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Saturday, September 20, 2008

Nuclear power for India: cost and benefits

A section within India and the non-proliferation Ayatollahs outside are praying hard that the US Congress rejects the 123 agreement and thus mark the end of the much talked about civilian nuclear deal with the United States. But their hopes were actually dashed at the meeting of the Nuclear Suppliers Group in Vienna last month when India received the waiver from the group of 45 nations that entitles India to enter the world of nuclear trade even without signing the NPT.

It is difficult to imagine that President George W. Bush would not do all he can to see that the 123 agreement sails through the Congress. He has invested heavily in the civilian nuclear deal, convinced that it will herald a new chapter in Indo-US bilateral relations. It can also be seen as a significant indication that Washington no longer sees India and Pakistan with the same prism.

When the Pakistanis whined and asked the US for a similar deal, Bush had summarily rejected it because Pakistan was ‘another country’, different from India in many ways—a clear reference to the roguish ways of Pakistan. Of course, Pakistan is now looking to China to give it something similar.

For India, the next logical step after the NSG waiver would appear to be starting work for building reactors for electricity generation. With nuclear cooperation agreements already in place with France and Russia, it may not be difficult to look for options while shopping for new generation nuclear reactors even if for some reason the US Congress turns down the 123 agreement. But there are questions that have to be considered before the country starts working on tripling its nuclear power generation—the stated target of nuclear power generation.

It is finding money to buy and build reactors that may come up as an initial hurdle. The cost of building a nuclear reactor is prohibitive. There are many who believe that it may not be wise to spend too much money on new reactors. Even if the country can raise the necessary funds from taxpayers—the investors are not known to be keen on lending money for ‘unprofitable’ projects-- the electricity generated by a nuclear reactor will not come cheap.

The question of electricity tariff needs to be considered seriously because it has become a very sensitive political issue. After the trouble at Dhabol in Maharashtra the electricity tariff issue has perhaps dispelled many potential investors in the power sector. The government’s efforts at augmenting power supply cannot succeed without help from the private sector which needs advance assurances on the tariff issue.

Despite all the advantages that nuclear power is supposed to offer it is a very costly affair. In defence of nuclear power it is said that it is the initial capital cost that is very high and thereafter it is not a very costly business. It should not be necessary to impose a high tariff for supplying power from nuclear plants. But it will still not make nuclear power cheaper than the hydel or thermal power that currently meets the bulk of electricity supply demand in the country.

Some way, therefore, will have to be found to get round this problem. Perhaps, the government might like to explore the possibility of selling all the nuclear power generated in future, or the major part of it, to bulk consumers like the industries. Indian Railways could be another possible client for nuclear power but the populist politics in the country would perhaps never allow the railways, already used to cheaper tariff, to pay high bills for electricity consumption.

In the present scenario of acute power shortage across the country it is common to see many industries depending heavily on captive power plants. The cost of electricity generation with these diesel-run mini plants is also high. The industrial sector will certainly protest but it will be in a better position to absorb the high cost of nuclear electricity in comparison with the agriculture sector and the domestic user.

A question might arise that if there is going to be a problem of selling nuclear power why go for it? To go back further, why have the deal with the US at all if in the end nuclear power is to be beyond the reach of most people in the country?

If the arguments of most of the critics of the nuclear deal are to be listened carefully it would be apparent that very few voices have been raised about the economics of the nuclear deal with the US. It is politics all the way. The BJP is carping about the deal because despite preparing the groundwork for it, it is the Congress which is cornering the credit for the Indo-US civilian nuclear deal. The Left is opposed to it because of ‘ideological’ reasons—dislike for anything that is associated with the US, except when the dollars flow into West Bengal or Kerala. (What about Tripura?)

Among the many alternative sources of energy nuclear power is a key component, especially when some of these alternatives are still not found viable. In many parts of the world it is being given a fresh lease of life even as some of the misgivings about the plant safety and waste disposal remain. Britain has become perhaps the most ardent supporter of nuclear power, having decided to revive old plants and build many new ones.

In the current presidential race in the US the Republican candidate, John McCain has spoken of building 45 new nuclear reactors with an investment of $315 billion. Forty years ago the Italians had said through a referendum that their nuclear energy programme be scrapped. Italy became the world’s biggest importer of electricity. Now the Italians are planning to revive the nuclear power industry.

France probably never had much reservation about nuclear power as nearly 80 percent of its needs is supplied by nuclear plants. France is also the largest exporter of electricity. The resistance to nuclear electricity in Germany is breaking.

Despite all the controversy surrounding the Iranian nuclear programme the fact is that the government in Tehran has been maintaining all along that the Bushehr plant is meant to produce electricity. Russia, another big producer of oil and gas, has a thriving nuclear power sector. In fact, most of the major oil producers are keen to run nuclear power plants. In such a context India cannot afford to turn its back on nuclear power generation. But each country has its own problems and in India the tariff remains a key issue in electricity supply. It needs to be dealt with before the country leaps into the age of nuclear electricity.

(Source: Asian Tribune)

1 comment:

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