India imports Uranium Fuel & NPCIL revenues improve dramatically

Government of India (GOI) signs plethora of MOUs/IGAs/Joint Declarations in recent past with several countries benefiting from Indo-US 123 Agreement and NSG waivers. Main success story revolves around importing Natural Uranium as fuel for domestic Heavy Water Reactors of PHWR type.  

Department of Atomic Energy (DAE), Government of India (GOI) had signed many Agreements MOUs in the past 7 years with several countries. Agreements/Memorandum Of Understanding/Joint  Declarations with USA, France, Russia, Namibia, Mongolia, Republic of Korea, Argentine Republic, United Kingdom, Republic of Kazakhstan, Canada, Sri Lanka and Australia. Out of these the Inter-Governmental Agreement (IGA) signed with Russia is for construction of nuclear power plant at Kudankulam (KK Nuclear Power Project 1-4), the Pre-Engineering Agreement (PEA) signed with M/s AREVA, France is for assessment of licenseability of the Evolutional Pressurized Reactor (EPR) project proposed to be set up in Jaitapur in Ratnagiri District of Maharashtra state and Preliminary Contract for Technical Feasibility Study for AP 1000 reactors signed with Westinghouse Electric Company (WEC), USA is for the proposed Site  at Mithivirdi Site in Bhavnagar, Gujarat.

MOUs and Agreements with countries such as Australia, Kazakhstan, and Canada etc were made to procure natural Uranium in the form of Yellow Cake and use it in the nuclear power plants that are open for international inspection under IAEA supervision. DAE supplies this Uranium to NPCIL and it has helped Nuclear Power Corporation (NPCIL) to better utilize its Pressurized Heavy Water Reactor (PHWR) type domestically developed nuclear power plants. The revenue of NPCIL has increased from INR 3500 crores in 2007-2008 jumped to INR 8900 crores in 2014-15.

Russians succeed over others in exporting reactors while others excelled in fuel export:

Signing 123 Agreement with USA in 2007 and  with Nuclear Supplier Group (NSG) removing embargo in 2008 have helped India to buy Uranium from open market at negotiated price for 3-5 year contractual terms. However, DAE & NPCIL have not made any meaningful progress in last 8 years on importing nuclear power plants , LWRs from USA and France. Only Russians succeeded in selling 4 reactors of VVER type  and obtained further commitment from GOI to buy 8 more VVERs. Six (6) of them to be installed at Kudamkulam site in Tamil Nadu and six (6) more at a site to be identified by GOI. 

The Nuclear Suppliers Group (NSG) granted full waiver to India in the year 2008. Before this period India was barred from purchasing nuclear materials, equipment’s, technology and services from the NSG member countries for its nuclear power program. Following this event, DAE in India made one of the smartest moves by quickly entering into nuclear fuel import contracts with countries having Uranium Mines. Fuel was received as Uranium Ore Concentrates and Uranium fuel pellets from France, Kazakhstan and Russia. Quantities ranged between 300 Metric Tons (MT) to 3000MT, to be delivered over a period of 5-6 years. Australia has also signed MOU and negotiations to sell Uranium from mines located in this country. General Atomic is a lead mine owner in Australia and may start negotiations with DAE to supply yellow cake in the years to come.

The industrial logic for importing nuclear fuel for domestic power program was straight forward. It has been widely known that domestic availability and supply of Natural Uranium in India is inadequate. This imposed limitation to sustain indigenous nuclear power program based on Pressurized Heavy Water Reactors (PHWRs) that have been built and operated by NPCIL during past 30 years. It is to be noted that currently 19 out of 21 operating reactors are of PHWR type requiring natural Uranium fuel and all of them were starved from reaching their full capacities. The capacity utilization factor (CUF) was restricted to below 60%.

NPCIL revenue that was under 500 Million USD in 2008-09. Once imported fuel was available, revenue went up to 1.2 billion USD in just under 5 years, without adding a single MW of new nuclear capacity. Data & statistic given below is the proof of the durable jump in capacity utilization factor (CUF) of Indian nuclear power plants from the year 2011 on-wards.
Financial Year: 2014-15 2013-14  2012-13  2011-12  2010-11 2009–10                                              CUF in %:               82%        81%        80%         79%        71%          61%

The substantial hike in NPCIL revenue had materialized due to high Capacity Utilization Factor (CUF) attained each year, beginning from 2011 on-wards. The data given below indicates doubling of Revenue and quadrupling of Profit After Tax (PAT) from 2011 to 2015 ( Source of data is published on NPCIL web site).
Financial Year: 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09
Total Revenue ( Crores INR):       8957  8580  8090  7960  6068  3837   3038
Operating Income (Crores INR): 2993  2894  2525    2318  1609    576    433
Net Profit (In Crores INR):             2201   2299  2101     1906  1376    416    441

(NOTE: 1 Crore = 10 Million)

Full credit is to be given to DAE and NPCIL management for its foresight and their nuanced methodology to procure Uranium from diverse sources. This strategy has brilliantly worked.

Domestic nuclear power program and how India lost its plot.

Thanks to Dr. Homi Bhabha, a brilliant nuclear physicist and an outstanding leader who died prematurely in an air crash near Mont Blanc (the French Alps) on 24^th January 1966, India had a head-start in the sixties in employing nuclear fission energy for power generation. At this period in the evolution of global atomic energy, only a few countries in Europe, Russia and North America were able to use nuclear energy for power generation and that too on a very modest scale. On 29^th October 1969, a 2×210 MW capacity nuclear power plant at Tarapur in Maharashtra began supplying power to the grid of Maharashtra and Gujarat states. With this development, India joined the small select club of countries such as USA, Canada, UK, France and Russia that were operating nuclear plants to supply electricity for consumption of electricity by common man. The two units at Tarapur were installed by GE & Bechtel on turnkey basis, with 200 million USD provided by USAID at a low interest rate and 30 year loan term. These two units at Tarapur are still in operation and supply electricity at a tariff of less than 1 rupee per Kwhr to Western Grid.

India has consistently added a few thousands MW of power generation capacity from coal, hydro, diesel, and wind energy sources each successive year. But the addition of nuclear power capacity has not kept pace with the contribution from these commercial sources of power. The total generation capacity of India has rapidly climbed from 6,000 MW in 1970 to 2,90,000 MW in December 2015. However, nuclear power generation capacity increased from 440 MW to only about 5,780 MW in the same time period. The share of nuclear power in Indian context was quite significant in the seventies but with the passage of time, it has practically paled into insignificance.

India’s domestic nuclear power program, based on indigenously built pressurized heavy water reactors (PHWRs), has been designed, developed, constructed and operated by the Government of India (GOI) through the Department of Atomic Energy (DAE) and its public sector arm Nuclear Power Corporation India Limited (NPCIL). The critical question is whether, over the past 45 years, we have really learnt to build these plants in a professional manner within the prescribed time schedule and estimated costs. I am afraid the answer even after having decades of experience of building PHWR type Nuclear Power Plants (NPPs) with indigenous industrial manufacturing capacities, private companies’ supplies and technical services support is indeed negative. 

To elaborate the point, consider that 17 out of the 19 PHWRs were built way beyond approved budgeted costs and scheduled time frames. Let us recall that 2×220 MW Narora units were sanctioned by GOI at an estimated cost of INR 210 crores. Narora atomic power plant (NAPP) was eventually completed at the total cost of about INR 800 crores. Kakarapar unit 1&2 were originally estimated to cost INR 383 crores and by the time these units were completed the cost had escalated to INR 1400 crores. Similarly, Kaiga units 1&2 located in Karnataka state were originally estimated to cost INR 699 crores, and RAPP 5&6 located at Kota in Rajasthan state were estimated to cost INR 700 crores. The completed costs were about INR 2200 crores for Kaiga and more than INR 2200 crores for RAPP.  

The story is the same if we look at scheduled time frames. NAPP was approved in 1972 and it was connected to the northern grid in 1992 (gestation period of 20 years). The two units of Kakrapar 1&2 were sanctioned in 1980 and went into commercial operation in 1995 (gestation period of 15 years).  Kaiga units 1&2 were sanctioned in 1985 and connected to the southern grid in the year 2000 (gestation period of 15 years). Rajasthan unit 3&4 were sanctioned in 1985-86 and connected to the western grid after completion in the year 2000 (gestation period of 15 years).

Even after 4 decades of experience under the NPCIL belt, things haven’t changed for better. Consider the latest examples of two units each of 700 MW capacity PHWRs to be built at Kota in Rajasthan (RAPP 7&8) and at Kakrapar (KAPP 3&4) in Gujarat state.  While these units are under construction for past 3-4 years, both these projects are already delayed by over three years each beyond the original time schedule.  The latest in this series of 700 MW PHWR type reactors, the Gorakhpur-Haryana Anu Vidyut Priyogana (GHAVP), has a similar story.  GOI gave administrative and financial sanction to GHAVP in Feb 2014. This project is already delayed as no orders have been placed till date for the power plant equipment, components and civil works. After placement of civil works order, it will take about one more year to reach ‘First Pour of Concrete (FPC)’ milestone for GHAVP. In the approved schedule of GHAVP, the FPC was scheduled in June 2015. There are endless slips in each of the under – construction projects at RAPP, KAPP, GHAVP and these projects are going to mimic cost and gestation period history of their predecessors at Kaiga, Narora and Rajasthan. This is classic case of ‘those who do not learn from history are condemned to repeat it’. 

The first unit of GHAVP was scheduled to be completed in 63 months and the second unit in 69 months, in order to supply power to the grid by September 2020 and March 2021 respectively. In the Parliament reply given in December 2015, GOI has stated that the work will start only in early 2016. This is already an admission of delay by two years in project activities startup. Without the Civil Liability issue being settled and Indian Nuclear Insurance Pool (INIP) agreement with NPCIL and with the suppliers, no orders could possibly be placed on domestic and international suppliers for any hardware and services for GHAVP.  No clear commitment of date is available to close the INIP and Civil Liability for Nuclear Damages for Gorakhpur nuclear power plant. How much this plant would be further delayed in addition to the 2 years delay that has already taken place is anybody’s guess.

There is going to be substantial financial penalties for such delays in implementing GHAVP. GOI is paying for 30% of the project cost as equity from its budget. The capital expense required to complete the 2×700 MW capacity GHAVP plant, including Interest During Construction (IDC), was fixed with reference to the starting year 2014. We are now in Jan 2016 and no orders for equipment’s and components have been placed by NPCIL for GHAVP. The original estimate to complete GHAVP was INR 21,000 crores. As per my estimate, for 3 years delay the project cost would have to be revised upwards by about 21%.  The revised cost for GHAVP should be INR 25,000 crores for 1400 MW capacity power plant, i.e., INR 17.8 crores per MW. Given the track record of NPCIL in completing the nuclear power projects, it is unlikely that GHAVP would finish even at this revised estimated price. The often touted cost of generation from GHAVP in public domain @ INR 6.5 per unit in 2020 would most likely be revised to INR 7.5 by the time it is completed, provided the delay in restricted to just 3 years.  Should further delays occur, GHAVP cost of generation to be supplied to the gird may reach INR 8 per unit.

 It is clear that domestic nuclear capacity addition is too little too late. These PHWR type domestic nuclear power plants of 220 MW and 700 MW unit size are always inordinately delayed, costs are doubling or trebling from that of original estimates and time lines to complete them range between 10-15 years. The mandarins of nuclear power program in India have not been able to master the art of implementing program on commercial lines and decades have gone by hoping that the situation would improve. There are no evidences available that could promote positive changes and hence in the overall scheme of things in Indian power sector, the domestic nuclear power program has lost its plot.

A peek into history of importing nuclear reactors by India

It may be of interest and historical importance to recount how first US deal in mid-sixties and later on Russian deal in eighties was struck to import nuclear power plants by Government of India? The Indian Atomic Energy Establishment (AEE) under its first Chairman Dr. Homi Bhabha had decided to set up a commercial nuclear power plant as early as in 1958-59. A site was chosen at Tarapur village located on the shores of Arabian Sea, about 120 kilometers from the Bombay city, in Maharashtra state.

TARAPUR ATOMIC POWER PLANT: The group assigned this task in the then AEE, considered French versus British reactors using natural Uranium, Graphite moderated and Carbon Dioxide cooled as the most suitable for Indian context. Once the word spread about Indian interest, several world-renowned vendors contacted the team assessing the reactor types. Even though the task force expert’s general view was veering towards natural Uranium type design, Westinghouse sent General K D Nicholls to speak to Dr. Homi Bhabha and explain techno-economic features of their Pressurized Water Reactor (PWR). Around this time General Electric (GE) was developing the Boiling Water Reactor (BWR) type reactors. GE soon followed and jumped in the fray and showed up in India to make presentations to AEE.

It was after considerable persuasion by American vendors the Indian team agreed to receive their bids also for evaluation. The French reactors were in use by their national utility Electricite de France (EDF) of heavy water types and UK ones were used by Central Electricity Generating Board (CEGB), cooled by CO2 gas. The Canadian and US offer from General Atomic were rejected, as they were not based on mature technology. The French expert who dealt with Indian team was Mr. Claude Bienvenu. Dr. Bhabha was also a good friend of Bertrand Goldschmidt, a co-member from France in International Atomic Energy Agency (IAEA) Scientific Advisory Committee, in sixties. Both countries ( India and France) leadership had identical views on freedom from safeguards, contrary to US objective to aggressively push for these controls, even as early as mid-fifties.

It was at this time that General Electric (GE) and Westinghouse offers pitched in rather strongly. The main features were low cost coupled with some very strong lobbying for sale by US Atomic Energy Commission (USAEC) Chairman and Noble Laureate Dr. Glenn Seaborg. Dr. Seaborg was also a good friend of Dr. Homi Bhabha, but differed with Dr. Bhabha on safeguards issues for reactor supply. Eventually it was the diluted safeguards and low cost that won the day for AEE and GE reactor was selected. Indian government bought Boiling Water Reactors (BWRs) fueled by enriched Uranium, 2×200 MWe capacity units for 200 million USD-estimated cost. It was funded by USAID @ 0.7% interest rate with 40 years tenure. French lost the deal.

RUSSIAN VVER AT KUDAMKULAM:  It is instructive to note the chequered history of Indo-USSR agreement that beset the purchase of two-unit nuclear power station at Kudamkulam, VVER type, requiring life time guarantees of low enriched Uranium fuel supplies. Negotiations were going on from mid-eighties onwards. By this time, India had already positioned itself in IAEA and UN Bodies, in a unique situation of not accepting full scope safe guards of its nuclear facilities and did not accede to the Non Proliferation Treaty (NPT) and Comprehensive Test Ban Treaty (CTBT) obligations. In this context, the potential of any commercial cooperation between European and North American countries with India was practically ruled out. The then Soviet Union (USSR) was willing to supply reactors if India submitted the imported reactors to inspection and safe guards while isolating the other facilities under Indian Nuclear Power program. Dr Homi Sethna was the Chairman of DAE when it was first mooted. He did not like the idea. When Dr. Raja Rammana took over from him as Chairman of AEC, he immediately sent missions to USSR for negotiations.

Mrs. Indira Gandhi, the then Prime Minster was unfortunately assassinated on 30th October 1984 at Delhi. The Project lost a tenacious supporter and the deal went into limbo. Another blow to the credibility of Russians was delivered by the disastrous accident in the RBMK type nuclear reactor operating at Chernobyl on 26th April 1986 killing over 31 persons and costing billions of Roubles to clean up. Mr. Rajiv Gandhi was the PM and had many reservations about buying Russian supplied nuclear reactors. Dr. M R Srinivasan, the then Chairman of AEC, managed to convince the Indian Prime Minister. Russian deal neither obliged India to change its NPT stance nor to sign the full scope safe guards. Cleverly, Russia formally joined NSG club after the deal with India was signed and sealed. Mikhail Gorbachev and Rajiv Gandhi finally signed the agreement in a glittering ceremony in November 1988 at Delhi.

At Kudamkulam, in the state of Tamil-Nadu, Unit 1 of 1000 MW capacity went into commercial operation by 31st December 2014 and Unit 2 of 1000 MW capacity is likely to go on line by early 2016.

Indo-Japanese agreement on civil nuclear cooperation

Once the deal is signed by both countries (beyond the MOU that is signed between the two head of the states on Saturday at New Delhi) GE – Hitachi (for ESBWR Type NPPs) and Westinghouse Electric Company – Toshiba (AP 1000 Type NPPs) could look forward to sourcing of critical hardware, particularly Reactor Vessels, Turbines, Generators, SS pipes and Special alloy blades & tubes etc. manufactured in Japan for the Indian Nuclear Power Plants (NPPs). While to conclude civil nuclear cooperation has taken many years, it augurs well for Indian nuclear power program.

Nevertheless one should keep in view the following key points:

(i) This deal provides no answers to resolve all the outstanding concerns about the Civil Liability for Nuclear Damages (CLND of 2010) recoverable from suppliers to NPCIL, in case of extremely unlikely reactor accident causing damage to life and property in public domain. CLND will remain a thorny issue between French AREVA, US based GE & WEC. The Indian nuclear insurance pool (INIP) may provide only part solution to the foreign suppliers concern.

(ii)  One way to extricate itself from the clutches of CLND , Japanese manufacturers should not enter into direct contract with NPCIL.  They should supply their hardware, technology to the main reactor vendor only, AREVA, WEC and GE. This way the Japanese companies will most likely be excluded from the definition of Supplier (Refer to Chapter 5, Section 24 of the Civil Liability Rules, of November 11, 2011) and hence the Right of Recovery shall not be available to NPCIL against such indirect vendors to main contractors. This is legally safer route for component manufacturing companies located in India and abroad to de-risk them when working for NPCIL projects.

(iii) On the other hand, whether AREVA, GE and WEC will succeed to sell their reactor(s) to NPCIL is a moot question. The key challenges will include among other factors the Capex and cost of generation of electricity form these NPPs to the grid. NPCIL has often publicly declared their target generation cost of INR 6.5 per unit in 2022-23 from imported Light Water Reactors (LWRs).

(iv) The Russian public sector reactor vendor M/s Rosatom with its industrial partners have already created a benchmark for Capex and Tariff in Indian context through their Kudamkulam reactors 1&2 and the next in line viz., KK 3&4 ( Capex is INR 20 crores per MW). This benchmark will be hard to match for US NPP supplier’s viz., GE & WEC and French AREVA, to NPCIL as client.

(v) On the technology front, there is no doubt that Russian VVER has matured into a very safe plus well equipped with state of art nuclear reactor, even from European point of view. VVERs are sold to Finland, Turkey, Egypt and Bangladesh.

It will be indeed a tough call to succeed with NPCIL for French and US companies, with or without Japanese technology support.

India must add nuclear power plants rapidly – Employing domestic PHWRs and imported LWRs

The Government of India through the Department of Atomic (DAE) is managing the Indian Nuclear Power Program. DAE over the decades has been employing standard logic to justify the relevance of nuclear power generation in India. This logic consists of highlighting the limitation of burning coal for thermal plants, hydro potential being limited by nature; gas and oil as fuel for power generation are to be imported causing unending and heavy burden on economy. The renewable energy is a good option but not available as base load for the grid etc. Strictly speaking, DAE was never in need of any of these arguments as they (DAE) have had practically free run to manage the Indian Nuclear Power program, since its inception – early fifties.
I always had a different take on the reasons for going for nuclear power generation in India. Nuclear technology is an esoteric business. It takes a lot of funding, years to prepare highly trained manpower and building solid foundations of institutional learning spread over decades, in order to master nuclear technology. India had attained this stage by mid-nineties, after toiling for many decades. This has not come easy for the country.
To get a perspective let us take a peek into the history of evolution of nuclear power generation since late fifties. In the year 1963, fierce competition to supply nuclear reactors to DAE was going on among three countries viz., France, UK and Canada. But one fine day US government offered $ 200 Million of funds under USAID at low rates of interest (@2%), deferred payment (repayment would start 10 years after commercial power generation) and term loan payable in 30 years, to buy the Boiling Water Reactors (BWRs) from USA. Dr. Homi Baha singed the deal under 123 agreement between India and US. A consortium of GE, Combustion Engineering, Bechtel and others were given the order for installing first ever nuclear power plant in India. In October 1969 the 2×210 MW units were put into commercial operation at Tarapur, Maharashtra State. However, these units were built as Turnkey projects with minimal participation by Indian engineers and scientists.

Dr. Bhaha had chosen Canadian technology as mainstay for India before he died in the unfortunate air crash in the French Alps, in January 1966. As a result of his choice, no more reactors were purchased from USA. The next in line were bought from Canada. Canadian designed and built 2×200 MW Pressurized Heavy Water type nuclear plants at Kota in Rajasthan during mid-seventies were based on a partnership of sorts between the two countries. But, one fine day Canadians quit the project in 1974 following the Canadian government directive to their nuclear experts, when peaceful nuclear explosion was conducted during Indira Gandhi government in May 1974. Indian Scientists and Engineers that were under the apprenticeship of Canadian team were left high and dry. Unit 1 was commissioned by 16 December 1973 but the Indian engineers took some additional number of years to overcome the sudden set back and managed to commission the second unit by 1st April1981, on their own.
The fate of mid-seventies compelled India to indigenize nuclear technology. It was a Herculean task that required capacity development of domestic engineering knowledge, developing local manufacturing and management skills to design, build and operate nuclear power plants to very demanding and exacting global standards.
Today we have 21 nuclear reactors in operation at 7 locations in India. Another 6 reactors are under construction. This huge cumulative experience and 300 years of reactor operation are now handy with the Indian government. Very few countries in the world can claim to possess this kind of front end technology (Uranium mining and nuclear fuel fabrication) to back end experience (fuel reprocessing to mainly recover Plutonium, waste disposal and management of high level radioactive waste from reprocessed fuel) of nuclear power generation business. Given this background, India should capitalize on nuclear technology option with dispatch.
Climate change is the most compelling logic to pursue nuclear power generation for India today. Economics of power generation, though it is important but, secondary in nature. We cannot leave legacy of polluted atmosphere by burning coal, gas and oil to meet our current energy needs and not bother about the future generation. It is our duty and DAE has to contribute in significant and speedy way to fulfill this obligation. Climate change has arrived long ago on global scene, there has been a paradigm shift in the energy landscape due to international concerns and compulsions; rapidly exploiting nuclear power is a must for India.

Recapturing India’s history of Importing Commercial Nuclear Power Plants

A telephone call was made by US President to Prime Minster of India on the evening of 25th March 2005. Events that unfolded during following two and half years in India and USA in their respective legislatures, media commentaries on Indo – US civil nuclear energy cooperation, reached a closure once US President George Bush on 8th October 2008 signed the enabling legislation number HR 7081. Later on, Nuclear Suppliers Group (NSG) waiver was obtained after a substantial intervention made by US, France, Russia and UK on behalf of India to overcome the objections of several countries from Europe and South Asia in September 2008. NSG is 45 member Nations club that controls trade in civilian nuclear hardware, technology and fuel supplies. This NSG waiver was essential in order to import material, technology and services by Government of India. As of today, several Light Water Reactors (LWRs) from reputed vendors are on offer and Department of Atomic Energy (DAE) along with the advice and technical expertise of Nuclear Power Corporation (NPC) is engaged in the process of negotiating with France, USA and Russia.

However, it may still be of interest and historical importance to recount how first US deal in mid sixties and later on Russian deal in eighties was struck to import nuclear power plants? Indian Atomic Energy Establishment (AEE) under its first Chairman Dr. Homi Bhabha had decided to set up a commercial nuclear power plant as early as in 1958-59. A site was chosen at Tarapur on the shore of Arabian Sea, about 120 kilometers from the Bombay city, in Maharashtra state.

TARAPUR ATOMIC POWER PLANT: The group assigned this task in the then AEE, considered French versus British reactors using natural Uranium, Graphite moderated and Carbon Dioxide cooled as the most suitable for Indian context.

Once the word spread about Indian interest, several world-renowned vendors contacted the team assessing the reactor types. Even though the task force expert’s general view was veering towards natural Uranium type design, Westinghouse sent General K D Nicholls to speak to Dr. Homi Bhabha and explain techno-economic features of their Pressurized Water Reactor (PWR). Around this time General Electric (GE) was developing the Boiling Water Reactor (BWR) type reactors. GE soon followed and jumped in the fray and showed up in India to make presentations to AEE.

It was after considerable persuasion by American vendors the Indian team agreed to receive their bids also for evaluation. The French reactors were in use by their national utility Electricite de France (EDF) of heavy water types and UK ones were used by Central Electricity Generating Board (CEGB), cooled by CO2 gas. The Canadian and US offer from General Atomic were rejected, as they were not based on mature technology. The French expert who dealt with Indian team was Mr. Claude Bienvenu. Dr. Bhabha was also a good friend of Bertrand Goldschmidt, a co-member from France in International Atomic Energy Agency (IAEA) Scientific Advisory Committee, in sixties. Both countries leadership had identical views on freedom from safeguards, contrary to US objective to aggressively push for these controls, even as early and mid-fifties.

It was at this time that General Electric (GE) and Westinghouse offers pitched in rather strongly. The main features were low cost coupled with intense lobbying for sale by US Atomic Energy Commission (USAEC) Chairman and Noble Laureate Dr. Glenn Seaborg. He was also a good friend of Dr. Bhabha, but differed with him on safeguards issues for reactor supply. Eventually it was the diluted safeguards and low cost that won the day for GE. Indian government bought Boiling Water Reactors (BWRs) fuelled by enriched Uranium, 2×200 Mwe capacity units for 200 million USD-estimated cost. It was funded by USAID @ 0.7% interest rate with 40 years tenure. French lost the deal.

RUSSIAN VVER AT KUDANKULAM: It is instructive to note the chequered history of Indo-USSR agreement that beset the purchase of two-unit nuclear power station at Kudamkulam, VVER type, requiring life time guarantees of low enriched Uranium fuel supplies. Negotiations were going on from mid-eighties onwards. By this time, India had already positioned itself in IAEA and UN Bodies, in a unique situation of not accepting full scope safe guards of its nuclear facilities and did not accede to the Non Proliferation Treaty (NPT) and Comprehensive Test Ban Treaty (CTBT) obligations. In this context, the potential of any commercial cooperation between European and North American countries with India was practically ruled out. The then Soviet Union (USSR) was willing to supply reactors if India submitted the imported reactors to inspection and safe guards while isolating the other facilities under Indian Nuclear Power program. Dr Homi Sethna was the Chairman of DAE when it was first mooted. He did not like the idea. When Dr. Raja Rammana took over from him as Chairman of AEC, he immediately sent missions to USSR for negotiations.

Mrs. Indira Gandhi, the then Prime Minster was unfortunately assassinated on 30th October 1984 at Delhi. The Project lost a tenacious supporter and the deal went into limbo. Another blow to the credibility of Russians was the disastrous accident in the RBMK type nuclear reactor operating at Chernobyl on 26th April 1986 killing over 31 persons and costing billions of Roubles to clean up. Mr. Rajiv Gandhi was the PM and had many reservations about buying Russian supplied nuclear reactors. Dr. M R Srinivasan, the then Chairman of AEC, managed to convince the Indian Prime Minister. Russian deal neither obliged India to change its NPT stance nor to sign the full scope safe guards. Cleverly, Russia formally joined NSG club after the deal with India was signed and sealed. Mikhail Gorbachev and Rajiv Gandhi finally signed the agreement in a glittering ceremony in November 1988 at Delhi.

At Kudamkulam, Russian Rosatom supplied VVER Unit 1 of 1000 MW capacity went into commercial operation by 1st Jan 2015 and Unit 2 is likely to go on line by early 2016.

Anti Nuke protests at Kudamkulam – Lessons for Nuclear Establishment

It is instructive to follow the public protest at Kudamkulam (KK) against nuclear power plant during past few weeks. The great irony was that VVER technology was accepted for KK after Chernobyl reactor accident took place in 1986 in  Russian backyard. Following this accident the then Prime Minster Mr Rajiv Gandhi wanted to stop negotiations with USSR but he was persuaded to sign agreement with  the President Gorbachev to import 2×1000 MW nuclear power plants to be built by Russians. KK  plant is now ready for commissioning when Fukushima accident in Japan took place in 2011. In one project development & construction  life time of the  Kudamkulam power plant, two most serious nuclear accidents occurred that shook the very foundations of nuclear industry worldwide. It is natural that people would question the wisdom of DAE in the aftermath of such cataclysmic events to proceed with KK commissioning. My views on the way forward for DAE/NPC are summed up as lessons and I hope that the nuclear establishment would welcome constructive criticism .

Lesson 1: If Fukushima was first generation reactor design and “Kudamkulam ( KK) “ the Russian supplied nuclear power plant is 3rd generation design then why DAE would be operating Fukushima type 1st generation BWR located in Tarapur near Mumbai any more? Tarapur is already over 40 years old, put in operation in 1969 onwards and should now be quietly shut down. Tarapur does not have double containment, no core catcher as in KK and If it is not up to the safety standards of 3rd generation features and if KK is any benchmark, DAE should stick to reactors equal in technology& safety features and nothing less. Praising KK deferential safety features between old and new reactor designs will hoist DAE on its own petard.

Lesson 2: Atomic Energy Regulatory Board (AERB) reports to AEC. AEC should have taken the lead and shown the way by de-linking itself and got the law passed to set up independent statutory commission on the lines of CERC in India, paid for by Consolidated Fund of India, 20 years ago. We understand “Nuclear Safety Regulatory Authority (NSRA) 2011 Bill” is to be tabled in Parliament, but only after Fukushima when DAE/ NPC were not receiving support to keep AERB under AEC wrap. I hope new Bill will allow interdisciplinary experts from Finance, Law, Sociology, Environment, and Technology and not necessarily source them from DAE and its constituent wings along with the retired government servants from bureaucracy. A stitch in time could have saved nine. Push for NSRA now for credibility reasons and be eclectic in recruiting its Members.

Lesson 3: Whatever the Pro-Nukes may say against promotion of Solar, Wind etc. in place of Nuclear, there are few incontrovertible facts to be appreciated by DAE mandarins. Renewable Energy in India has come up on its own. Total of 18000 MW by June 2011 was installed in less than 15 years with over 85% capacity commissioned from private investments. Why dumb down Solar, Wind, and Bio Mass, something which is driven by Venture Capitals, Hedge Funds, Bank Loans, and Private Equity money, never experienced by DAE / NPC for their projects, till date. A level of due diligence, transparent and open process by the Financial pundits imposed on the Renewable Energy projects in India is world class. In contrast the whole DAE, NPC and BARC are built brick by brick from Tax Payers money for over 5 decades. In my view Renewable Energy has earned the global respect for innovation, progress and fulfilling its promises to reach commercial viability goal on its own merit. The challenges of  adverse grid impact due to variable and uncertain outputs etc. are purely technology issues that could be fully overcome in coming years. Nuclear power proponents should not grudge if it is over taken in India by Wind, Solar and Bio Mass installed capacities by an order of magnitude in next 5 years or so. This lead will only grow and not reduce over time. Once gird parity is achieved by Solar , the relevance of Nuclear generation could fall by way side. It will be seen as necessary evil required from military & to some extent energy security point of view in USA, Europe, India and China. Renewable Energy which has worldwide acceptance, practices transparent economics and enjoys greater political & public support than Nuclear power can ever attain.

Lesson 4: Here is the economics of renewable energy today in India. Wind power generation cost is about INR 3.0 to 4 per unit, allowing about 12-15 % Internal Rate of Return (IRR). Solar power generation costs about INR 14-16 per Kwhr, will go down in the coming years.  Grid parity will come faster once some emerging disruptive solar technologies will attain commercial scale. There is no substitute for renewable for decentralized and also grid connected supplies for a power hungry nation like India. Renewable is the answer in terms of thousands of MW installed capacity strewn across country. Nuclear power had 50 years lead over Renewable Energy in India. If it could add only 4500 MW by 2012, it is their problem. Renewable may reach over 20,000 MW by the end of this plan period ( 2007 – 2012) , producing more Kwhr on per annum basis than Nuclear power plants put together in the country. Do not bother on commenting on Renewable economics, just do one’s own job well to prove relevance.

Lesson 5: If KK generation cost is claimed as under INR 3 per Kwhr, what is the European Power Reactor (EPR) generation cost that will be set up at Jaitapur in future? In any case the logic of scale should apply here and EPR (1600 MW) compared to KK (1000 MW). Whatever, one cardinal error of judgment that DAE is making is not having public debate on imported reactor economics. DAE should disclose these numbers as public is a key stake holder in all nuclear business of this country. KK protest has proven this point once again where even a fully completed plant can be stalled or shut down. When things go wrong, DAE is rendered helpless and starts counting on PMO. What happens if tomorrow PM is not in love with nuclear power in India? If new PM or political party alliance at Centre would not care to support it to the hilt than it will drive away vendors and suppliers in no time. Intellectuals, think tanks, independent research institutes, writers, influence peddlers were never allowed to flourish who could have been a great source of moral support . Nuclear Liability Bill is an example of what could happen when political support starts dwindling in Parliament.

Nuclear Power – Ideas to promote its rapid growth in India

The Fukushima accident on 12fth March 2011 has dented the image of Nuclear Industry very seriously once again. This was third serious accident after Chernobyl on 26th April 1986 and Three Mile Island on 28th March 1979. The impact of nuclear reactor accidents is magnified due to its direct impact in the beginning and the after effects of radiological products lingering in the atmosphere, food chain and water and potentially causing health hazards for years to come. The public perceptions about nuclear power remain negative for years like a long life radionuclide.

There are industries that we are dependent on like aviation, mines, roads, automobiles, bridges, rail road’s etc. These industries too kill thousands each year. Nuclear power is facing difficulties in competing to retain its public acceptance even though in absolute terms it did not result in causing deaths of a small fraction of the numbers that other leading industries had been responsible each year.

Nuclear industry has learnt a lot from the back-lash and vicious attacks about its desirability to supply large scale power production through fission route in several countries after each accident. Nuclear accidents will become rarer with experience and learning but are we ready to accept this approach and allow this industry to grow and play a role in Indian commercial power generation mix?

I think we should sustain this technology for many reasons. First of all power will be required for country’s sustained growth and there is no escaping from this fact. Coal based power generation kills thousands each year without you and me making any fuss, Hydro kills environment but we accept it and renewable energy needs time , several decades, to catch up. This is one Industry that has matured for over 60 years developing and using all types of power reactors world over.

In India we mostly used PHWR type but will add PWR and BWR Types as well, once we import them from Russia, USA and France. These are fairly advanced and well evolved technologies and will ensure that in their operating life time they would not fail and cause public danger. We will also master them over the years and add new ones on self-reliant basis.

Each reactor adds more than 1000 MW installed capacity and this is rapid route to add to national kitty of capacity addition from non-CO2 generating power production units.

Here are some ideas to accelerate nuclear capacity addition in India. Like renewable energy power projects government could allow 80% depreciation in year one of operation. No direct Taxes for 10 years from commercial operation. Allow Renewable Energy Certificates (REC) for nuclear power plants and fix minimum forbearance price of INR 1.5 per unit. Make it salable in Energy Exchanges like IEX in India. It will be sold like hot cake to meet the Renewable Energy Portfolio (RPO) obligations of states utilities to (about 10% of total consumption should come from Renewable Energy quota on per annum basis) to buy green power. The market (buyer of nuclear power) will only pay say INR 4 per unit for Nuclear Power and IEX type exchanges will generate extra INR 1.5 per Kwhr to meet the viability gap of investor (NPC in this case).

Independent Review of Indian Nuclear Facilities is a Must

• Safety Beyond Rhetoric or Lip Service:      It is time to start thinking about taking steps that go beyond rhetoric that India’s nuclear plants are safe as per the records of operation  and the  PHWR reactors are of design different from Fukushima so we need not worry. Claims that Indian reactors had no accident in our plants, PHWRs are safe and EPR  will be safer, cannot be made in a blanket fashion.
• Accept that Accidents will Happen in India too:        It is not true that we had no accidents at all. Tarapur had radiation leaks, its secondary steam circuits have been permanently shut down due to leaking tubes and therefore both the units operate at 160 MW each, in place of 210 MW as originally designed. Deaths have occurred inside the Tarapur  reactor building in the inert gas chamber while maintenance was undertaken in early years of its operation. Narora in UP state near Delhi, had major fire accident inside the plant building. It was doused in time and the day was saved. 
• EPR May be Hot Potato for DAE:                 So far as European Power Reactor (EPR) is concerned it is my assessment that it would not be economically viable due to opportunity cost comparisons. Safety issues will be secondary , first and foremost electricity generation cost has to be proven, to be comparable to other conventional sources of electricity generation in India,  to the Parliament and public at large. There is otherwise likely to be backlash  that it is a cosy deal and tax payers will be eventually forced to foot the bill.
• Hope is not a good strategy:             Let us examine the other claim that it is the external combination of events that cause nuclear power plants to succumb to accidents. The implication of the message sent out when DAE / NPC said that Indian shores were not prone to Tsunami of the Fukushima type location  are not easily appreciated.  India would not suffer the earthquake of the magnitude experienced in Japan and Tsunami of that magnitude.  Arabian Sea and Indian Ocean shore lines are less troubled. May be true but not for all times to come. There is no evidence that nuclear sites cannot be hit by earthquakes of 7 or 8 magnitude on Richter scale at Narora, Kakprapar and Jaitapur. Similarly no guarantees of size of Tsunami that can hit the Indian shores will be always smaller and manageable. When things go wrong, they do not allow time for correction and back fitting remedial measures.
• Level 5 & 7 Accidents happened under routine operation:      First of all accidents at TMI in 1979 and at Chernobyl in 1986 occurred without any external natural disaster hitting the reactors. Both these accidents  started inside the nuclear reactor  during routine operations. Secondly , only Fukushima accident happened due to combined impact of EQ + tsunami that knocked out the reactor safety systems and led to this Serial accident situation.  Note that accident occurred  at Fukushima after all units were Safely shut down. Thus shutting down a nuclear power plant hit by any natural disaster event or a combination of events could not mean durable safety. In case the nuclear plant facilities become inaccessible as the roads are wiped out due to torrential rains, Earth Quake or any other reasons and radiation levels run high then one needs large number of trained hands to go in and out frequently for salvage operations. On top of that a very experienced and highly motivated team is needed to deal with this kind of situation. Serial accidents can complicate the challenge and therefore in case like Tarapur and Kalpakkam where several nuclear facilities are located as cluster ,  it could require huge resources during nuclear emergency to attend to all of them simultaneously. What would be the estimated cost for such operations, if it ever happens? Who will bear it?
• Defense in Depth :   Let us look at so-called Defence in Depth (DID) concept touted for Pressurised Heavy Water Reactor (PHWRs) in India and elsewhere. These are a collection of passive and active Engineered Safety Features. DID does not prevent accidents from happening inside the reactor core. Once accident happens, they come into play to stop egress of radiation from core into the environment. DID is not prevention but mitigation measure and it is not a prophylactic measure and should be made clear to the audience.
• Manpower Crunch:                 Let us talk of motivation and size of trained manpower in nuclear industry in India. One could put today’s estimate at about 25,000 that includes a few thousand engineers, tradesmen , technicians, management, administration, Real Estate management, procurement department, drivers and cleaners etc. Other than DAE led training schools , there are not enough institutions that could impart the education and knowledge to young engineers and scientists who could supplement sizeable work force to count on. How can the India’s 63,00 MW nuclear power footprint be achieved by 30 to 40 thousand trained manpower under DAE umbrella and very small equity of people located outside in the manufacturing Industry.  Even if we talk of 3 person per MW, it would require 190,000 persons in nuclear industry of high quality ,  dedicated for design, construction, operation & maintenance to support this power program in next 20 years time period. Is  it a pipe dream without implementable blue prints and financial resources at one’s disposal.
• Discontinue practice of  perpetual extensions to Top Brass:               The Nuclear Industry also suffers from lack of leadership. The DAE and NPC should first of all prove that they do not need to give perpetual extensions to their top brass. Second in line would never be highly motivated  lot. How can than one claim that the department has dedicated staff led by motivated leadership? Leave a healthy legacy of grooming second and third in line leadership, else Department of Atomic Energy (DAE) and Nuclear power Corporation (NPC) will have pygmies on top.  
• AERB to be made independent:    There are some very generic issues to be addressed for the health of Indian nuclear industry. First of all Atomic Energy Regulatory Board (AERB) should not be under AEC. It should be reconstituted as a statutory body under an independent Act passsed by Parliament. Program is growing in size and one needs totally independent regulatory body. Take the case of Central Electricity Regulatory Commission (CERC) and  State Electricity Regulatory Commissions (SERCs) . These are the Central and State Electricity Regulatory Commissions that do not report to Ministry of Power or respective state governments in India. These institutions have now matured and serve with high degree of  independence for all stake holders in power sector as per the Electricity Act 2003. Hundreds of grid codes, tariff orders , regulations , arbitrations, review applications etc have been  handled by these institutions. All the stake holders in conventional ( excluding nuclear power) and renewable energy business in India are OK with the evolution.
• Make Radiation Data Public:           The body that monitors radiation levels in and around nuclear facilities , water analysis, solid waste management etc at nuclear sites should not be under DAE.  Radiation levels monitored all over India at about 90 locations and their data should be known to the public through Internet. This is the one of the ways to garner confidence of the people and also comfort those who live around these plants. There fear from unknown that may befall upon them should something like Fukushima off site radiation leaks occur to the operating reactors next door be allayed constantly.  On a regular basis the data should be published and made available on internet for any one to see. In Fukushima the owner of the plants delayed dissemination of information to media, public and even to government. This raises suspicion that  nuclear reactor and related facilities accidents get reported late and often they are dressed for presentation.
• Political Support can vaporize swiftly:    Political class has to reckon with public opinion and they have sensitive ears and fears of electoral loss. Today many politicians may be siding with DAE but tomorrow if there is ground swell against , they will be first to desert leaving DAE in the lurch. 

Nuclear Accident at Fukushima : Collateral Damage to Nuclear Industry

I have been listening to several TV Debates where anti Nukes are having field day following Fukushima nuclear reactors serial melt down disasters. The Department of Atomic Energy (DAE) mandarins in India  are having tough time to defend India’s nuclear energy program in the wake of one of the unprecedented Nuclear meltdown accident involving several reactors units at one time. “Cluster Meltdown” is the worst nightmare which no nuclear safety experts would have provided for. It has huge implications in short and longterm for this industry.

Whenever a reactor accident happens the plant authorities are prepared as part of their routine drill to respond. The idea is to nip in the bud any potential radiological leakage into environment of the plant and public. I would be surprised if they would have imagined that simultaneous disasters would take place in one facility and they would have to be ready for such eventuality. The penchant to cluster Reprocessing, Spent Fuel Storage and Nuclear reactors all at one place has proved an utter disaster in Fukushima case. A lesson for saefty assesment experts.

Nuclear Industry has to now reckon with a much larger issue  “The Monumental Collateral Damage”. Health and life of people & nuclear power plant workers and auxiliary staff, emotional damage to people by causing Panic and Anxiety, physical and health support for decades to the affected population, damage to environment on long-term basis even after this generation passes away, properties rendered useless due to fission products and radioactive substances / gases coming from non-fission products causing contamination, adverse impact on country’s economy,infrastructure damage,abandoning huge land mass for-ever , where accident happens. In addition the more mundane looking collateral damages would include funding withdrawal by commercial banks for nuclear program world over, inadequacy of insurance coverage, inefficient and corrupt public servants entrusted with disaster management ( Bhopal Gas Tragedy  that killed 20,000 people 25 years ago is one such example)  and lack of money and resources for a third world country to deal with it effectively. Many of these issues had surfaced with Three Mile Island (TMI) and Chernobyl accidents. With passage of time these were ignored / forgotten  by common man over years.

Unfortunately there is no comparable man-made disaster that could leave such long-term and lingering damage to humans, flora and fauna than a massive amounts of gaseous, solid and liquid radiation let off in environment due to combination of unintended human failures married to natural disasters. And Fukushima is one more such proof recently delivered by the nuclear industry to world last week.

This raises some very fundamental questions. If a nuclear power plant is made disaster proof against Tsunami, Air Plane Crash,  Earth Quakes, Missile attacks from boats and ships , terror attacks on the plant site by suicidal fanatics, internal sabotage, reactor core catcher to arrest molten core if it ever happens again then the nuclear power plant well become obscenely costly item.  With no financial / bank funding appetite it will never get off the ground solely based on Utility resources and / or government financing / subsidising the project.  Who will buy this expensive power  when other sources like Wind, Solar and Bio Mass are reducing their generation cost with time and claim CO2 free impact into earths atmosphere. This kind of capital cost for bullet proof nuclear power program cannot be paid for any where in the world. 

The worst nightmare for Nuclear Industry is  drying up of the pool of  political goodwill & public support in democratic countries.   This  phenomena had materialised in USA after the TMI accident at 4 pm on  28th March ,  1979 at Dauphin County in Pennsylvania near Harrisburg. President Jimmy Carter never supported nuclear industry following this event. His disinterest led to US loosing out on Nuclear Business for over 20 years and no new nuclear power plant was built-in that country since than.

Chernobyl happened in Ukraine ( erstwhile USSR) on 26th April 1986. It is only nuclear reactor accident so far classified as a Level 7 accident that ever happened till date. There is reasosn to believe that Fukushima is inexorably reaching to this category of accident description.  In Chernobyl case there was rupture in reactor vessel it self due to power spike. So the fuel rods and fission products were out in open. Since the surrounding material to this vessel was Graphite ( Carbon in purest form) it caught fire when exposed to air at high temperatures sending plumes of smoke out and carrying along with it tons of radioactive material from the core of the reactor into the sky. Many countries in Europe were affected as the Plume travelled  with time. At least 50 deaths were directly attributed to this accident and between 4000 to a million as indirect fatality. The experts keep disputing these numbers all the time. The exact cost of Chernobyl borne by Civil Society will never be known.

Various arguments have been advanced in India about the inevitability of nuclear power, given the endemic power shortages as main driver. All this would have been OK till Fukushima took place last week in Japan, as people had begun to forget Chernobyl disaster. I think DAE has to step back, be humble and modest, stop making tall claims that it can not happen in India, seriously introspect if they really have mastered the safety theory & practice for their power plants.  They need to scrap Officials Secret Act so for as commerical aspect of nuclear power plant design,operation, safety etc are concerned. Rethink is must if it has to survive its nuclear power program on a modest scale following the Fukushima Nuclear Tsunami and retain public support.

It is my view that in India political goodwill and support for  installation of new nuclear power projects will practically disappear in less than 5 years from now. Department of Atomic Energy (DAE) will be predominantly be reduced to being a R&D entity required for this country for  strategic reasons.