Time to split more atoms
ASHISH GUPTA, Jul 26, 2008, Outlook Business

India is the best candidate to prepare the outdated nuclear regime for new challenges

The Prime Minister had staked his personal reputation on this issue, going as far as 'daring' the Left to pull the plug on his government. Now four years after the Congress-led United Progressive Alliance came to power, and three years after Manmohan Singh convinced the US not to treat India as a nuclear pariah, the Indo-US civilian nuclear agreement seems to be finally on course to fruition.

But few issues have evoked as much debate and acrimony as this one. This was the deal that threatened to topple the coalition and got the nation's intelligentsia burning the midnight oil on its viability.

Now, after several arguments and counter-arguments, what has become clear is that the agreement gives India a legitimate position at the global high-table, even without being a signatory to the nuclear non-proliferation treaty. It also gives India an opportunity to sneak past historical restrictions stemming from sanctions imposed after the country conducted its first nuclear test in 1974. What's more, it also helps India get access to best-of-its-kind technology, nuclear or otherwise.

"What is at stake is not only nuclear energy," points out Robinder Sachdev, Director of the Washington-based US-India Political Action Committee, "although that in itself is important." The immediate question, is can the deal be a sure-fire solution to the country's energy security needs? On this, opinion is clearly divided.

Exponential gains
"We must learn to differentiate the rhetoric from reality. Today it (nuclear power) contributes just about 3% to the country's total energy basket, and is unlikely to go beyond 7-8% by 2030," says V Ranganathan, economics professor at the Indian Institute of Management, Bangalore (IIMB). "Electricity from nuclear sources costs nearly 1.8 times that from coal, and hence, it will always remain a marginal player in the Indian energy scene," Ranganathan says.

Estimates by independent experts show that the price (per kilowatt hour or one unit) of electricity produced by conventional sources is around Rs 1.5-2. By comparison, nuclear power is more expensive at Rs 2.80-2.90 per unit. The nuclear power tariff from existing nuclear reactors (in Kaiga, Karnataka, and Tarapur, Rajasthan) range from Rs 2.70-2.85 per unit. And, it will be around Rs 2.90 once the under-construction Koodankulam reactor (in Tamil Nadu) goes on stream.

Despite the higher per-unit costs, there are those in the Planning Commission who argue that nuclear power is the way to go if the country has to consistently grow at 8-9% per annum over the next 22 years. In 2030, India will need to generate 800,000 MW or some 4,500 billion units of electricity. "That's a very tough task, as that means a five-fold increase in power generation in the next 20 years," says Anshu Bharadwaj, Director at the Bangalore-based Centre for Science, Technology and Policy.

The Department of Atomic Energy estimates that pressurised heavy water reactors (in the first phase of the nuclear energy programme) can produce some 10,000 MW of electricity from existing uranium resources (nearly 60,000 tonnes) for 40 years, at a plant load factor of 80%. The second phase, which uses plutonium (spent fuel from uranium recycling) and thorium (used as inputs for fast-breeder reactors) can produce 530,000 MW of electricity. Finally, in the third phase, where thorium reserves are mixed with plutonium (again, as spent fuel of fast-breeder reactors) it can produce a multiple of phase two output. "So, once we have enough uranium for our pressurised heavy water reactors, India's self-sustaining nuclear model can start functioning," says Pradeep K Dadhich, Senior Fellow, The Energy and Research Institute (TERI).

The third phase has other benefits too. It not only produces more electrical energy than it consumes, but also converts the highly radioactive waste into short-life radio-nuclides. "India thus will have a closed fuel path where inputs of the earlier system are used as inputs for the next. This means the amount of wastage will be minuscule and could be sensibly disposed off," Dadich says.

But Ranganathan of IIMB seems pessimistic. Despite 30 years of research, he says, India has failed to develop a reliable fast-breeder test reactor that can use the country's abundantly-available thorium to produce electricity. And, since no other country has so much thorium reserves (some 225,000 tonnes can be mined), it cannot expect to import such technology from abroad either.

"While the country was best-placed to develop the fast-breeder reactor, it has not been able to do so. And, in the past 35 years, it has only developed a prototype at Kalpakkam (near Chennai)," he says. One of the reasons for this delay could be because Indian scientists have yet to master the technology of using sodium coolant to ensure stability of metals at very high temperatures.

FISSION: Capital costs of a nuclear plant are really high, but its operating costs are low. And it's cleaner too

Again, since most inputs costs are not market-determined, it is virtually impossible to determine the actual cost of nuclear electricity vis-a-vis other sources of energy, Ranganathan says. Inputs such as uranium and reprocessed fuel are purchased by the DAE from PSUs, Uranium Corporation of India and Nuclear Fuel Complex, Hyderabad. "The price of nuclear energy is not a true reflection of its costs," Ranganathan points out.

Why nuke deal?
Even so, the high cost of nuclear power and the experimental stage of the fast-breeder reactor programme are not reasons enough to call off the nuclear deal, say experts across the spectrum. "Our energy needs will continue to rise in the foreseeable future. We do not have the luxury of limiting our options of energy sources. We therefore wish to create an international environment in which nuclear technology is used not for destructive purposes but for helping to meet our national development goals and energy security," Prime Minister Manmohan Singh said at a recent conference on nuclear disarmament in New Delhi.

DAE aims to ensure India has a nuclear power production capacity of about 20,000 MW by 2020. It plans to build a chain of fast-breeder reactors to produce another 20,000 MW by 2020 and is also setting up an advanced heavy water reactor to draw power from thorium, a first step towards the third phase of its nuclear energy programme. In short, it wants 26% of the country's energy generated in 2052-53 of 800 billion kilowatt hour to come from nuclear power.

That seems a necessity considering that power from hydro-electric, renewable, and even, coal-based sources may not fully satisfy India's guzzling need for more energy.

In fact, Bharadwaj of the Centre for Science, has, in a recent paper, shown that even if India were to exploit its hydroelectric capacity fully (at 150,000 MW from the current 33,000 MW), it would generate 500 billion kilowatthour, or about 10% of the country's needs. The options for hydro power are limited. It can be effectively utilised in only a few states such as Arunachal Pradesh, Himachal Pradesh and Jammu & Kashmir. "Tapping these sources would critically depend on addressing environmental issues such as land acquisition and resettlement of people, possible international agreements on water sharing and building high voltage transmission lines to distant load centres," Bharadwaj notes.

Large hydroelectric power plants also suffer from other shortcomings. They operate at a relatively lower plant load factor of 35-40% (coal plant is 80-90%) and the power production is critically dependent on the availability of water.

The scenario is similar with respect to wind energy. At around 50,000 MW of potential generation, it can contribute 2-3% or 80 billion units of electricity. "Again, wind is intermittent, has a low plant load factor of 20%, is location-specific and presents difficulties in grid-integration. It becomes difficult to rely on," Bhardawaj says.

Energy experts also believe solar and other renewable sources—such as biomass and bagasse—will continue to remain marginal contributors to India's energy in the years to come, although there are estimates that installing solar technologies on 1% of land area can almost double present generation. In the case of solar energy, none of the Indian companies dealing in solar power, such as Bharat Heavy Electricals, Tata BP and Moser Baer, manufacture silicon wafers, the basic input for photovoltaic cells. Hence, these have to be imported .

Second, producing solar energy requires huge tracts of land. For instance, a single MW of solar power needs some five acres. The electricity produced is also prohibitively expensive. For instance, the average cost of producing one MW of electricity through solar sources requires some Rs 20 crore, compared to Rs 5-6 crore for nuclear and Rs 4-4.5 crore for thermal energy.

Natural gas, according to the Planning Commission can provide only 16% of the total energy needs, despite the recent huge discoveries of gas in the Krishna-Godavari basin. Most of the potential natural gas will anyway be used as feedstock for the fertiliser industry, which has been burning the more expensive naphtha as fuel.

That leaves India with just coal as a source of cheap energy. Although India has some 248 billion tonnes in coal reserves, it is unlikely to meet all of its energy needs. In fact, a recent Planning Commission study says if the country continues to maintain the current rate of production (some 350 million tonnes per annum), the reserves can last for another 100 years. However, if the production were to increase by 5% annually to meet burgeoning demand, then the reserves will last for only 45 years.

"If coal were to continue to account for nearly 70-75% of India's energy in 2030, production will have to jump from the 350 million tonnes per year to a whopping 2.5 billion tonnes," Bharadwaj says. But coal's proven detrimental impact on the environment and the huge investment required for augmenting coal transportation—from the pithead to the power plants—means it cannot be the energy source of the future. So, there is little else but to turn to nuclear energy to meet the country's power needs.

Nuke saviour
"Out of the total demand of 100 GW of non-conventional energy required, 10 GW is planned to be added by 2011-12, about 56 GW by 2022-23 and the rest by 2052-53 if the DAE continues with its programmes and sticks to its time schedule," says 

RB Grover, Director, Knowledge Management Group, Bhabha Atomic Research Centre, and co-author of the study Scenario for Growth of Electricity in India.

Thus, the composition of India's electricity basket, under one possible scenario by 2053, will have coal producing 46% of its energy needs, oil and gas 16%, hydro 8%, non-conventional renewable energy 4% and nuclear 26%. "If India signs the international agreement and adds capacity aggressively, its share could go up to 10-15% in the next two decades and more in the years beyond," says Bhardawaj.

The best thing going for nuclear energy is that it is relatively inexpensive in the long run. The largest component of the cost of producing electricity through nuclear reactors is its capital cost, which is nearly 25% more than coal-based plants. But its operating costs are much lower, and it is far more environment-friendly than thermal plants. And, uranium prices are not as volatile as crude prices since there is no cartel controlling the commodity today.

The potential of nuclear energy is, however, limited by several constraints, including fissile material availability, site selection and design approval and industrial infrastructure for reactor construction financing and waste disposal.

Although no one is suggesting that nuclear power is the panacea to India's energy needs, it still remains a worthwhile option to pursue given the country's huge energy needs. And, if the nuclear deal can successfully be concluded, then importing nuclear fuels and reactors will become that much easier. The go-ahead from the US is a must if India is to be allowed to buy uranium from the 45-member strong Nuclear Suppliers' Group. Already, insufficient fuel has delayed India's civilian and military nuclear programme by at least two decades. Increased supply will not only help scale up India's power generation capacity, but also allow the DAE to focus on the development of fast-breeder reactors.

Not only that, the successful conclusion of the nuke deal will benefit India even in the realms of high technology: international cooperation in satellite launches, precision engineering, high-end sourcing or defence production will be that much easier. In effect, the Indo-US nuke deal will open many doors hitherto denied to India.