Economic Highlights

New Delhi, 18 March 2011

Power  Situation May Turn Critical

URGENT ENERGY SECURITY PLAN NEEDED

By Shivaji Sarkar

The tsunami has brought nuclear catastrophe to Japan but it is likely to take India several decades back in its energy security plan. Thus, it calls for a new power policy with stress on de-centralised renewable energy.

Importantly, nuclear energy has never been either a safe or economic option. The Fukushima tragedy has effectively proved it. Clearly, as the nuclear energy policy has to go for a review, limited availability of coal could trip mega power plans. An acute shortage of domestic coal is threatening to destabilise new power generation projects in which developers have already invested about Rs 75,000 crore.

The country has not shown much interest in creating clusters of renewable energy projects except for cosmetic purposes. It has reduced allocation for renewable energy research by Rs 42 crore from Rs 119 crore in 2010-11 to Rs 77 crore in 2011-12. The allocations on this head have been measly always.

The Labour Government in the UK has recently faced severe criticism for jettisoning alternative energy programmes and trying to promote large nuclear programmes largely on the coasts. The Government has been accused of collusion with large firms to promote nuclear energy at the cost of public safety. It has been blamed of sabotaging offshore alternative energy projects.

Though the Government in India has not done anything like that, yet its unwillingness to promote renewable energy sources on the plea that whether solar photo-voltaic or wind are not viable economic options raises questions about the intentions of the Government.

The thermal and nuclear power lobbies are strong enough to pressurise the Government to formulate policies in their favour. Plan after plan, the country has missed targets for creation of installed capacity. The Eleventh Plan would not be an exception and even it would be far from the target in the Twelfth Plan. By 2012, the Government has set a target of capacity addition of 78,000 MW. The addition would be less than half of it.

The country’s policy of reliance on large capital-intensive power projects is questionable. Many power projects are unable to meet their plant load factor (PLF). The overall PLF of thermal power stations during April-December 2010 at 71 per cent was less than what was achieved in 2009 at 76 per cent. A major reason has been the constriction on coal supply.

The new capacity of 15,000 mw is likely to be stranded for want of coal. Coal India Ltd (CIL) promised to supply 92 million tonnes of (mt) of fuel to these projects. Most of these were expected to be operational over the next one year. The CIL now says it can deliver only 13 mt. The available coal which needs to be blended with imported coal could produce barely 3000 mw of power.

The Central Electricity Authority (CEA) has told the power developer that it could not help them out. Even the import of coal would not be of much help. Domestic coal production could not increase as the Environment Ministry has not cleared 15 mining projects that could produce 210 mt.

The amendment to India’s nuclear law to facilitate US companies do business here is in their interest only. Being out of business in their home country, the Indo-US nuclear deal provided them a life-saving device. If New Delhi allows them to go ahead with light water reactors (LWR) of the Fukushima kind, it should remain prepared for the repeat, possibly a worse one, of the Bhopal-type tragedy caused by the US company, Union Carbide.

A major objection to such reactors has been their high requirement of water. It has been one of the reasons for erecting nuclear plants near the sea. But the risks that sea-side reactors like Fukushima face from natural disasters are well-known. Indeed, this became evident six years ago, when the Indian Ocean tsunami in December 2004 inundated India's second-largest nuclear complex, shutting down the Madras power station (MAPS). Even plants in Britain are situated just a few metres above sea level.

The nuclear plants are also not eco-friendly as they are touted to be. The huge quantities of water that LWRs consume for their operations become hot-water outflows, which are pumped back into rivers, lakes, and oceans raising water temperature telling heavily on aqua life.

Besides, the fuel, uranium, is in short supply from domestic sources. And international prices are high. Thus, its operation cost is higher and not low as the nuclear industry propagates. Another perpetual cost is managing the waste for at least 5,000 years. A difficult proposition that Fukushima blasts has exposed. Much of the Fukushima radiation is from the exposed waste dumps.

Indian nuclear operations so far are limited, whether in research or power projects. Further, these are operated by Government agencies, which adhere to high safety norms. The foreign companies compromise on these aspects for raking in high profits.

In the present Budget, there has been moderate rise in allocation to Rs 7602 crore from Rs 6534 crore. But the raise is mostly for research purposes. No proposal for generation has been made. It has to come, as per Government plans, from foreign investors along with all its risks.

As of now a thaw is certain. The thrust in the course of time has to be new energy sources. The claim that renewable alternatives are an illusion is at variance with facts. Germany has installed more wind power capacity than the entire current UK nuclear capacity and is adding to it at a rate equivalent to more than one new reactor a year. In 2009 alone Germany installed solar photo-voltaic systems with capacity equivalent to approximately four nuclear reactors, and it looks like the 2010 figures will be much higher.

India needs to learn from proper quarters and need not succumb to US pressures to formulate its power policy. The lack of thrust is preventing the alternative energy sector from thriving. Large companies and distributing agencies would of course not like the new energy concept as each housing cluster could create their own system and ultimately democratize the power sector.

This could also give rise to local level small service industries. This would again be an anathema for large monopoly houses. Limitation of natural resources, be it coal or uranium has to force mankind to look for dependable non-toxic energy options. The cartels may delay the process as they are doing in UK but they cannot prevent it.

In sum, India may remain a laggard again as it has been in many developments, if it does not learn from the experiences of countries like Germany. ---- INFA

(Copyright, India News and Feature Alliance)