Will Nuclear Energy Power India’s Future?

0
Snapshot
  • It might already be too late to ask that question because if India has to meet its gigantic energy needs in the future, nuclear energy has to be the area of focus.

The total installed electrical capacity of India crossed the 300 gigawatts (GW) mark in early 2016. Of this, 210 GW (70 per cent) constituted thermal power from sources such as coal, gas and diesel. As is evident, India is highly reliant on fossil fuels to meet its energy needs. Hydroelectric power too contributes a significant component (13 per cent) with total installed capacity of just over 40 GW. The total installed capacity of grid-interactive renewable power—which consists of wind, solar, biomass and small hydro—is just under 43 GW (14 per cent). Nuclear power accounts for 6.78 GW, a mere 2.3 per cent of the total capacity. In terms of actual energy generation, the total electricity production in India in 2014-15 was 1,278 terawatt hour (TWh) of which nuclear energy contributed just under 3 percent.

Although India is the fourth largest energy consumer in the world, behind only the US, China and Russia, it is a highly energy deficit country. While it supports 18 per cent of the world’s population, it has only 0.6 per cent, 0.4 per cent and 7 per cent of the world’s oil, gas and coal reserves, respectively. India’s dependence on imported fossil fuels – oil, coal, gas and others – rose to 38 per cent in 2012. India imported 23 per cent of its coal requirements, 71 per cent of its oil needs and 30 per cent of its gas demand in 2012. These shares have increased over the last few years. India’s oil needs reached a level of 81 per cent import dependency in 2015-16.

India’s per capita electricity consumption stood at just over 1,000 kilowatt hours (kWh) in 2014-15. In comparison, developed countries average around 15,000 kWh. China has a per capita consumption of around 4,000 kWh. World average is more than 3,000 kWh.

In 2013, India’s population without access to electricity was estimated by World Energy Outlook to be a staggering 237 million which accounts for 19 per cent of the entire population.

And it looks for worse going ahead

International Energy Agency’s (IEA) World Economic Outlook (WEO) 2015 projection is that India will see the fastest growth in energy demand by 2040 as China effects structural changes to its economy, such as moving towards services. India’s total energy demand will more than double, propelled by an economy that will be more than five times larger in 2040 and a demographic expansion that will make India the world’s most populous country. This will happen even after impressive energy efficiency gains—the overall energy intensity of India’s economy is expected to reduce from 0.11 tonnes of oil equivalent (toe) per $1,000 of gross domestic product (GDP) in 2013 to 0.05 toe per $1,000 of GDP in 2040. India’s energy needs will reach 1,900 million tonnes of oil equivalent (Mtoe).

Led by coal, the share of fossil fuels in India’s energy mix will rise to 81per cent by 2040 from 72 per cent in 2013. The IEA expects India’s oil demand to rise the fastest—by 6.0 million barrels per day to 9.8 mb/d in 2040. It projects that oil production will fall behind demand, pushing oil import dependence above 90 per cent by 2040 although Prime Minister Modi has set a target to bring this down to 67 per cent by 2022.

Over 50 per cent of new generation capacity up to 2040 will come from renewables and nuclear power. Keeping pace with the demand for electricity will require nearly 900 GW of new capacity, the addition of a power system four-fifths the size of that of the United States today. India has the world’s fifth largest wind power market and plans to add about 100,000 MW of solar power capacity by 2020. There will be greater reliance on solar and wind power (areas where India has high potential and equally high ambition) to deliver on the pledge to build up a 40 per cent share of non-fossil fuel capacity in the power sector by 2030. IEA calculations show that renewables will account for 43 per cent of all power generated in India in 2040. Nuclear energy—with its massive potential—can be expected to play a key role in the country’s future energy mix.

India’s Nuclear Industry

Since independence, India has strongly endorsed nuclear power for civil use. Today India has 22 operating nuclear reactors at six locations across the country, their combined capacity totaling 6.8 GW. Till 2008, India’s civil nuclear strategy had evolved largely without fuel or technological assistance from other countries for more than 30 years. This was the result of India’s Peaceful Nuclear Explosion (PNE) in 1974 and refusal to sign the Non-Proliferation Treaty (NPT) because of its discriminatory nature. This led to India’s isolation from international commerce in nuclear materials and technology. However, scope for civilian nuclear trade increased significantly beginning September 2008 following the Nuclear Suppliers Group’s (NSG) unique, India-specific waiver to enable it to trade internationally in nuclear technology, equipment and materials. India was permitted to carry out nuclear commerce with the rest of the world, although it has not signed the NPT, in recognition of its impeccable non-proliferation record. Following this, India has signed bilateral deals on civilian nuclear energy cooperation with several countries.

India’s domestic uranium reserves are small. The country is dependent on uranium imports to fuel its nuclear power industry. Since early 1990s, Russia has been a major supplier of nuclear fuel to India. Due to dwindling domestic uranium reserves, nuclear powered electricity generation declined by 12.83 per cent from 2006 to 2008.

Since March 2011, large deposits of uranium have been discovered in the Tummalapalle belt in Karnataka. This belt of uranium reserves promises to be one of the top 20 uranium reserves discovery of the world. So far 44,000 tonnes of natural uranium has been discovered in the belt, which is estimated to have three times that amount.

Nuclear Agreements with Other Nations

As of 2016, India has signed civil nuclear agreements with Argentina, Australia, Canada, France, Japan, Kazakhstan, Mongolia, Namibia, Russia, South Korea, the United Kingdom and the United States. The latest country to enter into a nuclear deal with India is Japan, the only country to have suffered atom bomb attacks. The bilateral Agreement was signed during PM Modi’s visit to Japan on 11 November, 2016.

After the NSG waiverFrance was the first country to sign an agreement with India on 30 September 2008. Framework agreements were signed in 2010 for setting up two third-generation EPR (Evolutionary Power Reactor) reactors of 1650 MW each at JaitapurMaharashtra by the French company Areva. The deal caters for first set of two of six planned reactors and supply of nuclear fuel for 25 years. Electricite de France (EDF) which took over Areva signed a memorandum of understanding on 26 January, 2016 with Nuclear Power Corporation of India Limited (NPCIL) to build six reactors. Some regulatory issues persist as also difficulty in sourcing major components from Japan due to India not being a signatory to the Nuclear Non-Proliferation Treaty. This position could undergo a significant change after the recent India-Japan nuclear agreement.

India and Kazakhstan signed an inter-governmental agreement for Cooperation in Peaceful Uses of Atomic Energy in April 2011. This envisages a legal framework for supply of fuel, construction and operation of atomic power plants, exploration and joint mining of uranium, exchange of scientific and research information, reactor safety mechanisms and use of radiation technologies for healthcare. India and Kazakhstan have been collaborating in civil nuclear area since January 2009 when Kazakh nuclear company KazAtomProm signed an MoU with NPCIL for supply of uranium.

The nuclear agreement with USA led to India issuing a Letter of Intent for purchase of 10,000 MW nuclear reactors from USA. However, liability concerns and a few other issues prevented further progress in the matter. India’s nuclear liability law gives accident victims the right to seek damages from plant suppliers in the event of a mishap.

It has apparently deterred foreign players like General Electric and Westinghouse Electric, a US-based unit of Toshiba, with companies seeking further clarification on compensation liability for private operators. Risks related to nuclear power generation prompted Indian legislators to enact the 2010 Nuclear Liability Act which stipulates that nuclear suppliers, contractors and operators must bear financial responsibility in case of an accident. The legislation addressed key issues such as nuclear radiation and safety regulations, operational control and maintenance, management of nuclear power plants, compensation in the event of a radiation-leak accident, disaster clean-up costs, operator responsibility and supplier liability.

An accident like the 2011 Fukushima Daiichi nuclear disaster would have dire economic consequences in heavily populated India as did the 1984 Union Carbide Bhopal tragedy, the world’s worst industrial catastrophe. India has taken significant steps over the last few years to address this issue. It has ratified the Convention on Supplementary Compensation for Nuclear Damage and set up an insurance pool of Rs 1,500 crore (US$225 million) for liability risks that may arise from the construction and operation of nuclear power plants in the country. It is uncertain, however, if this amount will effectively assuage supplier concerns. For example, after the Bhopal gas calamity, the Indian government claimed US$3.3 billion in damages. The proposed insurance pool is paltry in comparison.

India and Russia signed an agreement dating back to 1988 to establish nuclear reactors in India. Not much progress was possible in subsequent years due to sudden disintegration of the Soviet Union in 1991 and India’s financial difficulties and related international developments. The project was revived during the visit of Foreign Minister Primakov to India in 1998 when it was decided to construct two VVER (Water-Water Energetic Reactor) 1000 MW reactors at Kudankulam in Tamil Nadu.

Bilateral partnership in nuclear and other areas was further strengthened with the establishment of the Strategic Partnership between the two countries during President Putin’s first visit to India in 2000. A 2008 bilateral agreement provided for an additional four, third generation VVER-1200 reactors of capacity 1170 MW each. Russia declared that it would not impose curbs on export of sensitive technology to India. A new bilateral accord signed in Dec 2009 gave India freedom to proceed with the closed fuel cycle which includes miningpreparation of fuel for use in reactors, and reprocessing of spent fuel.

The first reactor with Russian collaboration, the new 1,000-MW power plant at Kudankulam, started commercial operations in 2014. The second reactor has achieved 85 per cent capacity and is likely to accomplish full capacity by early next year. Concrete pouring for the 3rd and 4th units was done by Prime Minister Modi and President Putin during the 17th India-Russia Summit in Goa on 15 October, 2016. Construction is expected to start shortly. Negotiations on the 5th and 6th units are in progress and are likely to conclude soon.

Agreement was reached at the India-Russia Summit in December, 2014 in New Delhi to identify another site in India for another 6 reactors. This is likely to be in Andhra Pradesh. Final decision is expected soon.

So far nuclear plants with Russian support only have been constructed in India. They are successfully generating electricity. The two sides will soon develop a framework for collaboration in the field of radioactive waste management. They will also promote localisation of manufacturing of equipment and fuel assemblies in India. They will expand collaboration in nuclear power plants technical maintenance and repair, modernisation and retraining of personnel. These initiatives can be expected to provide a strong fillip to the ”Make in India” initiative of the government. Russia’s VVER reactors are among the more advanced Gen III+ designs and provide clean, cheap and reliable energy.

India and Russia are cooperating under a long term agreement to expand civil nuclear collaboration free from any restrictions or curbs on India in future. In addition to establishing more nuclear power reactors, Russia has agreed to transfer the full range of nuclear energy technologies and ensure uninterrupted supply of fuel. Civil nuclear cooperation between India and Russia has been a major element in rejuvenating bilateral partnership in recent years. It heralds a glorious future in the years to come. Nuclear energy sector has the potential to be a strong bridge in partnership between India and Russia.

India’s Indigenous Nuclear Plants

In addition to the two reactors at Kudankulam, Tamil Nadu built with Russian assistance and two others at Tarapur, Maharashtra which were established in 1969 with US/Canadian assistance and are currently operating at 160/100 MW capacity, India currently has 18 indigenously developed Pressurised Heavy Water Reactors (PHWR) which are located in Maharashtra(2), Rajasthan (6), Tamil Nadu (2), Karnataka (4), UP (2) and Gujarat (2), with a total capacity of 4.44 GW. Energy generation by these reactors has reached levels of 90 per cent capacity after problems related to availability of uranium fuel were resolved consequent to the NSG waiver in 2008.

The cost of imported fuel for running nuclear reactors is low which is an important reason that nuclear power is cheaper than other fuels such as coal or natural gas.

Compared to power plants using fossil fuels, nuclear power has high initial costs. However, fuel cost is a minor expense during the nuclear plant’s life, leading to lower lifetime costs for nuclear power compared to either coal or gas.

NPCIL supplies electricity at a lower cost per unit compared to any other energy utility in the public or private sector. Given India’s status as a major importer of petroleum, natural gas and coal, greater reliance on nuclear energy could be an important way to keep energy costs in check.

In recent years, India has accorded greater importance to thorium fuels and fuel cycles because of large deposits of thorium (518,000 tonnes), a non-fissile material, in the form of monazite in beach sands as compared to modest reserves of low-grade uranium (92,000 tonnes). The long-term goal of India’s three-stage nuclear power program is to develop an advanced heavy-water thorium cycle. Thorium has the potential to provide several hundred times the energy with the same mass of fuel as uranium. The fact that thorium can theoretically be utilised in heavy water reactors has tied the development of the two types of reactors. A prototype reactor that would consume Uranium-Plutonium fuel while irradiating a thorium blanket is currently under construction at Kalpakkam. Thorium reactors would also be safer and not susceptible to production of nuclear weapons. This could be the harbinger of development of a new generation of cleaner, cheaper, safer nuclear power. India could be in a position to make thorium reactors operational by 2025.

Even in the best case scenario, share of nuclear energy in India’s total electricity mix would still be low. For example, if India’s total installed electrical capacity including all sources rises to over 1000 GW as per estimates of the World Energy Outlook, nuclear energy, at 52 GW, would still be just around five percent of the total.

With Prime Minister Modi setting an ambitious goal of tripling nuclear power over the next decade, India’s nuclear-power sector is in the best shape it has ever been to deliver that target.

India is on course to double its nuclear power generation capacity to more than 10,000 mega watts (MW) over the next five years.

Nuclear surge only way to go?

India’s energy demands are expected to rise rapidly in the coming years. Energy is required to fuel the rapid economic growth and expansion to confront the scourge of poverty that afflicts more than 150 million people in the country, provide energy to the more than 200 million population who still don’t have access to commercial electricity, and raise the per capita level of energy consumption from the current low level of 1,000 kWh to more acceptable levels closer to the world average of 3,000 kWh.

Currently India is highly dependent on fossil fuels like oil, gas, coal, much of which are imported. In addition to the unacceptably high quantum of outgo of foreign exchange, fossil fuels are highly polluting and have a huge detrimental impact on the environment. Business as usual is hence not possible. It is imperative for India to move to more environment friendly forms of energy which also don’t necessitate the outflow of large amounts of scarce foreign exchange resources. Renewables particularly solar and wind whose production costs have fallen significantly in recent times would be an important component of this energy mix. Nuclear energy would also be an indispensable element of the future energy generation programme.

Two aspects in this regard will need to be taken note of. Firstly to launch a concerted reach-out to those who continue to be wary and apprehensive of the safety and security of nuclear reactors and materials. It has been proven beyond all reasonable doubt that with all recent technological changes, nuclear power is as safe, if not safer than power generation through fossil fuels. There is also considerable anxiety about the manner of disposing nuclear waste and the period for which it will continue to be radio-active. Reassurance on this score by scientists, experts and those in the know of intricate issues involved should be proactively communicated to common citizens. It is pertinent to remember that notwithstanding the 2011 Fukushima disaster, Germany is the only country in the world that has turned its back on nuclear power and that also mostly for political reasons and not on scientific or technological considerations.

Currently there are more than 60 reactors being constructed in 15 countries all over the world. Out of these only five are in India. As per plans declared by the government, India intends to draw 25 per cent of its electrical energy from nuclear sources by 2050. This includes 20 GW by 2020 and 63 GW by 2032. It is doubtful whether these targets will be met. The government has already revised the targets to declare that India will produce 14.6 GW by 2021 and 27.5 GW by 2032.

Even with the rapid increase in renewable and nuclear power generation, fossil fuels will continue to be the mainstay of the Indian power scene for the foreseeable future. It is however imperative that nuclear energy which is competitive, safe, reliable and clean continues to be an increasingly important source to power the growth and development of the country.