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Waiver for India from Nuclear Supplier Group, Shri R V Shahi, Former Secretary, Ministry of Power

After sincere and serious efforts by the Indian team, in several meetings and, with all the concerned countries, India has finally succeeded in getting the waiver from the Nuclear Supplier Group. I have already written couple of papers on the Indian Energy Policy and role of Nuclear Energy in India's economic and industrial development programmes. Therefore, in this paper we will not highlight those aspects except for a brief statement that, in the overall power development programmes of the country, the role of nuclear power is expected to rise from the present proportion of less than 3% (4,100 MW out of total of 1,45,000 MW) to about 7% (60,000 MW out of total of 800,000 MW) in next 25 years, by the year 2032. Nuclear power, therefore, is expected to play not a marginal role but make a significant contribution in the overall energy strategy of the country.

On the occasion of India getting waiver from the NSG Nations, Delhi Doordarshan organised, on Thursday, the 11th September, 2008, one hour debate between a group of Experts viz. S/Sh. R.V. Shahi, G. Parthasarthi, Uday Bhaskar, Siddhartha Vardharajan, Ms. Arundhati Ghosh and participants drawn from different walks of life. The focus of this debate was to understand the implications, for India, of the NSG waiver. The discussions centered around the following main issues:

  1. Would this waiver mean a lot to India in terms of energy availability, energy security or would it just make a peripheral contribution?

  2. Electricity generation with nuclear power may make some difference for industrial and commercial sectors, but would it make any impact at all on general people particularly in rural India?

  3. There are lot of discussions and controversies about the content of 123 Agreement with the U.S.A., reference about Hyde Act in the 123 Agreement and also about a letter from the U.S. Government to the U.S. Congressmen about U.S.A.'s position in case India conducted a nuclear test. Do these all mean that India cannot be assured of certainties of supply of nuclear fuel? By implication, does it mean that we will have to restrain ourselves from conducting such nuclear tests even if they were needed in the interest of India's security?

  4. In the last 50 years we have been able to just cross 4,000 MW of power generation capacity based on nuclear fuel. Are we being too ambitious and unrealistically optimistic about the capacity additions in next two to three decades?

  5. What is our preparedness in terms of manufacturing to meet the challenging targets of capacity addition through nuclear route?

  6. Would the power capacity addition programmes, on large scale, as being projected, not result in greater exposure to safety risks? What is the preparedness of the regulatory institution to mitigate this problem?

  7. Solar energy provides even larger scope than the nuclear route. Why is it that India is emphasising so much on nuclear and not taking adequate measures for harnessing solar power?

  8. Significance of the deal beyond energy development programmes - what is the relevance of nuclear collaboration for other economic and non economic activities beyond energy sector?

  9. Is there any particular interest of the U.S.A. - political or otherwise - that they are so much interested in carrying through this deal and are trying to ensure that this happens sooner than later? Have we understood comprehensively their game plan or are we getting into some sort of a trap?

  10. Is this exercise projecting India, in the perception of our people and of others in the world, to be getting closer to the U.S.A. and therefore is it changing India's image from a non-aligned nation to the one becoming pro-U.S.A?

Let us deal with each of these issues which were, by and large, covered, though briefly. The treatments of these issues are not necessarily the elaboration of the points made but there could also substantially be relevant additionalities.

  1. At present, in the total profile of installed capacity of power, nuclear power contributes only about 2.6%. While the Nuclear Power Corporation of India, a Government Undertaking, has plans to expand the capacities of existing plants as also add new plants, since capacity addition through other routes are on a much larger scale, in the near future (both short term and medium term), it is unlikely that there will be a significant increase in the proportion of nuclear generation capacity. However, while talking of power generation programmes we must take a holistic and long term view. The Integrated Energy Policy and the National Electricity Policy have recognised that nuclear power generation capacity will have to be a significant portion of the total power generation capacity in the country. Accordingly, it has been projected that by the year 2032 India may be having a nuclear power capacity of the order of over 60,000 MW, about 7% of the total power capacity then. Therefore, it would be wrong to assume that nuclear energy will be playing only a peripheral role. In the years beyond 2032, the way India will continue to be under pressure from global community on account of issues concerning global warming, given the fact that there will be technological advancement in nuclear power generation, with better level of confidence about adequacy of fuel, India could target even a larger proportion by the year 2050 to be coming from the nuclear generation systems. Already a tentative figure of 25% by 2050 is being talked about.

  2. From the participants, a concern was raised whether nuclear electricity will at all be of any relevance to rural India or will it be confined to meeting the needs of major towns and industrial centers. This concern emanated, as the participant himself brought out, from the fact that nuclear power was costlier than other conventional power. It was clarified, that it needed to be appreciated that power from any technology gets into the transmission grid and after that it looses its identity of whether it belongs to coal based generation or gas power plants or hydro electric systems. So long as more of such power becomes available, the supply reliability in rural India is bound to improve. As regards price of power, the present tariff structure does provide a system of cross subsidy whereby the price of power for rural India is significantly less as compared to prices for other groups of consumers.

  3. Throughout the country if any one issue has generated maximum amount of discussions, debates and also controversies, it is the 123 Agreement, a reference to the American Hyde Act in the Agreement and more recently the letter supposed to have been written by the Government of U.S.A. to their Congressmen with a mention about the intention of the U.S.A. to deal with the issue of fuel supply in the event India conducted any nuclear test. Similar were the sentiments and the tone of questions from the participants of this Doordarshan T.V. Programme as well. A lot of apprehensions were raised. Clarifications made which could lead to better understanding may be outlined as given below:

  1. The waiver given by Nuclear Supplier Group is not by the U.S.A. alone but by as many as 45 countries. It needs to be emphasised that while 123 Agreement with the U.S.A. was necessary to approach the NSG Nations for the waiver, any conditions of 123 Agreement may not at all be relevant in so far as commercial transactions that Indian companies would finalise with agencies of other countries. We need to recognise the 123 Agreement as a launching pad, and that once the issue has been launched and the NSG Nations have given the waiver, India would be free to enter into commercial agreements with them and that the relevance of the launching pad (123 Agreement), gets into the background.

  2. It would be advisable for the nuclear power generating utilities to make long term agreements for assured fuel supplies with predictable price variation provisions so that risks associated with these high cost investments are minimised.

  3. It may happen that even though the U.S.A. has been in the forefront of this whole exercise, Indian companies may not find the commercial terms of fuel supply by companies/agencies of the U.S.A. favourable, or they may find certain conditions totally unacceptable. In such an event there may be no agreement with the U.S.A. companies at all and we may find it more favourable to finalise such arrangements with other countries. NSG waiver has unlocked the door and opportunities have been created. Any obsession or apprehension about our dealings with U.S.A. should, therefore, not be allowed to overshadow the options - and they are many - to avail of the benefits of nuclear energy.

  4. Unfortunately, this whole issue has got over-projected as if the whole exercise is aimed at entering into arrangement or agreement between India and U.S.A. and since U.S.A. is of the considered view that if India conducted any test, the fuel supply to Indian plants may get disrupted. Just as we cannot prevent U.S.A. from taking that position, U.S.A. will not be in a position to prevent India from conducting the test if India, as a sovereign nation, considered it necessary to do so. We will not be worse off than today. What is the present baseline? If we conduct the test today, we are not going to get fuel from U.S.A., and as a matter of fact, from no other country as well. With the new dispensation, atleast one thing is certain that even if we conducted the test, may be U.S.A. may not continue to supply fuel, but others will, as per the agreements that the Indian power companies would have finalised with them.

  5. Even in the U.S.A., whatever may be their political considerations or requirements, their industry may be greatly benefited from the enormous growth and expansions in nuclear field in India. If the Indian companies could finalise with the U.S. manufacturers an arrangement to supply nuclear plant with assured arrangement for life time fuel supply, it is this industry within U.S.A. which will prevail on the Government dispensation not to discontinue fuel supply even if India were to conduct the test. Therefore, much will depend on how innovatively and skilfully our companies are able to configure and structure our commercial agreements with these equipment suppliers.

  1. Are we being too ambitious to target more than 60,000 MW in next 25 years? The concern is genuine and justified. In the last over 50 years of our nuclear programme we have just been able to cross 4,000 MW capacity. Even for these plans, in the last five years, there has been continuous deterioration in capacity utilisation because of inadequacies in supply of domestic fuel. With this background, considering a target of the type we are discussing, is not only daunting and challenging but obviously it appears virtually impossible, atleast in the perception of most of the people. However, the way India has now been able to scale up its economic growth rate, the way plans and programmes have been and are being put in place for various infrastructure sectors, the challenging target of over 55,000 MW additional capacity; in 25 years, can be made possible to be achieved. This will obviously require not only fuel tie-ups but all types of preparations.

  2. On the conventional power generation front, consisting mainly of coal based thermal power projects and hydro electric projects, domestic manufacturing capacity and capability have proved not only insufficient but far too short of the need. While in the last two years an awakening has happened and we see some movements, our nuclear generation programmes also will need commensurate preparedness in manufacturing sector. Even though we may have to partially source power plant equipment from outside, it would be desirable that Indian manufacturing base is suitably enlarged to cope with the ambitious expansion programmes through nuclear route. Preparedness will also be necessary in respect of related balance of plant systems and construction equipment technology and manpower, so that they all help in achieving the targets as per schedule.

  3. Indian nuclear power professionals, scientists and engineers have demonstrated their expertise and capability to run nuclear power plants efficiently and safely. Though not very often, but definitely we do get disturbing examples of unsafe and hazardous radiations from these plants in different parts of the world. Even after several decades of nuclear plant operations in a number of countries, these accidents do succeed in shaking the confidence of people. And, therefore, there are countries where resistance to these plants is so intense that in many cases authorities and agencies are not able to proceed to execute any such new plants. Fortunately in India such a resistance does not exist in view of our good track record. However, it needs to be underscored that when we are launching into a much larger expansion of our capacity profile with unit rating of 1,000 MW to 1,600 MW, and that too with large number of such plants, our safety apparatus, institutional arrangements and regulatory systems and procedures may need to be revisited and properly attuned to these magnitudes.

  4. During the T.V. discussion, a point was raised by one of the participants that with so much of solar potential in the country which, if harnessed, could provide a more satisfactory and stable answer to our energy problems, we are so much obsessed with nuclear energy. As per her information, she thought that nuclear power was as costly as solar power and therefore she suggested as to why not go for solar power in a big way than to get into all these controversies. It was clarified that no doubt solar energy was an eternal source of energy and India was endowed with atleast 8 to 9 months of good sun rays in most parts of the country, yet the technological development had not reached a stage that we could harness this energy at anywhere near affordable cost. Solar power is six to seven times costlier than the other conventional power; it may be atleast four to five times costlier than even nuclear power. In any case, India's strategy has appropriately focussed even on harnessing as much as possible solar energy and this strategy will not only continue but in years to come the focus will be further intensified. In fact, India's need for power is so enormous that all choices will have to be fully utilised because no one option on its own can fully meet our needs.

  5. An aspect which was very clearly, and in the most articulate fashion, was brought out by one of the Panelists was that though during this exercise linkage with energy has been highlighted considerably, and perhaps rightly so, we also need to recognise that the global nuclear collaboration, which India is embarking upon, is not only about power. The role of nuclear collaboration goes beyond and covers areas like agriculture, medicine, bio technology, software sector etc. All these areas provide ample scope for deployment of these technologies and therefore opportunities for investment.

  6. In view of the intensity of deliberations and the role that U.S. Government has played, in the perception of some of the participants -and perhaps it might reflect the impression throughout the country - there may be a hidden agenda of the U.S.A. Many tend to believe that the deep involvement of the U.S.A. is not without their selfish interest. Some of the participants went to the extent of saying whether our own system of Government has been able to comprehensively capture their game plan and whether we are not falling into a trap. It was clarified by the expert diplomats among the Panelists that last 50 years of our diplomatic relations with U.S.A. have been such that this doubt comes to the minds of many. However, we should recognise that we have emerged as a major economic power, particularly in this region of the world. In the assessment of the U.S.A., only India, a democratic country, could be a reliable and substantial answer to China's growing clouts. Therefore, if the U.S.A. is trying to come closer to India we must not feel apprehensive, in fact we should feel proud that we have reached a stage that we are being recognised as a strong global force.

  7. Some of the participants raised concerns about India being perceived becoming pro-U.S.A. and because of this whether our diplomacy is shifting its character from being a non-aligned nation to one tilting towards the U.S. There could be a risk that our diplomatic relations with a number of countries may get affected due to such a perception. It was ably clarified by the diplomatic experts among us, the Panelists, that in the matter of diplomatic relations there have been considerable shift in the thinking pattern in the recent years. Countries look at bilateral and multilateral relations both from strategic as well as economic points of views. In any case, as mentioned earlier, the waiver from NSG is from as many as 45 countries and following this milestone India's economic relations with a large number of these countries are going to undergo significant changes in the positive direction. Therefore, to think that this series of initiative can be perceived to project India as pro-U.S.A. may not be a correctly placed perception.

The T.V. discussion ended with concluding remarks with each of the four Expert Panelists. The consensus was that (a) NSG waiver is an historic event for India, (b) while we need not be euphoric about this development because the advantages from this development are only to be seen in the long term, we should definitely feel convinced that it is a significant step in India's energy strategy, (c) India's position in the global group has got enhanced in view of the recognition by advanced nations about not only India's potential but its present economic and political status, (d) this entire exercise, though begins with U.S.A., is not confined to U.S.A. Somehow on this issue there is considerable communication gap. We needed 123 Agreement for us to be enabled to enter into wider arrangement with rest of the world, (e) in conclusion, NSG waiver is a major milestone in global nuclear collaboration, which will place India in altogether a different and higher position and, therefore, this should be widely welcomed by all concerned.