Latha Jishnu: Running out of options

The fact that NPCIL is investing in both wind and hydropower is the most telling example of just where India's nuclear power programme is going.

Just a half-hour's drive up the Tamil Nadu coast from Kanyakumari, the twin domes of the Kudankulam nuclear reactors brood over the brown scrubland, dwarfing everything in sight "" even the tallest of the windmills in the vicinity. This is essentially windmill country, with mile upon mile of tall white columns spiking the Tirunelveli landscape in a showy endorsement of renewable energy. Juxtaposed with the windmills, the 80-metre high domes "" these contain what are among the largest reactors in the world "" bring into sharp relief the disquieting issues about India's energy security and the role of nuclear power in it.

The windmills prompt a snap comparison. Easy to set up and simple to operate, wind power seems to offer the ideal energy solution; nuclear power, vulnerable to global politics and cartels, too complex to handle. Windmills have come up in a sudden sweep across the country to touch 7,700 MW, the bulk of it in the last three years. The nuclear project of two 1,000 MWe reactors, on the other hand, has been in the making since 2001, and is expected to be fully operational only in 2009. The obvious question then is: why nuclear?

To be fair, the comparison is simplistic: windmills work only seasonally, and tariffs on the whole tend to be much higher than for thermal energy. Atom-splitting, despite the high costs and the risk of disasters that could cause large-scale destruction, still has its champions. The big draw now is that nuclear power offers huge amounts of baseload electricity without the greenhouse emissions of coal-fired plants "" a huge plus point in view of worries over global warming. Particularly in India where skewed policies have kept gas, a cheaper and relatively cleaner fuel, out of the reach of the power sector, nuclear would appear to be a good bet, specially since hydroelectric projects, the most logical choice, have failed to take off in a big way.

But nuclear is almost reaching a dead end, owing to concerns about fuel and costs. A critical shortage of domestic uranium is taking the fission out of the nuclear power programme, forcing the Nuclear Power Corporation of India (NPCIL) to shut down plants and putting its expansion plans on hold. Kudankulam, even if it is taking overly long, is a saving grace for NPCIL. The reason is simple. The two light water reactors coming up in partnership with the Russian Federation will run on enriched uranium supplied by the Russians for the lifetime of the project. NPCIL runs its stable of indigenously developed pressurised heavy water reactors (PHWRs) on natural uranium, and a shortage of yellow cake, as the processed uranium is called, has severely curtailed operations. Plant usage has dipped to around 57 per cent from a high of 82 per cent six years ago, and is likely to be reflected in its balance sheet this year.

The lack of technology to mine uranium at greater depths coupled with public opposition to the opening of new mines means that NPCIL is being forced to go slow on the induction of larger reactors that are on the drawing board. Against a requirement of around 500 tonnes of uranium annually, production is estimated to be just about 200 tonnes, and industry insiders say the department of atomic energy (DAE) is using up its stockpile to keep the plants running. The current fuel crisis is part of a larger problem: India's uranium reserves will support generation of just 10,000 MWe.

Costs are a core issue. Although the capital cost of indigenous reactors has come down to Rs 6-7.45 crore per MWe, this is way too high compared to other thermal power plants: Rs 3-3.5 crore for gas-fired and around Rs 4 crore for coal. Besides, there are the hidden costs. According to M V Ramana, a physicist and senior fellow at the Centre for Interdisciplinary Studies in Environment and Development, Bangalore, significant subsidies are being extended to NPCIL through the leasing (rather than outright sale) of heavy water. Moreover, the DAE, he says, does not charge NPCIL anything for dealing with the spent fuel.

This may be one reason why nuclear power has been relatively cheap with tariffs close to that of hydropower. An average rate of Rs 2.30 per kWh (Tarapur's cost of generation is just 93 paise) made it very attractive "" until the bids for the ultra-mega projects came in earlier this year. Now, Reliance Energy's Sasan, a pithead project, offers levelised tariff of Rs 1.29 per unit, while Tata Power's Mundra, using imported coal, will be Rs 2.26.

The option of importing reactors may not prove viable either. For the 12th plan, NPCIL is banking on foreign projects to deliver as much as 8,000 MWe. But can India afford the huge price tag? Light water reactors cost roughly $1.5-2 billion for 1,000 MWe, compared to about $1.2 billion for a heavy-water reactor. Even if India manages to reduce costs by increasing the domestic content, the reactors would be hugely expensive. In any case, India would first have to negotiate with the International Atomic Energy Agency and the Nuclear Suppliers Group, not to forget the US Congress, before it can think of imports.

Prospects of nuclear power are thus bleak. Despite its signal triumphs "" India is among a handful of countries whose expertise spans the entire nuclear fuel cycle from uranium mining and milling to the reprocessing of spent fuel "" capacity addition has been agonisingly slow. Operating under a crippling regime of sanctions imposed on the country after the 1974 Pokhran blasts, Indian scientists were forced to innovate as they came up against technology humps and a moratorium on fuel. Thus, at the end of a four-decade odyssey, the report card is far from impressive: 17 reactors that add up to just 4,129 MWe, or 2.9 per cent of the generating capacity. During the current plan it will add just 3,160 MWe.

The DAE's extravagant promises of plenty have come to naught. Generation was forecast to touch 20,000 MWe by 1987, but even 20 years after the deadline, it is less than a quarter of the target. The nuclear odyssesy, say critics, has been sidetracked by the nuclear establishment's obsession with the weapons programme. Whatever the truth, compare this with China's feat. Starting its power foray two decades after India's, China has notched up 8,587 MWe through a liberal import of technology from France, Russia and Canada, with another 18,000 MWe under construction. And as the country comes under international pressure to lower its emissions level, China has fixed ambitious targets for carbon-free nuclear power: 40,000 MWe by 2020 (in a total capacity of one million MW), and 160,000 MWe by 2030. There is little doubt that the Chinese will meet those targets.

For India, a number of calculations are going awry as foreign policy imperatives undermine the best laid plans of the DAE. A major blow was the refusal of Prime Minister Manmohan Singh to sign the agreement for two more Russian reactors at Kudankulam during his Moscow visit last month, purportedly because it would have upset the US. So, NPCIL is looking at a gaping hole in its capacity since the four additional units at Kudankulam (4,000 MWe) are now in limbo. The new target of 20,000 MWe by 2020 will remain a pie in the sky.

Environmentalists say wind and water are a better bet any day. And even the NPCIL seems to concur. It is investing Rs 50 crore in windmills "" and plunging into hydropower, too.