THOSE who witnessed the handshake between Indian Prime Minister Manmohan Singh and US President George Bush after they signed a slew of important agreements in July 2005, knew that history had been made. For among them was a promise to make suitable amendments to allow the civilian nuclear energy industry in the US and elsewhere in the world to supply India with technology and fuel to build and maintain atomic power plants. If all goes well and the US Congress concurs with Bush, by next year India’s nuclear power sector would no longer be regarded as a pariah. It would bring to an end the backbreaking international technology denial regime put into place after the 1974 Pokharan test.

A fresh lease of life had been given to a sector that had never lived up to its promise. But those at the helm of nuclear affairs cautioned the nation to restrain its jubilation and tone down the hopes – for good measure. For various reasons, nuclear power – the ‘good’ side of atomic research – has never lived up to its potential unlike that of its co-joined ‘evil twin’, the atomic explosion. This despite the nuclear haves setting up one of the most elaborate international institutions to both propagate the use of nuclear power and also to prevent misuse.

In recent times, the regulatory mechanism has been severely tested by North Korea and Iran, both signatories to the Nuclear Non-proliferation Treaty, (NPT). But so far the treaty has held together and been effective. That has seen the International Atomic Energy Agency (IAEA) and its persevering Director General Mohammed El Baradei being awarded the Nobel Peace Prize for 2005.

Iran though continues to be charged with gross violations of the NPT and at the time of writing has so far resisted attempts to come around. But with the majority of the IAEA’s Board of Governors including India voting recently to bring the UN Security Council into the picture, Iran is not expected to hold out much longer, unless it throws caution to the wind and embarks on a debilitating confrontation with the world. A face saving deal, the promise of energy aid and nuclear power plant technology as North Korea had been offered, may make Iran see sense and postpone or even give up its pursuit of secretly building a nuclear weapon. This is an important battle that will, among other things, have a bearing with the growth and spread of nuclear energy as a source of power.

In the moment of reckoning, India shed its traditional ambiguity and voted to have Iran’s NPT violations referred to the Security Council. Many political parties (including those in the ruling coalition, especially the left), have strongly condemned the Indian position. Some accused the Congress-led government of selling out India’s national interests to the US. Others said that by voting against Iran, a major oil supplier, India had compromised its overall energy security because the US deal would prove a mirage when it came to enhancing nuclear power. The prime architect of the 1998 nuclear tests A.B. Vajpayee, the former prime minister who spoke on behalf of the BJP, even accused the government of compromising India’s nuclear deterrent by signing the nuclear deal with the US. But there are those including this writer who regard India’s stand on Iran, along with the nuclear deal with the US, as among the most courageous foreign policy decisions that Prime Minister Manmohan Singh has taken in recent times.

 

Why is that so? No one disagrees that Iran developing nuclear weapons is against India’s national interests, as it is to that of most nations of the world. Living with two nuclear neighbours has always been a traumatic experience for India. Pakistan, in the mistaken belief that its new-found nuclear potency would prevent India from launching an all out war, went ahead with the Kargil adventure in 1999 with disastrous results. Pakistan’s ‘bleed India through a thousand cuts’ policy that saw an escalation of terror and bloodshed in the Kashmir Valley since the late eighties is based on the same premise. That it was envisaged after Pakistan felt it gained nuclear parity with India in 1990 is not a coincidence. The logic is that India, despite being needled constantly in Kashmir, would restrain itself from launching a massive conventional retaliation because Pakistan could always threaten to bring nuclear weapons to play knowing that major powers would be forced to step in. Much of India’s rationale for developing atomic weapons is also based on countering the Chinese nuclear threat.

 

Iran, on the other hand, has shown a worrying return of fundamentalist Islamic forces in its recent elections. With the country’s long-term political stability still in doubt, it is not in any responsible country’s national interest to have it develop nuclear weapons. Also, India should not be frightened by its own shadow when formulating its nuclear non-proliferation strategy. India was not a signatory to the NPT and unlike Pakistan, another non-signatory, has an acknowledged impeccable record in nuclear non-proliferation. Some sections in the Indian press have charged that the US signed the nuclear deal with India only after it sought and got a tacit assurance from New Delhi that it would toe its line over the Iran issue. But that doesn’t quite fit. For, by agreeing to make major concessions to India on the nuclear front, the US administration was under fire from its own non-proliferation lobby of endangering the structure of the NPT itself.

The nuclear deal with the US was, in fact, based on far, far greater considerations and can conceivably result in some fundamental changes in both India and the world’s approach towards nuclear power. There is little doubt that India’s nuclear power policy has always been held hostage and has suffered greatly because of its simultaneous focus on building the bomb. The aftershocks of the first explosion in 1974 severely damaged India’s nuclear power quest. In my book, Weapons of Peace: The Secret Story of India’s Quest to be a Nuclear Power, I quoted M.R. Srinivasan, a former atomic energy commission chief, as saying: ‘We were too gung ho about the weapons aspect and power production was jettisoned. The viability of nuclear power itself came under question. Our credibility dipped and we (the power division) ended up carrying the cross.’

 

With crippling sanctions being imposed, the ambitious programme to have nuclear power plants supply 10,000 MW by 2000 remained an unfulfilled dream. To the Indian nuclear establishment’s credit, over the years the country has attained a high degree of self-reliance in nuclear power technology. But it is still far short of targets. By 2005, only 15 power plants with a capacity to generate 3,100 MW are functioning. If the country’s total electricity generation is put at 1,22,000 MW in 2005, nuclear energy constitutes barely 2.6% of the country’s total power generation. (The break-up of electricity generation by type of power plants projected by the Planning Commission in 2002 was 75,500 MW coal, 25,200 MW hydroelectric, 11,300 MW gas, 7,300 MW liquid oil, 3,200 MW lignite, 3,100 MW nuclear, 700 MW diesels and 230 MW wind energy. Because of the failure of the public system, an additional 40,000 MW is generated by the private sector through captive plants or diesel generator sets.) That makes nuclear energy along with alternative sources of energy such as solar and wind power generators only marginal players in India’s electricity generation calculus.

The future projections of the Planning Commission released before the nuclear deal was signed show no significant shift in the percentage contribution of either nuclear or renewable sources of energy like wind and solar power. In the nuclear sector, another seven power plants are in various stages of construction, including two giant 1,000 MW plants being built with the help of the Russians at Kudamkulam in Tamil Nadu. These will double the existing generating capacity of nuclear power plants to 6,520 MWs by 2008. The Union cabinet recently cleared another four sites for setting up additional nuclear power plants – Kakrapar (Gujarat), Rawatbhatta (Rajasthan), Kudamkulam (Tamil Nadu) and Jaitapur (Maharashtra). According to a release by the Nuclear Power Corporation of India Limited (NPCIL) these new sites are expected to increase nuclear power production by a further 6,800 MW, though no time frame has been mentioned. If one goes by existing projections nuclear power should contribute 20,000 MW by 2020. Even projections into the distant future continue to regard nuclear power as a fringe player that would account for no more than three per cent of the country’s total electricity generation.

 

Many of these projections were made before the US nuclear deal was signed. Neither the impact of the Iraq war nor the dramatic surge in crude oil in recent times was factored in. Since all calculations on energy have been impacted by these developments, planners are back to their computers to redo calculations. An immediate effect has been on fuel costs for oil and gas based power projects – considered the big growth area for future power production – that has made this sector suddenly less attractive. The power ministry officials say that while capital cost for construction of gas powered plants is pegged at around Rs 3 crore per MW – the cheapest as compared to others – fuel costs have rocketed in recent times. >From 60 paise per unit it has now shot past two rupees if one goes by current international prices.

 

In comparison, though hydroelectric power plants have a heavier construction cost of Rs 5 to Rs 6 crore per MW, the supply costs have remained relatively stable at 8 paise per unit. Hydel is possibly the cheapest among all other power plants with the exception of wind and solar ones that technically have no fuel costs. But in wind and solar plants – the ‘feel good’ sector as it is called – the extremely high capital cost offset the absence of fuel costs. Solar powered plants, for instance, now cost around Rs 20 crore a MW and as a result electricity costs are put at Rs 8 a unit. In contrast, coal based plants cost around Rs 4 crore a MW to put up and fuel costs continue to be at a reasonable 60 to 80 paise per unit. Nuclear power plants on the other hand have a slightly higher capital cost of around Rs 5 to Rs 5.5 crore per MW to set up while fuel costs have remained at a steady 80 paise a unit.

Based on these estimates, the Union power ministry, whose most recent electricity projections put the country’s need at 4,00,000 MW by 2025, is planning a major expansion in hydroelectric power plants in the coming years. Plans are being drawn up to construct plants across the country to supply an additional 1,00,000 MWs of hydropower to the grid – a four fold increase by 2025.

While there is little doubt that hydro projects are one of the cleanest ways to generate electricity, their massive expansion is likely to face stiff resistance from environmentalists. The humanitarian costs would be high with several lakhs of people living around these watersheds being displaced by dam construction. Apart from that many of these projects would come up in India’s richest forest areas and the ensuing environmental damage would be a major disincentive. Notably however, in both these areas governments have invariably been callous in their approach and deliberately underplayed the human and environmental costs that may make hydroelectric plants less viable.

 

The power ministry is also planning huge expansions in the capacity of both coal and gas based plants. Coal based plants are now looked upon with less favour by planners because of their carbon emissions which contribute substantially to the greenhouse gases in the atmosphere. With growing global warming concerns, countries like India would in the near future also end up paying their share of carbon taxes that may considerably push up costs for generating electricity using fossil based fuels such as coal. If the oil crisis intensifies and there is no major boost in global production of petroleum products, then gas projects would lose their competitive edge with fuel costs increasing exponentially. Unfortunately, restraining electricity production in India is not an answer. India still has one of the lowest per capita consumptions of 600 units in the world. China in contrast has a per capita consumption of 1,800 units while European countries average 8,000 units and the US has the highest with 20,000 units.

These and other recent global developments are forcing many countries including India to do a major rethink on nuclear and other alternative sources of energy such as wind and solar. Nuclear power plants that had so far faced stagnation and even decline in most countries are now being studied afresh to see if they could play a major role in bringing down greenhouse gas emissions in the globe. In 2002 nuclear power accounted for just 17% of the world’s total electricity consumption. In the US it was around 20% of the total consumption while in other developed countries such as France, Germany, Japan and the UK the percentage was much higher. (In France 70% of the electricity generated comes from nuclear power plants). Global projections showed that capacity for generating electricity by nuclear plants is expected to grow by only 5% though overall electricity consumption would grow by 75%.

 

With worldwide concerns about global warming, propelled in part by recent freaky weather, the US has already called for a relook of, among others things, the long-term growth of nuclear power. In 2003, a major study released by a distinguished interdisciplinary group of researchers at MIT and Harvard concluded that in the US, ‘the nuclear option should be retained precisely because it is an important carbon-free source of power.’ However, the report also found that the prospects for nuclear energy as an option were limited by four unresolved problems: high relative costs; perceived adverse safety, environmental, and health effects; potential security risks stemming from proliferation; and unresolved challenges in long-term management of nuclear wastes. Significantly, Professor Ernest Monez, the co-chair of the study group, pointed out: ‘There is no question that the up-front costs associated with making nuclear power competitive are higher than those associated with fossil fuels. But our study shows, there are many ways to mitigate these costs and, over time, the societal and environmental price of carbon emissions could dramatically improve the competitiveness of nuclear power.’

Given the scenario and the riders associated with atomic power plants, India is now poised to take steps to boost its nuclear power generation. That is why the civilian nuclear agreement with the US is important. As Dr. Anil Kakodkar, the ever-cautious Atomic Energy Commission chairman, put it: ‘The growth constraint would by and large be removed for civilian nuclear power if the agreement goes through as we have envisaged.’ The US agreement would help considerably in easing the nuclear fuel supply for newer power plants – currently a major constraint for growth. The country’s uranium resources are put at 60,000 tonnes or enough to meet just 10,000 MW of the Pressurized Heavy Water Reactors (PHWR) that India is building. The nuclear establishment is finding it increasingly difficult to boost the supply of uranium for environmental and other reasons.

The US agreement would have other benefits including the ability to set up giant plants of 1,600 MW capacity using imported Light Water Reactors and ensuring a steady supply of enriched uranium fuel for it. Moreover, by separating the civilian nuclear plants from the reactors used for military purposes, the atomic energy establishment would be subject to far greater accountability. So far there was no objective way of evaluating just how cost effective the atomic energy programme was because of the hidden expenses for making nuclear weapons.

 

The prime minister recently said in Parliament that he would like nuclear power generation to go up to 40,000 MW in a decade. Yet as India expands its nuclear power, as Dr. Kakodkar correctly points out, it must implement the three-stage indigenous programme that the atomic energy establishment has envisaged. That would ensure that India is not replacing one kind of dependency with another – from oil to nuclear fuel – and also allow it to pursue an independent nuclear power generation programme. While the first stage in India’s nuclear programme involved setting up heavy water reactors, the second was moving rapidly towards what are known as Fast Breeder Reactors (FBR).

In his book, From Fission to Fusion, Srinivasan states that if the FBR technology is established then theoretically the same quantity of uranium can support as much as 4,00,000 MW of power for the next 40 years. This, he points out, is equivalent to 200 billion tones of coal – the country’s currently assessed total coal reserve. In the third stage, if the country is able to master the use of thorium as fuel in fast breeder reactors, then it could support a mind boggling capacity of 40,00,000 MW for 50 years ensuring India’s long term power needs and lessen considerably its dependence on other countries for nuclear fuel as well as energy generated from other sources.

 

Of course, till the FBR technology and its viability are proven – and that may be some decades away – this would remain the proverbial pipe dream. The US agreement also opens out the possibility of India cooperating with other major powers in one of the most closely watched nuclear power research projects – the International Thermonuclear Experimental Reactor. Billed as tomorrow’s electricity-producing fusion power plant, the experiment holds the exciting new area of harnessing nuclear forces similar to what the sun uses to generate energy. If proven it could change the energy map of the world and break the stranglehold of oil. But just as in the case of FBR there remains a huge gap between promise and delivery. The larger point being made is that nuclear power is experiencing a dramatic revival. India having invested so much of its resources in developing its capability should ensure that it rides the new nuclear wave.