‘Dangers of nuclear technology being underplayed’

Last Updated: Sunday, May 1, 2011 - 15:05

EA Sarma, who retired from the government as Secretary, Ministry of Finance (1999-2000), and earlier served as Secretary, Ministry of Power (1997-98) and Adviser, Energy, Planning Commission, (1989-94), has just written a series of letters to the Prime Minister, Dr Manmohan Singh, seeking an urgent halt on the nuclear energy programme in India. In his last letter of April 14, Sarma alleged that while many countries have acted promptly, against the background of the nuclear emergency in Japan, to suspend all new nuclear power projects in their respective countries, India was still dithering and toeing the line of the global nuclear multinationals. He told Zee Research Group’s Rakesh Khar in an email interview from Boston that India could not afford an energy strategy that is unsustainable, ecologically destructive and deleterious from the point of view of protection of the livelihoods of the people and that India could not drive its energy plans with police force and suppression of people`s voices. Excerpts:

Q: There are conflicting views on cost advantage or disadvantage of the nuclear energy option. What is your assessment and is there a credible independent view on this?

A: I chaired the last Nuclear Power Pricing Committee of DAE way back during the nineties. I can therefore comment on this. Nuclear power, contrary to popular belief, is quite expensive. The existing price of nuclear power is underplayed, as there are many cost elements that cannot be adequately quantified and there are others ignored. For example, the cost of waste management has never been properly assessed. In fact, the future generations will indirectly subsidise it; the cost is conveniently transferred to our children and grandchildren. There is no lasting technical answer to dealing with the radioactive wastes. Similarly, the decommissioning cost is not accurately known, as very few nuclear power plants in the world have been decommissioned fully. Fukushima in Japan will take ages to decommission. Chernobyl is being “buried” in a sarcophagus, the cost of which Russia is unable to bear fully. International donors are contributing to it! Some estimates place the cost of decommissioning to be higher than the plant cost itself. In India, the price of nuclear power contains a token element to reflect it.

The liabilities in the case of Fukushima run into several billions of dollars, certainly more than the cost of the plant itself. The very fact that foreign investors are reluctant to enter the Indian nuclear scene without a ridiculously low liability cap demonstrates that nuclear power in unviable without heavy subsidies from the tax payer. In fact, the concept of a cap on liability has introduced a moral hazard dimension. The reactor suppliers tend to cut the corners in terms of the design safety and that itself indirectly enhances the risk of an accident and the liabilities associated with it. Finally, nuclear technology is inherently more risk prone than the other technologies. Several other risks have not been fully factored into the cost structure. For example, several nuclear power plants in USA are known to have caused radioactive contamination of both ground and surface water sources. There are occasional radioactive leaks.

Q: At this stage nuclear energy is totally dependent on import of uranium and its costs represent a growth path. Is there an independent view on uranium pricing allaying fears that it might run riot like the crude prices?

A: Tarapur was based on imported fuel but we shifted to indigenously mined uranium for the latter reactors recently, when we reverted to light water technology for Kudankulam. With the opening of the floodgates to imported reactors through the Indo-US nuclear deal and similar other bilateral deals, the sector will soon become heavily dependent on imported fuel in the coming decades. This is subject to a double jeopardy, one on account of the escalations in the cost of imported fuel (linked to the external costs of inputs) and the second on account of exchange rate variations. In addition, as it happened in the case of Pokhran II, fuel supplies could get linked to nuclear tests and a slew of foreign policy postures that India may take (e.g. gas from the Middle East). The last dimension is far more worrisome. It may foreclose India`s foreign policy options.

Q: India has already placed orders for nuclear reactors worth Rs 1600 crore with Alsthom and BHEL. Is the bidding and the pricing process fairly conducted?

A: The 1991 reform scheme missed an opportunity to introduce transparency into getting investments from external sources through competitive bidding. Enron was a good example of it. Nuclear power is no exception to it. All imports are through non-transparent bilateral deals. Areva`s EPRs will cost more than Rs 24 crore per MW (compared to Rs 5 crore per MW for coal) and there is no accountability if this further escalates. EPRs in Finland have already gone through time and cost overruns. Reform can yield positive results only if there is transparency and competition. Neither exists in most cases in the Indian context.

Q: Costs of various nuclear energy projects such as Jaitpur and others are said to meet huge overruns? Has someone in the government been tracking the cost element and what does the trajectory look like?

A: None in the government seems to be worried about the enormous cost to the consumer. The electricity regulators are helpless as the Atomic Energy Act practically confers monopoly on DAE in this. It is ironic that civil society bodies like Konkan Bachav Samithi should analyse the cost on their own, based on reports obtained from many sources, and question the same. Unfortunately, Atomic Energy Act has many non-disclosure clauses, unlike Right to Information Act that mandates complete disclosure. DAE and NPCIL have been unduly secretive about the safety, the risks and the costs. I believe that EPRs will cost the nation heavy by the time they get installed and become operational.

Q: Is it correct that the Department of Atomic Energy, DAE, has consistently failed in its promises made about providing nuclear power? Is there pressure to escalate the potential of the nuclear energy contribution?

A: There have been both time and cost overruns. DAE slipped on targets. But, that was to be expected in any industry that was in a state of development. Compared to the time and cost overruns in the case of the two EPRs being set up by Areva in Finland, NPCIL`s track record has not been worse. Surprisingly, NPCIL improved the availability and Plant Load Factors of its power stations during the nineties, far better than expected. However, considering the track record of the Indian nuclear industry as well as the nuclear MNCs, the targets being cited by DAE are highly exaggerated. Such inflated targets infuse a false feeling of energy security. On the other hand, the potential dangers of nuclear technology are being underplayed.

Q: What is your view on the estimates on nuclear energy by the expert panel on energy requirements headed by Kirit Parikh?

A: The Integrated Energy Policy (IEP) document of Planning Commission, which is the most comprehensive study at the official level, has placed excessive reliance on a supply-oriented energy system tilted heavily in favour of nuclear power. Even that study did not place emphasis on imported nuclear reactors. The Indo-US nuclear deal seemed to have overnight tilted the balance in favour of imported reactors. Apparently, such a sudden tilt was based less on public interest considerations and more on considerations of promoting the commercial interests of the MNCs. As a sequel to this, there has been an orchestrated campaign to paint nuclear energy as a “clean” form of energy, underplay its potential shortcomings and mislead the country on its costs.

Q: How do the solar and wind power option weigh against the nuclear one? What is your assessment of other options?

A: There are no easy alternatives in energy planning. Solar is still extremely expensive (>Rs 12 per peak MW). It requires four times the land per MW compared to a coal-based power plant. Efficiency of conversion of solar radiation is still 12-15% at best. Similarly, wind power too is costly. All these alternative sources of energy are load-specific and location-specific. The solution to future energy needs lies in finding “negawatts”, not new megawatts.

First Published: Sunday, May 1, 2011 - 15:05

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