commissioned in a decade after about 2015. But with China and India getting up to speed with nuclear energy and a world energy demand double the 1980 level in 2015, a realistic estimate of what is possible might be the equivalent of one 1,000 megawatt unit worldwide every five days.
In fact, such an estimate is a pipe dream. The world in the upcoming decade will be a radically different place from that of the 1980s, when the heavy early investments in nuclear power finally began to pay off. At that time, nuclear waste was treated simply as a problem that could be contained and deferred, the costs of reactor decommissioning were kept off balance sheets, and the nuclear industry was considered a 'sunrise' industry – almost glamorous, and a magnet for the world's young scientific talent. That world is today long gone, due particularly to the triple crises of climate change, the failure of a dominant economic model, and the shocks to agriculture and water systems. Besides, the energy sector now has new players, methods and sources beyond the old coal, hydro and petroleum-based plants – modern natural gas, combined heat and power (also called cogeneration, it is the simultaneous production of electricity and heat from a single fuel input, which steeply raises the efficiency of fuel use) and a host of renewable energy technologies. New sources and technologies, excluding hydro, can supply power quickly, be scaled to need and be built close to demand points, factors that nuclear energy cannot match.
Today, India's public-sector nuclear research-engineering-and-fuels establishment remains heavily funded and unquestioningly supported by the central government. Yet to what end, exactly, is unclear. After all, since 1985, the growth in installed generating capacity at nuclear power stations has been far outstripped by both gas and renewables (see Chart 1). Writing about the 2008 nuclear deal in August of that year, Surendra Gadekar, a physicist and anti-nuclear activist, offered insight into a potential answer: "The enthusiasm for the deal in the United States, France and other countries comes from their moribund nuclear construction industries, which need new reactor orders to survive." Gadekar went on to note,
The deal is certainly not an economic move for New Delhi – the cost of the nuclear electricity produced by imported reactors would likely be 50 per cent more expensive than the electricity produced by Indian-designed nuclear reactors. But the present Indian leadership is willing to pay this price in order to end decades of international nuclear isolation, and because they feel it will lead to a closer strategic relationship with Washington.
Thorium dreams
In the few years prior to the 2008 US-India deal, the international nuclear industry had already begun to mobilise around another 'opportunity': climate change, given that a nuclear power plant emits almost no carbon dioxide. Yet the Indian nuclear establishment's attitude to environmentalism has never wavered from disdainful intolerance. In a July 2008 presentation, Anil Kakodkar, the chairman of the Atomic Energy Commission of India (AECI), continued to present the planned 'third stage' of the Indian nuclear programme as a substitute for the atomic scientists' favourite whipping boy – coal as fuel. What is this 'third stage' to do for India? In a policy paper, the Department of Atomic Energy wrote that whatever else happens, "it remains a certainty that thorium-based nuclear energy systems will have to be a major component of the Indian energy mix in the long-term."
The inclusion of 'thorium' in that statement is significant. India has very little uranium, and what little there is of it is of low quality. What India does have is plenty of the element thorium, about 32 percent of the world's deposits. The trouble is thorium cannot fuel a nuclear reactor by itself; it takes a running uranium- or plutonium-fuelled reactor to convert thorium-232 into fissionable uranium-233. While the nuclear industry says that thorium ore generates less waste during processing than does uranium, in fact its proliferation, waste, safety and cost problems differ only in detail from those of uranium. Meanwhile, India has experimented with reactors that can use thorium (so-called 'breeder' reactors) for several decades without coming closer to the commercialisation and widespread exploitation of the country's vast thorium deposits. Nonetheless, this is the goal that the 'third stage' is specifically designed around.
Thorium is central to the 'third stage' in India's nuclear-energy evolution, at least as currently planned. In an April 2008 document, the Indian government clearly described these three stages. Following the late-1950s understanding by the Atomic Energy Commission of the economics of electricity generation from nuclear reactors, three forms of nuclear technology were foreseen for the country's electricity needs: reactors that would use locally sourced uranium and plutonium; more advanced reactors that would utilise plutonium as well as those that used thorium to create uranium; and, finally, the 'third state' of reactors that would solely use thorium to create fissionable uranium.
For all of the excitement that the ostensibly forward-looking discussion of 'third stage' new technologies, there are many critics of the new generation of nuclear reactors. Amory Lovins, a well-known American environmentalist and green innovator, brings to the 'new nuclear technology versus new energy technology' debate a degree of practical judgement, an important perspective for the brewing debate in India. "Any new type of reactor would probably cost even more than today's models, even if the nuclear part of a new plant were free," he writes. "The rest two-thirds of its capital cost would still be grossly uncompetitive with any efficiency and most renewables." He uses a rule of thumb for the US, where building what is needed for the containment and waste processing accounts for the two-thirds, this makes nuclear power uncompetitive even if the nuclear technology part is discounted completely. Over in India, self-reliance was the cornerstone of the Indian nuclear enterprise; and in front of this concept – which did in fact motivate what Gadekar has called "a truly Herculean effort" – costings became irritants at best. After all, there is a 50-year-old tradition at work here: during the late 1950s and early 1960s, nuclear energy consumed almost a third of the entire Indian state research budget for science, which allowed for the indigenous development of a host of required technologies.
Yet what Indian policymakers seem to continue to misunderstand is that the energy world for the coming decade is shaping up to be altogether different from what aging and politically protected nuclear establishment is used to. Most renewables beat new thermal power plants in terms of sustainability, environmental and economic considerations. Even more straightforward, creating systems for energy efficiency and supporting them with legislation is simply cheaper than running any nuclear- or fossil-fuelled plant. In fact, improved efficiency, micropower and distributed generation (small-scale power generation, usually based on biomass, that serve rural villages) now provides at least half the world's new electrical services, adding tens of times more capacity each year than does nuclear power. In fact, finding and making efficiency in power consumption as well as generation can equal building new power plants at a fraction of current cost. One estimate is that if fuel use (control wastage), generation, transmission (control losses) and consumer use were made as efficient as they could be, it would be the equivalent of adding 35,000 MW to India's power capacity. That compares very favourably with the existing 4,100 MW of nuclear power. In many ways, there is no longer any race for the best in centralised power-generation options – for 'centralised' has been overturned.
Tepid renaissance
Today, about 30 countries operate commercial nuclear fission power plants. During 2008, these collectively provided around 2601 TWh (terawatt hours electric energy), down more than two percent from 2006 figures. Amidst the ever-increasing international energy demand, the contribution from nuclear energy to the total pool decreased from 18 percent in 1993 to 14 percent in 2008. "In contrast to the often-repeated statement that the world is in a phase of a 'nuclear renaissance', the data show a very different picture," says Michael Dittmar, a physicist and researcher in Switzerland. "In fact, 2008 marks the first year since 1968 when not a single new reactor was connected to the electric grid."
This is not to say that new construction is not taking place. According to the International Atomic Energy Agency (IAEA) database, 47 reactors are currently under construction around the world. On average, roughly 10 reactors per year are projected for completion over the next five to ten years. While such a rate would actually be a substantial increase compared to the past 15 years, this number is in fact far lower than 25 years ago, when 33 new nuclear reactors were started up each year. Furthermore, Dittmar says that nuclear energy currently comes from 436 nuclear fission reactors, whose average age is about 25 years. About 130 reactors are between 30 and 40 years old, and many are bound to be decommissioned during the coming decade.
India's Department of Atomic Energy (DAE) – whose annual budget for 2009-10 is INR 60.3 billion (a INR 2 billion increase over the previous year) – believes that the nuclear renaissance has already begun. Or has it? The receipts from sale of power for 2009-10 are budgeted at INR 13 billion, but they were INR 15 billion in the 2008-09 revised budget, having been first estimated at INR 21.2 billion for that fiscal year. That means that sale of nuclear power is earning less for the DAE than planned. That information has yet to be made public, and although on paper there exists 4120 megawatts of installed nuclear generating capacity, the reality is clearly somewhat different. Meanwhile, what has the Indian government budgeted for renewable energy, whose adoption has soared over the past two decades? For 2009-10, the Ministry of New and Renewable Energy has been allocated INR 6 billion. These numbers on the mix of electricity production speak for themselves. As of April 2009, installed generation capacity in India was reported as follows: thermal power, 94,025 MW (coal accounting for 77,948 MW); hydro, 36,877 MW; renewable energy sources, 13,242 MW. And nuclear, as noted – 4120 MW. After 54 years in existence, with the nuclear programme's twin objectives of marrying technological self-reliance with providing India with the power it needs, it delivers less than three percent of the country's power.
The constraint, says the DAE, goes back to India's limited uranium resources. But here again arises the looming potential of the vast thorium reserves, thought to be about 300,000 tonnes. According to official data, the uranium available for power generation in India is about 60,000 tonnes. Here is where the calculations of the DAE and the AEC become truly ambitious, with plans that span generations. If all this uranium was used in pressurised heavy water reactors (PHWRs, which is the dominant reactor technology in India at present), it could produce nearly 330 GW (330,000 MW) of power. On the other hand, the DAE estimates, the same amount of uranium fed through thorium-using breeder reactors could provide some 42,200 GW – a theoretical extrapolation that is a giddy 285 times India's 148 GW present installed generation capacity. From there, the DAE estimates verge on the ecstatic. Through even more-specialised reactors, India's thorium reserves "could produce about 150,000 GW, which could satisfy India's energy needs for many centuries."
In practice, since 2002, all forms of renewable energy have added 11,614 MW of generating capacity. During the same period, capacity from gas-fired power plants has risen 3713 MW, while nuclear has added 1400 MW. According to the DAE schedule, in 2009 alone, a total of 2416 MW of commercial generating capacity is to be added (see Table 1). Yet even that massive planned addition – the biggest ever increase in nuclear India's generating capacity – will be outstripped in less than two years by new renewable energy sources, many of which will be localised and whose capital costs are dramatically lower than for nuclear power.
This last point remains critical. Cost was the most important factor 50 years ago, when developing-country budgets were tight but independent India looked to science and technology achievements to demonstrate its capabilities to the world. It is still important today, when public-sector funding has many more competing demands. The international nuclear industry usually begins a cost explanation by saying that nuclear power plants have a 'front-loaded' cost structure, in that they are expensive to build but inexpensive to operate. According to this logic, existing well-run nuclear plants are a competitive and profitable source of electricity. Yet the IAEA cautions that for new constructions, economic competitiveness depends on a host of factors: "on the alternatives available, on the overall electricity demand in a country and how fast it is growing, on the market structure and investment environment, on environmental constraints, and on investment risks due to possible political and regulatory delays or changes". However, those factors come into play for renewable energy technologies too – for solar power, wind turbines, geothermal and biomass – all of which make best use of scale and location to stay competitive.
Others suggest that the most important element is assessing a nuclear project's economic viability is the cost of the electricity produced relative to alternative sources of electricity when the plant actually begins to produce. The DAE says that the commercial performance of India's most common reactors is as follows: capital cost of USD 1700 per kilowatt, whereas the global range is USD 2000-2500/kW; average construction period is five to six years; and unit energy cost is USD 60/MWh, while the global range is USD60-70/MWh. The relevant experience with the Tarapur 3 and 4 reactors, for instance, bears this costing out, albeit with a twist to the tale. These two plants were initially estimated to cost INR 24.3, later revised to INR 64.2 billion. Construction on both began in 2000, and both began producing in 2005. But the comptroller and auditor-general have both pointed out that, excluding interest, "the estimated cost went up by 99 per cent." Yet the per-kilowatt capital cost for both Tarapur 3 and 4 is still said to be about USD 1640, well within the USD 1700 that the DAE had deemed reasonable at the outset.
How credible are these figures – and, indeed, how credible are the costs more generally of electricity generated by India's nuclear power plants? In a paper from March 2006, researchers M V Ramana and J Y Suchitra emphasise that the largest component of the cost of producing electricity at nuclear reactors is the capital cost of the reactor, which includes construction costs. Ramana and Suchitra estimated the costs for four nuclear reactors in Karnataka (Kaiga 1-4) at INR 18.2 billion for the first two and INR 2.7 billion for the latter two. They then compared these costs with that of the Raichur thermal power plant, also in Karnataka, which was just INR 4.9 billion, and found that it was only at a real discount rate of about 2.8 percent for Kaiga 1 and 2, and at around 3.8 percent for Kaiga 3 and 4, that the nuclear power plants became competitive. The discount rate is a measure of the value of capital, and given the multiple demands on capital for infrastructural projects, including for electricity generation, very low discount (lending) rates are not realistic. The rates computed for Kaiga are well under the rates banks and financial institutions would lend at, which currently stand at over 12 percent.
Coal vs neutrons
The Indian nuclear sector's response to such cost comparisons is to opportunistically tweak the numbers. In 2006, the Nuclear Power Corporation of India Limited (NPCIL, the country's only nuclear power utility) carried out a study on the long-term effectiveness of nuclear energy in the country. The convener of the study committee, A K Nema, concluded:
While nuclear power plants suffer from high capital cost due to high standard of safety requirements and internalisation of cost to control environmental releases, thermal power plants (TPPs) suffer from huge transportation cost of coal or other fuel. Also many thermal power stations in developed as well as developing countries are not meeting the current international control measures for emission of green house gases, oxides of nitrogen and sulphur. Any measures for implementing these standards would increase the capital costs of the TPPs, making nuclear power a clear favourite.
The NPCIL committee carried out its cost analysis focusing on plants with capacity for both nuclear and thermal energy, which would be commercially available in the year 2004-05. It took base capital costs (at 1997-98 prices) of INR 52.3 million per megawatt for nuclear plants, and INR 37.5 million per megawatt for thermal plants. But the NPCIL comparison was loaded in important ways against the thermal competitor; for instance, assuming the thermal plant to be 1200 kilometres away from the coalmine (a theoretical distance that seems to have doubled over the decades), and thus factoring in the costs to transport the coal over this distance. There were several other biases weighted in favour of nuclear production. Ramana and Suchitra say that such comparisons include the high cost of environmentally sensitive disposal of fly ash (the waste of coal-powered energy production), but do not include the very significant costs of dealing with radioactive waste.
Although reprocessing costs in India are lower than the corresponding figures for plants in Europe, the US and Japan, this is still not likely to be an economically viable method of waste disposal. And since the fuel for breeder reactors is obtained through reprocessing, this will only increase the costs of producing electricity at these reactors. Furthermore, electricity from breeder reactors – which remain the key element of the DAE's nuclear plans – is certain to be very expensive, given higher 'front-loaded' costs due to safety standards that are more stringent than those for the PHWRs. The fact is, the industrialised countries have abandoned breeder reactors as unsafe and uneconomical, even as they evolve as the corner-stone of the DAE's plans.
India's safety record for its nuclear power plants is alarming, and is by itself a strong argument to phase out nuclear energy. The nuclear establishment has become subordinate to the Department of Atomic Energy to such an extent that the watchdog agency, the Atomic Energy Regulatory Board (AERB), has been crippled at least since the early 1990s, when the Tarapur plant near Bombay leaked radioactivity from faulty cooling systems. The safety incidents, few of which have become publicly know, are serious enough by themselves with genetic disorders recorded in populations living near the Rawatbhata power plant in Rajasthan, the sea near Kalpakkam in Tamil Nadu, and the most serious that we know of so far, the people in the western Uttar Pradesh city of Narora, where a fire broke out in the power plant in March 1993. The last major incident to be made public was the shut down on 22 April 2004 of the 220 MW Kakrapar-1 reactor in Gujarat on orders by the AERB because of "weakness in safety culture". A Gopalakrishnan, a former chairman of the AERB, had said in a statement in 1996: "The current safety status of some of the nuclear installations under the DAE is a matter of great concern to all. The fact that such a large set of serious safety issues have accumulated over the years is the result of an accommodating and captive regulatory agency which has made compromises all along in the past, under the control, influence and interference of the Department of Atomic Energy." That indictment should have hit India's nuclear programme like a thunderbolt, but 13 years later, little has changed.
At a time when the Ministry of Power and electricity regulatory authorities in India are planning the shape of the 'open access' model for electricity consumers – wherein every consumer will have the option of choosing an electricity provider other than the distribution licensee for the area as a means of encouraging power distribution companies to perform more efficiently – the nuclear power sector remains utterly opaque. Data has been famously unreliable, both technical and economic, in utter contrast to the renewables sector. The Indian nuclear establishment refuses to acknowledge this lack of transparency. What we do know is that NPCIL plans to set up 'nuclear parks' in several places throughout India, hosting multiple 'new generation' reactors and generating perhaps 10,000 MW at each location. Meanwhile, hard new questions about the technologies are being simply ignored. For instance, in February 2009, Greenpeace announced that it had evidence that nuclear waste from the European Pressurised Reactor (EPR) – the new flagship generation process of the nuclear industry – will be up to seven times more hazardous than waste produced by existing nuclear reactors.
At this point, the options for India could not be clearer. The percentage of renewable energy in the total fuels mix must be increased steadily, for which it is vital to get the support of the public and of industry. When individual households and settlements can be encouraged to adopt decentralised and sustainable electricity production, only then will consumers be provided real localised alternatives that are free of the hazards of nuclear power and of coal burning. Such feed-in systems, for example, exist in Germany where consumers are allowed to connect their own renewable sources of energy, such as wind turbines or solar panels, to the public utility, selling the excess energy produced. South Africa is also currently framing by-laws to allow this. The growing commercial reality is that wind, micro-hydro, solar, biomass and geothermal energy are both quick and cost-effective alternatives, which could deliver a significant percentage of India's requirements. There are no technological, economic or political compulsions that need to chain Indian electricity consumers to a hoary atomic dream.
~ Rahul Goswami is a freelance journalist and researcher based in Goa.