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Nuclear Power and Energy Security, Shri R V Shahi, Former Secretary, Ministry of Power

Last week, a popular business magazine sent me a questionnaire containing seven questions on various aspects of nuclear power. This paper is based on my replies to these questions.

Nuclear Power and Energy Security

In our country we have a long way to go to create additional electricity generation capacity even to reach a satisfactory level of energy security, let alone a perfect situation. So far, domestic coal has been not only the main source to fuel power generation, it has occupied more than 60% of power sector profile and power generation. We are told that India has a huge reserve of 257 billion tonnes of coal and that it would last almost 100 years or more. However, when we interact with coal experts, go into details of the basis on which these reserves are claimed, we also get confronted with conservative conclusions like the reserves which remain extractable are no more than 50 billion tonnes. Perhaps the fallacy lies in the manner in which these estimates are tentatively determined and also the fact that the amount of reserves which have already been used are not properly taken into account. Without going further into the debate whether 50 billion tonnes of estimates are more authentic or 100 billion tonnes are extractable, let us agree that the reserves are not unlimited. And therefore, they will last for a definite period, it could be shorter than 40 years, could even last 50 years.

India's energy planning has to take care of periods even beyond these. And, it can be nobody's case that the present generation has a right to exhaust everything that the nature has given and that it does not leave for the future generations. Therefore, while the energy planners will be right in depending a lot on the Indian coal for power development programmes, but the practice and trend of the past has to see a definite departure. We need to explore all possible options. Even if we think of a period of next 25 years, India's installed capacity is targeted to rise from 145 GW as at present to 800 GW. Obviously, unless all routes and all technology options are deployed such ambitious, but absolutely essential, targets cannot be fulfilled. India has a hydro potential of 150 GW. At the most we can achieve during this period about 40 GW through other renewables. Though coal will continue to dominate, the total cannot be made up to 800 GW unless we also utilise, to the extent we can, the nuclear option.

In the Integrated Energy Policy it has been recognised that nuclear will not be a major contributor. At the most 6 to 7% of the total of 800 GW could be expected to be based on nuclear technology. Obviously, in percentage terms it is a small figure, but this would mean raising the nuclear based power generation capacity from presently 4,500 MW to about 55,000 MW. This is a large addition programme and its contribution therefore can neither be wished away nor can be ignored. There is another reason that we need to make all possible efforts to maximise our capacity addition programmes through hydro electric systems, nuclear technology, wind, bio-mass and solar energy. Global warming concerns have assumed great relevance and world wide attention. India, having massive electricity generation programme in coming decades, will need to demonstrate that while its case for continued dependence on coal in a significant way is valid, it is taking all possible efforts to deploy alternate strategies so that the CO2 emissions are kept to the minimum. In this context, it may be relevant to mention about China's long term plan on nuclear. Why China? Because, like India China also has massive power generation expansion plans and is also under focus on CO2 emissions. It is understood that China is planning to raise nuclear power capacity to more than 1,50,000 MW in next 25 years.

Prospects of Fuel Availability

At present our nuclear fuel based power generation capacity is 4,500 MW. In the beginning of 10th Plan when the capacity was about 2,500 MW, we could operate these plants at a Plant Load Factor (capacity utilisation percentage) of more than 85%. Since then, the installed capacities have increased, but commensurate quantum of fuel has not been made available. The Plant Load Factor, as a result, has gone down to less than 60%. Therefore the question whether we would be capable or would it be feasible to raise the capacity to say 20,000 MW, and in a period of 25 years to over 50,000 MW, depends on whether we will be able to tie up the nuclear fuel for these plants. Most likely financing may not be an issue. Similarly capability to design, construct and operate will not be a problem, as Indian engineers have demonstrated their ability to operate nuclear power plants successfully. The crux of the problem will be adequacy of nuclear fuel. We have limited reserves of uranium and therefore dependence on nuclear fuel from other countries is inevitable. While saying so, I would like also to clarify that our Scientists and Engineers are working hard on Fast Breeder Reactor technology which can lead to large capacity additions without necessarily being constrained on account of fuel inadequacy. If this programme succeeds we have a sound strategy to multiply the generating capacities. However, it appears necessary that we must also put in place necessary linkages so that we are in a position to source nuclear fuel supplies from various other countries. Pursuing nuclear power option will definitely require global networking both for plant and machinery as well as fuel.

Economics of Nuclear Power

It is true that the capital cost of nuclear power plants is comparatively higher than the thermal plants based on coal or on gas. However, the fuel cost is significantly lower. Both the fixed cost and the variable cost put together for nuclear plants, in the initial years, will be higher than the corresponding cost of power from coal or gas plants. As the plant depreciates and the interest burden on account of loan together with repayment of loan is extinguished, say over a period of 10 to 12 years, the cost of power from nuclear plants could be even lower. Thus, if we take a long term view, and consider levelised tariff for a period of, say 20 years, the price per unit of power would be very well comparable with the conventional coal or gas based power plants. It will, however, be relevant to clarify here that these figures are based on the local nuclear fuel. If we need to import - and we will have to do that for larger capacities - the cost of fuel will depend on the global market conditions. In the last 8 to 10 years, price of nuclear fuel has increased considerably. Necessary safeguard will, therefore, have to be made that as and when nuclear plants are set up, long term contracts for fuel supply are also put in place with a good degree of clarity and predictability about the price obligation. It would also be relevant to mention that, when the naphtha based power plants were set up in mid 90's, these plants were viable because price of naphtha was about Rs. 10,000 per metric tonne when the crude price was also about 10 to 12 $ a barrel. In ten years, we have all seen, crude prices have increased beyond ten times and so have the prices of naphtha also increased, thereby rendering naphtha based power generation totally unviable. One could only expect and hope that nuclear fuel, in times to come, does not demonstrate similar price behaviour in the global market. Having said that it also needs to be clarified that proportion of fuel cost in the overall cost of power generation in a nuclear plant is considerably less and therefore sensitivity of cost of power vis-?-vis price of nuclear fuel could be comparatively much less as compared to, say gas based power generation.

Impact of Shortage of Domestic Fuel

It is true that we do not have enough uranium fuel to run the existing plants beyond 60% of capacity. However, as already mentioned, the entire planning of nuclear based power capacity cannot be on the basis of domestic fuel alone. In fact, even in case of coal based power plants, in the Expert Committee to develop long term Integrated Energy Policy, we were of the considered opinion, and that is how we concluded and recommended that even though India has enormous amount of coal reserves it would be advisable that a part of our additional power generation capacity is developed on the basis of imported coal and we leave sufficient amount of domestic coal reserves for our future generations. It is precisely for this reason that a chain of costal power stations were suggested to be developed on imported coal or domestic coal blended with imported coal. Therefore, to think that since we do not have enough uranium we need not plan large capacities on nuclear fuel will not be a correct strategy. What would be necessary, however, is to plan for these capacities with the required precautions which have been mentioned above viz. long term fuel supply contract, reasonable price variation provisions etc. Possible price escalations of imported fuel will, no doubt, be an issue which will need to be handled carefully.

Thorium Based Nuclear Power

Thorium may provide a great opportunity once the technology is properly developed and perfected. There is every reason to believe that it will happen. However, India needs to follow multiple strategy; it may not be advisable to totally depend on one route, one technology or one fuel. In fact, our Energy Policy itself emphasises that considering the enormous gap that exists between demand and supply, and the growth that has been projected, India needs to follow all routes to develop power projects and produce energy and electricity. India has plenty of thorium of good quality. However, as per the present technology, thorium cannot be used straight away in a reactor for generation of electricity. Uranium has fissionable isotopes, but thorium does not have such isotopes. Therefore, thorium is required to be processed for its conversion into Uranium - 233 which has to undergo fission to produce power. Advance Heavy Water Reactor (AHWR) developed recently by Bhabha Atomic Research Centre will use thorium as feed for the purpose. AHWR will also use small quantity of plutonium. But we will need more plutonium for larger power generation capacity. Fast Breeder Reactors (FBR's) will breed adequate amount of plutonium as well convert thorium into Uranium - 233. It is in the strategy of the Atomic Energy Development Department that this technology is seriously pursued and perfected. Simultaneously necessary actions are in progress to explore all possible reserves of uranium in India so that not only for the existing capacity but also for further expansions the supplies become adequate. There are issues of developing these mines - local resistance on ground of safety and rehabilitation, resettlement etc. These need to be resolved.

Technology Available for Implementation of Nuclear Power Plants in India

Atomic Power Planning is more than 50 years old. It is a fact that the progress has not been as was thought in fiftees and sixtees. Yet, development of nuclear power plants is not new to India. We have a number of them. In the initial stage, no doubt, these plants faced teething problems and subsequently for several years their stabilisation became problematic. But, now for last about 15 years, these plants have been operated smoothly. Our engineering capability, construction infrastructure and management and operational expertise are all geared to take on expansion programmes in a big way. Equipment supply will continue to be an area of challenge. This, of course, is a problem which is not only peculiar to nuclear power plants. But, domestic inadequacies on this front are visible even for other conventional power plants based on coal and gas. Fortunately an awakening is now witnessed and the belated realisation is leading to preparations and setting up of new manufacturing infrastructure for power plant equipment. L&T is coming up with power equipment manufacturing facility. Reliance Power is in the process of a tie up with China's Shanghai Electric. Jindals and Bharat Forge, besides a few others, are also planning to set up factories. These should lead to better Indian capability on power plant machinery and systems in next 3 to 5 years. Commensurate preparations will obviously be needed for augmentation of construction and commissioning capability. In recent years, lack of construction agencies has also emerged as a major constraint for Indian power sector.

Conclusion

Based on the arguments advanced, I do consider that nuclear energy is an option for India which is eminently suitable for enhancing our power generation capacity. Even though this will continue to play only a marginal role, inasmuchas in next 25 years its contribution could rise from present 3% to about 6% only, it would be a significant support in mitigating India's energy problems. Issues concerning safety and environment would continue to be an area of concern, and therefore, when the country embarks upon much larger capacity additions through this technology, even greater attention, care and caution shall be necessary to ensure that safety relating to radiation, disposal of wastes etc. are adequately taken care of. The appropriate Regulatory institution, which is already in place, will not only need to be strengthened but its role will become even more challenging. Considering the likely dependence on other countries in the nuclear fuel supply group, the contract arrangements for fuel supply will need to be made fool proof to ensure adequate fuel availability as well as price predictability. An important Policy initiative which should be put in place is on amendment to the Atomic Energy Act. For large capacity addition programmes, the only public sector viz. Nuclear Power Corporation may not be adequate to handle the challenge. Other public sector companies in power should also be allowed and they should come forward. Private sector companies should also be encouraged. The National Electricity Policy (January 2005), which the Ministry of Power notified, after approval of the Union Cabinet, provides for facilitating private sector in creating nuclear power generation capacity.