Economic Highlights

New Delhi, 18 September 2008

Nuclear Power

WINDFALL FOR FOREIGN FIRMS

By Shivaji Sarkar

International nuclear companies are keenly looking towards India to give their sagging business the much-needed boost. If viewed carefully, the Indo-US nuclear deal will benefit them more than the Indian business houses, despite technically throwing open the global roads to them. And so the western, primarily US players are bracing up for a share in the $100-billion nuclear energy opportunities’ pie.

Clearly, the western power agencies were keen to see the Indo-US deal through. They have been campaigning that the deal would fuel a host of businesses from spin-offs, for Indian business, in technology transfers to erection of plants. It would, they aver, create opportunities for both small and big enterprises.

However, the major beneficiaries of the deal are likely to be the US-based GE, French Alstom, among other players like Areva, Thorium Power, and Westinghouse Skoda Power and Russia’s Atomstroy Export once the Atomic Energy Act 1962 is amended. The atomic sector has since 62 been in Government control and the Nuclear Power Corporation of India (NPCIL) owns N-generation, assisted by a host of Government organizations and a few private ancillary units.

On the Indian side, the business tycoons which have shown interest are Ratan Tata and Anil Ambani. The indirect beneficiaries are likely to be the public sector National Thermal Power Corporation (NTPC), BHEL-NPCIL and L&T.  All want to ride piggyback on some or the other foreign company.

For instance, Tata Power is keen to enter with Areva for supply of N-generation equipment, Reliance Power with NPCIL, GE, Areva and Atomstroy for manufacturing N-plants. L&T is talking to GE and Westinghouse, while BHEL-NPCIL is looking for a joint venture on technology with Alstom for steam generators. BHEL is also in talks with Areva, while NTPC wants to set up N-plants with Thorium Power and GE.

In the given scenario, the western and US companies hope to capture a sizeable share of the Indian civil N-sector, says President of US-India Business Council (USBIC) Ron Somers. Ratan Tata says, “We have indicated our interest”. Anil Ambani says, “We will develop 2000 mw N-power”.  And, the small Indian ancillary units, suppliers to NPCIL and BARC hope to benefit as the business grows.

India’s nuclear era began soon after Independence with Jawaharlal Nehru clearing in the ‘50s the setting up of the first experimental reactor – Apsara, still functional at the Bhabha Atomic Research Centre in Mumbai. Few recall that Vienna was chosen as headquarters of the International Atomic Energy Agency (IAEA) thanks to the casting vote of Homi J Bhabha, who pursued his passion for music along with the meetings held in the city. And, except for the initial nuclear plant at Tarapur, which was set up with the US and Canadian assistance, all other plants were set up in the country with indigenous skill and technology since Pokharan I test in 1974. Together they contribute about three per cent of the energy requirement, a mere 3900 mw. Would we gain?  

Well, the global nuclear business industry is the throes of a crisis thanks to anti-nuke lobbies. There is a virtual cap in the West on making additions to N-energy capacity owing to the complicated radiation waste disposal problems. A case in point is that of France. In the 70s, nuclear energy contributed to 70 per cent of its energy needs, which today have been reduced to roughly 61 per cent. The West no longer accepts it as clean energy as the waste remains radiation active for almost the next 10,000 years and involves huge costs.  

What about us? The radiation waste disposal graveyard is presently situated in a secure place in Mumbai. It eats up a sizeable budget for atomic energy. If there is proliferation of private N-plants, it is doubtful the graveyard would be able to absorb all the dangerous waste.

Another aspect that few have taken note of is the land requirement for N-plants. Each plant requires about 1,000 to 1,500 acres. But an area in a six-km periphery has to be sanitized to ward off the impact of a possible radiation leak. Where would the land come from? Would it not create many Singur-Nandigram like situations?

This apart, it is certainly incorrect to suggest that N-energy is cheap. The installation cost at Rs 7 crore per mw is quite high, wherein thermal and hydro energy costs less than Rs 5 crore per mw. Besides, the gestation period is longer. While a thermal plant can come up in three years, an N-plant takes six to seven years. In addition to this cost, add another one of the high waste disposal graveyard, which is seen as long term and ignored.

Moreover, global nuclear power lobbies have created an impression that the nuclear plants would be major power suppliers. But, there are far too many constraints, even at the technological level, to turn this into a reality. It is a fact that uranium production is not very high in India and the Thorium-based technology, developed by our scientists too has its limitations. In sum, making the country dependent on expensive fuel imports. In fact, the Uranium prices are at moderate level as of now, but no sooner does India enter the market, international prices are bound to soar. How would then the NPCIL be able to keep the per unit price at Re 1?  

Last but not the least, so far the country has not witnessed a major disaster as the N-plants are Government-controlled. But would the Atomic Energy Regulatory Board be able to maintain this record once the private players, who are primarily profit-oriented, enter the market? There is no denying that despite regulatory mechanism disasters have taken place in the US and Russia.

Regrettably, under pressure of various lobbies no one has critically assessed the situation. The nation needs to have a re-think before going whole hog for N-power. Far from being a boon, it could become a bane. ---INFA

 (Copyright, India News and Feature Alliance)