Revival of the Nuclear Dream

In IIT Kanpur I knew a fellow who whenever he was asked about his grades would reply, "Don’t ask me my present grades. But next semester I am going to get all ‘A’s. The statements of the Indian nuclear establishment are similarly futuristic.

The story of the electricity sector in India is a story of large scale failure. The failure is so apparent that it hardly needs any kind of argument or proof. Endemic power cuts, frequent unscheduled trips, the total imbalance between demand and supply on the one hand and the huge conspicuous waste on the other are all everyday manifestations. However, when we narrow our focus to the nuclear sector alone, the failure has been so abysmal that it beggars description.

Let us start with some projections just to get a feel for how good nucleocrats are as futurologists.

1. In 1962, Dr Homi J Bhabha made a 25 year forecast of nuclear capacity of 20,000 MW by the year 1987.

2. In 1985 Dr Raja Ramanna launched the country on the programme of creating a nuclear capacity of 10,000 MW by the year 2000 which would have had not only a large number of 500 MW Pressurised Heavy Water Reactors working but also a prototype 500 MW fast breeder reactor in place. "Our programme of 10,000 MW of PHWRs by the year 2000 will, starting at the beginning of the next century, lead to a much bigger programme of nuclear power through fast breeder reactors which have already been demonstrated on a commercial scale in other countries and the development of which has already been taken up in our country. Nuclear energy is the only source of power in the future."

3. In a speech in Cochin in February 1991, Dr P.K. Iyengar said, "Present installed capacity of nuclear power stations in operation is 1465 MW. The second unit at Narora, two units each at Kakrapar, (KAPS 1 & 2) Rajasthan (RAPP 3 & 4) and Kaiga (Kaiga 1 & 2) will be completed in a phased manner with the total installed nuclear capacity reaching 3110 MW by the year 1996

Capacity Today


Original Capacity

Presently Rated Capacity

Production in MWH till September 1997

Capacity Factor





48 %





48 %





19 %





47 %





50 %





46 %





41 %





54 %





30 %





65 %





Coupled to this failure to perform is the fact that reactors have usually taken about three times their originally estimated costs to get completed quite a few years behind schedule and have generally worked to about half or less of their original capacity.

It is not only the long-term forecasts which are off-scale. Even fairly short-term predictions can be way out. In April 1993, after the devastating fire at Narora, Dr Chidambaram predicted that the reactor would restart operations in two months. It took 21 months for the reactor to actually commence operations.


Profits and Losses

Nuclear Power Corporation (NPC) was formed in 1987 as the commercial arm of the Department of Atomic Energy. As of early 1996, its losses were running at more than Rs. 10 billion. Three fourths of these losses were due to defaults on payments by state owned state electricity boards. But the rest are due to poor performance—long construction times, poor load factors etc. The purpose of setting up the NPC was that it could operate like a private company and raise capital from the market and its own resources to fund further expansion and that there would be less government interference in day to day decision making. However, the last ten years have demonstrated unequivocally, that "nuclear power in a country like India cannot be sustained without massive government help." This opinion was expressed as a resolution of the NPC’s own officers association, who in fact wanted that it be disbanded and they be reabsorbed in to DAE and function as government officers.

Some independent analysts have tried to calculate the cost per unit of nuclear electricity. This is a difficult task and the numbers obtained are likely to have no relation to truth. The reasons are massive subsidies which are unaccounted for.

As the following report by Janet Wood in the Nuclear Engineering International (December 1991) makes clear profit and loss statements have no meaning in the Indian context.

At first site the Indian nuclear industry seems to be moving successfully towards a commercial footing. According to NPC, the company has had a good record, making profits of up to Rs 750 million in its first three years and selling power at prices similar to those of coal fired plants. Such figures would give NPC a rate of return of around 11 percent—a considerable achievement, when the average rate of return of India’s nationalised industries is barely above 1 percent.

NPC is able to keep its prices low and record a profit because of the continuing support from the government. It is subsidised in various ways.

Fuel price: NPC buys fuel from the Nuclear Fuel Complex, another quasi-commercial company of DAE. If all production costs were taken into account the fuel bundles would cost around Rs 1000 ($40 in ‘91 prices) each. Instead, the fuel is "hired" at an administrative price set by the DAE.

Heavy water price: The cost of NPC’s heavy water would be around Rs 4000/kg. Even this is not the true cost. The Comptroller and Auditor General’s office had made an audit of the Tuticorin heavy water plant in 1987 and calculated that the actual cost of the heavy water produced was Rs 13,400/kg. But NPC doesn’t even pay Rs 4000. In practice it is assumed to be a non-depreciating asset and is leased to NPC. Since non-recoverable heavy water losses are of the order of ten tonnes per year per reactor, this is a huge amount of government subsidy.

Research and development: NPC has no research and development capability of its own. It relies on the DAE’s Bhabha Atomic Research Centre who provide a variety of services (free of charge) to NPC.

Waste disposal: Although NPC through each plant, deals with its own low and intermediate level waste, it has no responsibility for spent fuel. This is presently stored at the plant site until it can be moved for reprocessing. None of the costs are borne by the NPC. It is assumed that the cost of transport and reprocessing of fuel, as well as any subsequent decommissioning costs will be covered by the value of the plutonium recovered.

Risk insurance: NPC bears none of the costs of insuring against the risk of a nuclear accident or of compensation in case of such accidents—this is assumed to be a government responsibility.

Investment: As a commercial company, NPC is expected to raise one third of its financing from internal resources, one third from private borrowing and one third from government funds. At its healthy rate of return NPC has been able attract private funds but its internal resources are low and government funding has been raised to 50%. This was the situation in ‘91. Now a days NPC is finding it difficult to attract outside funds and pay interest at commercial rates for the funds that it does get. This also has safety implications. The plant under construction at Kaiga is being hurriedly rushed through because of the large amount of interest NPC has to pay for every day of delay.

Nor are these the only subsidies. In the past, the government has willing to compensate NPC directly if production costs cannot be met by electricity price.

Future Plans

Earlier there used to a lot of talk about the three stage programme:

Pressurised heavy water reactors (CANDU) types were to generate 10,000 MW and to obtain plutonium which would be used in fast breeder reactors to obtain more plutonium which would then be used to irradiate thorium of which India has abundant supplies to obtain uranium 233 which would be the fuel of choice and nuclear would produce about 350,000 MW by the latter half of next century.

However, the last few years of financial stringency and the loss of official confidence have thrown in a little dose of realism into these pipe dreams. Suffice it is to say that when Bhabha enunciated this three stage programme he was thinking of a doubling time due to plutonium breeding of about 5 to 6 years. This was because he was thinking of liquid metal fuel reactors which were never built due to technical difficulties. All realistic estimates of breeder doubling times are much longer and this optimistic scenario enunciated above seems impossible even theoretically. Practically, all one can say is that France which was most gung-ho about breeders has just beaten a retreat and the Japanese programme is in the doldrums. The Indian fast breeder research effort true to form is 12 years behind scedule and the FBTR at Kalpakkam and joined the grid at 1 Mwe although the design is for 14 Mwe and its breeding ratio is less than one!

Vision 2020

However, the latest pie in the sky from the nuclear establishment is Vision 2020. The fascination for 20,000 MW remains only now it is another 25 years that they want to do it all in. The questions to ask are

1. Is it possible?

2. Is it desirable?

The answer to the first question depends on whether this is going to be an indigenous effort or are the foreigners to be allowed in. The answer has not been spelt out in detail but enough hints have been thrown especially to the foreigners.

On our own efforts if the nuclear power enterprise is to run as it has till now, the past record of the nuclear establishment is a pretty good indicator of what it can achieve. In fact in the last few years with a loss of credibility and a severe problem in regaining public trust, the difficulty in raising the finances alone would be enough to bury the vision. However, there are other problems as well.

Our programme is primarily based on the CANDU type of reactors. These reactors are of Canadian design and use natural uranium and heavy water. While our reactors have always been in the doldrums and had the lowest capacity factors of any in the world, the Canadians in the early days did demonstrate very high capacity factors. The recent improvement in capacity factors due to upgrades in design of some newer reactors has been touted greatly by Indian nucleocrats. Suffice it is to say that the Canadians had done similar upgrades to their design 25 years ago

In fact there was a time when the performance of the Canadian Candus was the best in the world. However, in the last few years as the reactors have aged newer problems have cropped up and the performance of Canadian Candus has declined precipitously. So much so that a few months ago, their utility Ontario Hydro announced that it was mothballing 7 reactors in one shot. What this probably indicates is a plethora of serious design problems which effect performance with ageing. If this were the case as it most probably is, then vision 2020 would become quite dim by the year 2020.

However, there is the other part to this question. What if foreigners (Westerners) come in to do the job a la Enron and Cogentrix.

Here we have to thank the NPT for saving us from this fate. Our principled stand on the NPT which we have reiterated so often that it has now become almost impossible for any Indian government to change without risk to life and limb stands as a shield in the way of foreign participation in the nuclear field. Unfortunately in the modern world one cannot take anything for granted. The recent US Chinese nucler deal shows that when money talks non-proliferation concerns go to sleep. The nuclear suppliers in the West are desperate for markets and they do have strong clout in the government.

What about the Russians? There is no doubt that Russians would love to nuclearise India. The conditions of their nuclear workers who have not been paid wages for months has produced 150 kilometer long protest marches. So it is doubly interesting that India should go in for this technology which has left its mark all over the world from Chernobyl to Techa, for a sum of reportedly 17,000 crores of Rupees for two thousand Megawatts, which comes out to more than twice the Enron rip off. But even the Russians are going to find it difficult to fulfil 2020, because they too have now joined the Nuclear Suppliers Group which does have an embargo on non signatories of NPT like India. The Koodankulam deal was originally negotiated before Russia had joined this cartel.

To come to the second question of desirability even if possible, one must again look at the record of the nuclear plants in the world and especially in India.

Nuclear power is on its way out from Western markets. It had lost whatever public credibility it had long ago. But now with a deregulated energy market in the wind, the retreat has turned into a rout. In the US there is already a scramble amongst utility executives to sell off or close older nuclear plants. This is especially interesting since nuclear power was supposed to have high capital costs but low operating costs and normally with the capital costs already incurred this should have meant a smooth passage for nuclear.

The only market for nuclear power has been Asia and to some extent Easter Europe. The recent economic downswing amongst the Tigers should put a damper into these white elephants. In Eastern Europe, it is the well executed scam of "bringing up to Western safety standards" that has provided the money to the dying nuclear industry.

In India, all these considerations are secondary. One has only to look at the well documented case of health effects of Rawatbhata to realise that the best part of the nuclear dream is that it is still just a dream.

Surendra Gadekar

Sampoorna Kranti Vidyalaya

Vedchhi 394641 Gujarat India

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