- Occasional Papers
- Aug 09 2016
India’s Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC) outlines its intent to scale up the country’s clean-energy capacity. At the same time, India’s energy poverty remains a big challenge, and the pursuit of the country’s development agenda is contingent on extending energy access to millions of citizens who continue to lack connectivity to the power grid. While successive governments have long touted nuclear power as the solution to India’s energy woes, actual performance has merely flattered to deceive. India’s waiver from the Nuclear Suppliers’ Group and its agreement with the global atomic body, IAEA, have resulted in limited breakthroughs in the last decade. This paper makes projections for the growth of nuclear power in India through to 2050 and examines the factors that will be critical to the country’s civil nuclear ambitions.
Global carbon emissions have been rising sharply since the start of the 20th century, and countries have adopted various policies in recent years to reduce greenhouse gas (GHG) emissions in different sectors. However, the implemented measures have not been sufficient to negate worsening global warming and climate change. It was in this context that countries agreed to the landmark Paris Agreement on Climate Change at the Conference of Parties (COP) 21 meeting in December 2015.
Ahead of COP 21, member-states submitted voluntary pledges to the United Nations Framework Convention on Climate Change (UNFCCC) secretariat to take action to reduce carbon emissions and adapt to climate change in the form of Nationally Determined Contributions (NDCs). The increasing threat of global warming means that developing countries such as India are under pressure to commit to carbon emission reduction targets and lessen their reliance on fossil fuels. While India remains reluctant to commit to reduction targets and advocates the salience of Common But Differentiated Responsibilities (CBDR) and Respective Capabilities (RC) along with a pointed reference to its low per-capita emissions, it nevertheless continues to expand its base of low-carbon sources of energy. India’s NDC has outlined goals to reduce the carbon emissions intensity of its economy by 33-35 percent by 2030 as well as increase the clean energy electricity capacity to 40 percent of the total installed capacity in the same period.
Perhaps the most important source of energy for India in the coming decades is nuclear power, given its huge potential for growth, emission-free nature and consistent nature of production. A significant expansion of nuclear power can both enable the connectivity of millions of Indians who currently lack access to the power grid and help it contribute to global efforts to tackle climate change by curbing its total carbon emissions.
The Bharatiya Janata Party (BJP) government is intent on significantly scaling up installed nuclear capacity. Prime Minister Narendra Modi struck an agreement with US President Barack Obama on the issue of civil nuclear liability and pushed for a deal with French nuclear giant Areva for the Jaitapur Nuclear Power Plant project during a visit to Paris in April 2015. In June 2016, after PM Modi’s visit to the US, it was announced that the long awaited project for American nuclear giant Westinghouse to build reactors in India was set to go through.
This paper looks into the probabilistic scenarios for future nuclear energy growth in India. The objective is to understand India’s current energy capacity and how nuclear contributes to that, the potential for future growth, and the challenges and opportunities ahead. The paper opens with a brief review of select energy projection studies that offer estimates for energy growth up to 2050 in India and what they predict for nuclear-based generation. The paper then develops its own estimates for India’s installed nuclear capacity by 2050, based on an examination of individual reactor types and their possibilities for development in India. An analysis is then made of the requirements in terms of land area, financial resources, human capital, manufacturing needs, financing and reprocessing and enrichment ability to make these scenarios a reality. The paper closes with policy recommendations for the Indian government to unlock India’s nuclear potential.
India’s energy status
The total installed electrical capacity of India (utilities) was just over 300 gigawatts (GW) as of May 2016. 1 Of this, 210 GW (70 percent) constituted thermal power such as coal, gas and diesel. India is thus highly reliant on fossil fuels to meet its energy demands. Hydroelectric power too contributes a significant percentage with a total installed capacity of just over 40 GW. The total installed capacity of grid-interactive renewable power—which consists of wind, solar, biomass and small hydro—is just under 43 GW. The installed capacity of nuclear power is 5.78 GW, a mere 1.8 percent of the total capacity. 2 In terms of actual power generation, the total electricity generation in India in 2014-15 was 1,278 terawatt hour (TWh), of which nuclear contributed just under three percent. 3
Although India is the fourth largest energy consumer in the world, behind only the US, China and Russia, it continues to remain energy-poor. Its per capita electricity consumption, computed as the ratio of the estimated total electricity consumption during the year to the estimated mid-year population of that year, stood at just over 1,000 kilowatt hours (kWh) in 2014-15. 4 In comparison, developed countries average around 15,000 kWh. China has a per capita consumption of around 4,000 kWh.
At the same time, India’s total carbon emissions are on the rise, with an estimated 2.3 billion tonnes in 2014, or an increase of 7.8 percent over 2013 levels. 6 Since 1990, India’s GHG emissions have risen by nearly 200 percent. 7
In its NDC, India is committing to reduce the economy’s carbon intensity and increase clean energy capacity to 40 percent of the total installed capacity. Nuclear energy—with its massive potential—will have to play a key role in the country’s future energy mix.
Estimates for nuclear power growth: A review
India currently has 21 operating nuclear reactors at six locations across the country, their combined capacity totaling 5.8 GW. Its civil nuclear strategy has proceeded largely without fuel or technological assistance from other countries for more than 30 years. This was a result of its Peaceful Nuclear Explosion (PNE) in 1974 and its voluntary exclusion from the Non-Proliferation Treaty (NPT), which led to India’s isolation from trade in nuclear power plant materials. However, the scope for civilian nuclear trade increased significantly beginning in September 2008, following the Nuclear Suppliers Group (NSG) India-specific agreement. Civil nuclear cooperation agreements have since been signed with the US, Russia, France, Australia and Kazakhstan, among other countries.
In December 2011, the Indian parliament was informed that nuclear power targets were set at 14.6 GW by 2020 and 27.5 GW by 2032. 8 This is a reflection of the fact that India currently has five nuclear reactors under construction all due to finish by 2017, which would add 3.8 GW, raising the total capacity to 9.6 GW. The government’s plan for nuclear to generate 25 percent of electricity by 2050 could mean between 150 GW and 200 GW of installed nuclear capacity. 9
While most studies make projections up to 2030-31, a few others sketch India’s energy pathway to 2050. A few relevant projections can be used for comparison with the estimates of this paper. For example, in October 2012, Avoiding Dangerous Climate Change (AVOID), a UK-funded research programme of the Department of Energy and Climate Change (DECC), published a study on India’s energy pathways to 2050. The study outlines potential pathways for India to reduce its energy and industry-related CO2 emissions in line with international efforts. The TIAM-UCL energy technology model was used to run three scenarios with the aim of minimising costs to the energy system to 2050:
- A reference case with no future CO2 emission constraints;
- A first low-carbon scenario with an emissions constraint of about 2.4 billion tonnes of CO2 by 2050 equating to about 1.3 tonnes CO2 per capita which would be a total carbon emissions increase of 50 percent on 2010 levels;
- A second low-carbon scenario with the same 2050 emissions target as the first but with certain technology constraints and hurdles introduced to account for India-specific challenges based on views provided by energy experts.
The TIAM-UCL model is an integrated assessment model that combines energy technology modelling with a climate module to integrate economic activity with energy usage and climate change outputs. The model represents 16 regions of the world including India, and for each region, energy demands are projected. The model determines the cost-optimal level of energy conversion deployment to meet end-use demand.
As per its reference scenario, India’s total installed capacity of nuclear power in 2050 is estimated at 43 GW. Low Carbon Scenario 1 and 2 predict a total installed capacity for nuclear power of 142 GW and 156 GW, respectively. These estimates are contingent on a dramatic shift away from thermal power and towards nuclear-based generation.
The Energy and Resources Institute (TERI) has also published a report with inputs from the World Wide Fund for Nature (WWF) India. Titled, 100% Renewable Energy by 2050, the report examines the possibilities of a near-100 percent renewable energy scenario for India by the middle of the century. Interestingly, the reference scenario, which makes projections for growth in nuclear capacity along with fossil fuels and renewables, estimates that total electricity generation (centralised and decentralised) will grow by eight times the 2011 levels in 2051, at a compound annual growth rate (CAGR) of 5.3 percent per annum. 10 The total electricity capacity of India is thus estimated at nearly 2,000 GW in 2051, a more ambitious estimate than other studies for the same period. Nuclear capacity is expected to increase to over 100 GW, indicating far higher rates of growth than business-as-usual (BAU).*
The now-defunct Planning Commission had also produced an online tool called India Energy Security Scenarios (IESS) 2047 in 2015, developed in consultation with the UK DECC, TERI, C-Step and Prayas Energy. The tool shows various combinations of energy demand and energy supply pathways available for India and the potential impact of following certain pathways on the energy system and carbon emissions. The model allows users to interactively make energy choices and view the resultant outcomes in terms of carbon emissions, import dependence and land use. The demand and supply scenarios have been projected under four different scenarios:
- ‘Least Effort’ Scenario;
- ‘Determined Effort’ Scenario;
- ‘Aggressive Effort’ Scenario;
- ‘Heroic Effort’ Scenario. 11
The ‘Least Effort’ scenario (Level 1) approximates the continuation of past trends and assumes no major policy announcements or other triggers for increasing generation. At the other end, the ‘Heroic Effort’ scenario estimates what can be achieved by pushing the physical limits of what could guide the growth of a particular component of the energy supply until 2047. 12
For nuclear power, IESS 2047 estimates 11.3 GW by 2047 according to Level 1 projections. In Level 2 this increases to 26.1 GW and in Level 3 this further increases to 45 GW, as per the ‘Aggressive Effort’ scenario. Level 4 sees installed nuclear capacity rise to 78 GW in 2047 after a ‘Heroic Effort’.
Thus, the IESS projections for growth of India’s nuclear capacity are slightly more pessimistic than some other studies. Even an ‘Aggressive Effort’ resulted in just over 45 GW in line with the reference case of the DECC study. In the same manner, by pushing the physical limits of what can be achieved, it estimates just under 78 GW by 2047, far lower than the estimates of 100-150 GW estimated in the low-carbon scenarios of TERI and DECC.
Certain studies have estimated India’s energy future up to 2030 and 2040. Estimates from these can be extrapolated for the purpose of understanding India’s energy status by 2050. The 2015 World Energy Outlook India Special Report, for instance, has developed two scenarios for India’s energy future: an Indian Vision Case and a New Policies Scenario. In the Indian Vision Case, India attains key objectives of universal round-the-clock electricity supply and an expanded share of manufacturing in GDP under the Make in India campaign in an accelerated manner. 13 The New Policies Scenario, on the other hand, features more modest growth estimates for India’s economy as well as for the manufacturing sector.
The Indian Vision scenario estimates total electrical capacity in the country to be over 1,100 GW by 2040, with only 39 GW provided by nuclear power. 14 Interestingly, although the New Policies Scenario has a different total capacity estimate—1076 GW—the projection for nuclear power is the same at 39 GW. 15 Extrapolating the rate of growth for nuclear power from this study would result in about 55 GW of installed nuclear capacity by 2050.
Rajan, et al. conducted an analysis of India’s energy system in 2010 and explored the country’s options for ensuring energy security in an environment of high economic growth. For nuclear power, the analysis projected strong growth based on a substantial increase in imported nuclear reactors being set up in the country with 20-25 GW of light-water reactors (LWRs) capacity installed by 2032. 16 Overall, the study estimated that nuclear power capacity would rise to 40 GW by 2032. 17 Extrapolating that to 2050 would result in estimates of more than 70 GW of nuclear capacity by 2050. However, the challenges to do with liability law, construction of the reactor dome and other issues faced in importing LWRs since 2010 have resulted in only 1 GW of additional LWR capacity added to the grid in the past six years. Installing 25 GW of foreign LWR capacity by 2032, the basis of strong growth in nuclear power predicted in the paper is therefore highly unlikely.
Overall, the consensus in the studies considered in this paper is that it is highly feasible that the installed nuclear power capacity of India could rise to around 40-50 GW by mid-century. On the other hand, for installed nuclear capacity to rise to 100 GW and above, and nuclear power to contribute 25 percent of the electricity produced in the country, the limits of what has been achieved historically and what is possible physically will have to be pushed by tilting India’s energy system comprehensively towards nuclear power.
Projections: Examination of reactor types and their potential for deployment in India
Pressurised heavy water reactors (PHWRs): India’s PHWRs are derivatives of the CANDU design using natural uranium as fuel. Currently, the Indian PHWR programme consists of 220 megawatt (MW), 540 MW and 700 MW units. At present, India is operating 18 PHWRs with a total installed capacity of 4.46 GW. Four PHWRs of 700 MW rating each, two in Rajasthan and another two in Kakrapar, Gujarat are under construction.
The Kakrapar reactors in Gujarat were expected to be online this year, but a delay until next year is likely. The Nuclear Power Corporation of India Ltd (NPCIL) currently lists their expected date of commercial operation as ‘under review’. 18 The two reactors in Rajasthan originally scheduled to be online by mid-late 2016 also seem to be behind schedule, with at least a year’s delay. 19
Assuming no further delays, all four reactors are expected to come online in 2017. Once the four reactors are added to India’s grid, the total installed nuclear capacity of PHWRs will increase to 7.26 GW.
Government sanction is available for four more 700 MW units at present. Assuming a minimum construction period of six years per reactor and simultaneous construction at a maximum of two sites (four reactors) given the rate of construction currently witnessed in Gujarat and Rajasthan, these additional four units will likely be online by 2030, taking the capacity to 10 GW. Assuming no construction delays, the initial reactors in Gujarat and Rajasthan to be successful in their operations and a continuous technology adoption, the rate of deployment is expected to pick up after 2030 with roughly five GW added every 10 years as consistency and predictability of build and technology kick in.
Extrapolating this to 2050 would give roughly 20 GW of PHWR capacity by 2050.
LWR (Russia): India signed a deal with Atomstroyexport of Russia in 1998 for up to eight VVER-1000 and VVER-1200 reactors. The VVER is a Pressurized Water Reactor (PWR) variant using Low Enriched Uranium (LEU) as fuel. The completion of the first two VVER-1000 units at Kudankulam has faced severe delays. In December 2014, Kudankulam 1 was connected to the electricity grid and began commercial operation. This marked the completion of a project that had been ongoing for over 14 years. Kudankulam 2 is yet to come online with achievement of first criticality scheduled for some time in 2016. As of May 2016, fuel loading has begun in the reactor and criticality tests will commence shortly. 20 The reactor is expected to come online on the grid some time in either late 2016 or early 2017.
In December 2014, NPCIL signed another contract with Atomstroyexport during Russian President Vladimir Putin’s visit to India for construction of units 3 and 4 at Kudankulam. The first pour of concrete is expected in 2016. Given recent experience with units 1 and 2, it can be assumed that the total capacity of the Kudankulam VVERs by 2030 would be 4 GW with no other units constructed apart from units 1-4.
Extrapolating that rate of capacity addition to 2050 gives a total VVER capacity of 8.8 GW, assuming that further VVER units to be of 1.2 GW capacity.
European Pressurised Reactors EPR (France): EPRs are third-generation PWRs with advanced safety features, fuelled by LEU or mixed uranium plutonium oxide fuel. In February 2009, Areva signed an MoU with NPCIL to build six 1.65 GW EPRs for the Jaitapur Nuclear Power Plant project and ensure fuel supply for the reactors for a period of 25 years. 21 This project, however, has been in limbo since. Prime Minister Narendra Modi’s visit to Paris in April 2015 was expected to save the project, but that visit only resulted in a techno-commercial agreement between Areva and NPCIL. A pact was also signed between Areva and Larsen and Toubro (L&T) to produce some key components of the reactor domestically. 22
The project could theoretically provide 9.9 GW of total capacity should it be realised. However, various issues are yet to be resolved. For instance, Areva usually sources the outer reactor vessel from Japan. In the absence of an Indo-Japan civil nuclear cooperation agreement, however, this would not be possible. Therefore, the pact between Areva and L&T will start production of heavy forgings in India. The domestic production of key reactor components will also serve to reduce the cost of reactor construction that has been a sticking point so far between Areva and NPCIL.
Nevertheless, it should be noted that Areva has faced huge delays in constructing reactors in Finland (construction began in 2005 and is yet to be completed) and along with EDF, continues to face issues with its construction of two EPR reactors at Hinkley Point in Britain where the final approval for the project has already been postponed three times.
Further, a massive design flaw was discovered during the construction of the EPR in Flamaville, France, which means that the entire reactor pressure vessel will have to be redesigned from scratch. The plant was already running five years late and costs have tripled to €9 billion from the original estimates of €3 billion. 23 It now appears that anomalies exist in the mechanical toughness of the reactor vessel with higher than acceptable carbon content in the steel. It is understood that the maximum allowable carbon content of steel in the pressure vessel is 0.22 percent, but tests have shown 0.30 percent in parts of the Flamanville vessel. 24 Any weakness in the reactor pressure vessel could result in cracking and shorten the reactor’s operational lifespan.
Given such problems with design, construction and financing, it is difficult to expect any more than two EPRs constructed by 2030 at Jaitapur. Should this be achieved, the construction of the reactor at Jaitapur will proceed, with two additional plants to be added each decade by 2040 and then by 2050.
Six plants operational by 2050 would give India a total capacity of 9.9 GW by 2050.
Fast Breeder Reactor (FBR): India’s FBR plans are hinged on the success of its prototype fast breeder reactor (PFBR) of 500 MW being constructed at Kalpakkam in Tamil Nadu. The PFBR has been under construction since 2004 and will use Mixed Oxide (MOX) fuel, a mixture of both plutonium and uranium. It is expected to go critical by the end of 2016 with full commercialisation expected in 2017. The idea is to produce more fuel from the reactor, which can be used for new reactors constructed in the future as well as produce fissile U-233 using a thorium blanket in the FBR, which will be used to fuel the third-stage of India’s nuclear programme, i.e., the indigenously designed thorium reactors. The doubling time of the 500-MW FBRs, i.e., the time required to produce double the amount of fuel that is put in, is estimated at around 15 years. 25
The lengthy time required to construct the current PFBR, along with the safety requirements, mean that plans to construct two 470-MW units will progress slowly. Current plans for future FBRs are still at the design stage. If the PFBR is successfully operationalised, the country will have two additional FBRs of 470 MW in operation by 2030, with a capacity of 1.4 GW. Another pair of units could come online by 2040 as the PFBR would be reaching the end of its first doubling period, giving four FBRs of 470 MW and 1 PFBR of 500 MW in operation.
Between 2040 and 2050, more FBRs would be required as India’s thorium reactors would begin operation and it can be assumed that the four FBRs would be doubled to eight. Such a rate of growth would give eight FBRs and one PFBR by 2050, a total capacity of 4.3 GW.
Advanced Heavy Water Reactors (AHWR): The large-scale deployment of AHWRs fuelled by thorium has long been a dream of the Indian atomic energy establishment. Given India’s vast resources of thorium, a successful development of AHWR technology could significantly alter the potential of civil nuclear power in India. The thorium fuel cycle operates by using thorium 232 (an isotope of thorium) as the fertile material in the reactor. Thorium 232 is not fissile itself but upon absorption of a neutron undergoes a radioactive decay process that eventually yields uranium 233 (U 233), which is fissile. Recently, Minister of State in the Prime Minister’s Office Jitendra Singh told the Lok Sabha that India’s AHWR technology will be functional by the 2020s. 26 However, according to Dr R K Sinha, Chairman of the Atomic Energy Commission (AEC), large-scale deployment of thorium reactors is only expected by the 2040s, considering the need to obtain sufficient fissile material. 27
It is necessary to obtain sufficient fissile material as the deployment of AHWRs depends on the successful large-scale construction of FBRs detailed above. This is for producing the fuel (Uranium-233) required for AHWRs as only burning thorium in-situ will not generate sufficient fertile material to achieve criticality. The 15-year doubling time of FBRs indicates that India will struggle to have more than four 300-MW AHWRs operational by 2050, providing a capacity of just over 1 GW.
Another option is the AHWR 300-LEU variant that could theoretically be deployed faster. This design bypasses the need for production of fuel from the second stage FBRs by using thorium in conjunction with LEU to attain criticality. Thorium is also burnt in-situ to generate U 233, ensuring that the reactor achieves a high burn-up. 28 Furthermore, in comparison with modern LWRs, the AHWR 300-LEU variant requires about 13 percent less mined natural uranium for producing the same quantity of energy, thus optimising use of natural uranium resources which is highly critical for a country like India. 29 However, it must be noted that the AHWR 300-LEU variant also remains at the design stage and estimates of its installed capacity by 2050 reflects the considerable work needed to operationalise such a design. Assuming four AHWR 300-LEU reactors in 2050 as well would mean just over 1 GW of total capacity.
Thus, the AHWRs can be expected to provide up to 2.4 GW in 2050 in total.
Additional PWRs: Prime Minister Modi’s trip to the US in June this year cleared the way for Westinghouse to build nuclear reactors in India. NPCIL and Westinghouse signed a deal to set up six AP 1000 nuclear reactors in India. The AP 1000 is Westinghouse’s flagship new-generation PWR with a net electrical output of 1.1 GW. The project site has been shifted to Kovvada, Andhra Pradesh, after the original site selected in Gujarat met with protests and faced delays. Contractual agreements between NPCIL and Westinghouse are likely to be finalised by 2017 while engineering and site design work will begin immediately. An inter-agency committee has been set up to work out the financing structure for the reactors with the US-based Exim Bank providing the capital for the project.
The deal has gone through because of a number of significant steps India has taken in the past couple of years to address the issue of nuclear liability. It has ratified the Convention on Supplementary Compensation for Nuclear Damage and set up an insurance pool of Rs 1,500 crore ($225 million) for liability risks that may arise from the construction and operation of nuclear power plants in the country. It is uncertain, however, if this amount will effectively assuage supplier concerns. Just as an example, after the Bhopal gas tragedy of 1984, the Indian government claimed $3.3 billion in damages. The proposed insurance pool is measly in comparison.
Also, as in the case of the EPRs, the reactor pressure vessel will be an issue as Westinghouse and GE usually import it from Japan, a country with which India does not have a civil nuclear cooperation agreement. India and Japan continue to negotiate a full civil nuclear deal and the latest indications suggest it may happen by the end of 2016 or early 2017. 30
Given the challenges, it is difficult to expect several AP 1000s to be online soon in India. Two reactors by 2030 would give a capacity of 2.2 GW. By 2050, all proposed six reactors would have been built, giving India a total capacity of 6.6 GW.
A summary of reactor types discussed and their growth projections is shown in Table 1.
Table 1: Summary of Reactor Types and projections for 2050
|Reactor type||Current capacity (GW)||Current construction||Estimated capacity by 2030 (GW)|
Estimated capacity by 2050 (GW)
As can be seen, the total capacity as per projection 1 comes to 52 GW, which would be nearly a tenfold increase on current levels. However, the share of nuclear energy in India’s total electricity mix would still be low. For example, if India’s total installed electrical capacity including all sources rises to over 1000 GW as per estimates of the World Energy Outlook, 31 nuclear energy, at 52 GW, would still be less than five percent of the total.
Factors influencing nuclear power growth
In terms of land area, in line with past practice, the NPCIL intends to develop Nuclear Energy Parks, each with a capacity for up to eight new-generation reactors of 1 GW, six reactors of 1.6 GW or simply 10 GW at a single location. Five such parks have been planned in Kudankulam in Tamil Nadu, Jaitapur in Maharashtra, Haripur in West Bengal, Kovvada in Andhra Pradesh, and Mithi Virdi in Gujarat and by 2050, 40-50 GW could be provided by these. 32 The last of those parks faced protests and challenges, leading to a shift in the location of the Westinghouse AP 1000 to Andhra Pradesh.
Nuclear power projects require significant areas of land due to the additional requirement of a 1.5-km exclusion zone around the plant in India. According to the Atomic Energy Regulatory Board (AERB) code, an area in the radius of 1.5 km, called exclusion zone, around the reactors is established where no human habitation is permitted. This area forms the part of the project and included in the land acquired. 33
There has been significant opposition and local protests to the government plans of land acquisition to develop these nuclear energy parks, potentially delaying their development and forcing the NPCIL to search for alternative locations. Land acquisition itself is widely debated in India and the BJP government is attempting to pass its Land Acquisition Bill in Parliament. The bill provides certain exemptions for five categories of projects from having to go through the process of getting consent of 80 percent of land owners when land is acquired for private projects, and the consent of 70 percent of land owners is obtained when land is acquired for public-private partnership projects. These changes were originally introduced in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. However, consent of landowners is not required for government projects. 34
These five exempted categories are: defence; rural infrastructure; affordable housing; industrial corridors (set up by the government/government undertakings up to 1 km on either side of the road/railway); and Infrastructure projects. The bill also allows the government to exempt these five categories of projects from: (i) the requirement of a social impact assessment (a measure introduced in the 2013 Act) and (ii) the limits that apply for acquisition of irrigated multi-cropped land, through issuing a notification. Before issuing this notification, the government must ensure that the extent of land being acquired is in keeping with the minimum land required for such a project. 35 Nuclear power plants would be categorised as infrastructure projects and therefore be exempted.
The government’s lack of majority in the Rajya Sabha and a powerful campaign led by the opposition against the bill has led to its stalling in the Upper House of Parliament. The bill, which was promulgated thrice by the government, was allowed to lapse on 31 August 2015. The opposition welcomed this as a victory for the farmers. In May 2016, it was reported that the government would try to get the opposition on board to pass 45 pending bills in the Rajya Sabha and the Land Acquisition bill, with the inclusion of various benefits for farmers to allay the concerns of the opposition. 36
The future of nuclear energy in India is certainly tied to some extent to the outcome of parliamentary debate over the bill. Should it be passed, it will boost NPCIL plans of developing nuclear energy parks that could each supply 10 GW of power.
India operates a closed fuel cycle designed to make maximum use of its limited uranium resources, act as a plutonium guarantor for its strategic programme if need be and to be a key element in its envisioned three-stage nuclear programme. According to Anil Kakodkar, former chair of the AEC, “India considers a closed nuclear fuel cycle of crucial importance for implementation of its three-stage nuclear power programme,” the third stage being the long-term objective of tapping vast energy available in thorium resources in India. Kakodkar confirms that “this is central to India’s vision of energy security and the government is committed to its full realisation through the development and deployment of technologies pertaining to all aspects of a closed nuclear fuel cycle.” 37 Having low reserves of uranium and high reserves of thorium, this strategy of reprocessing and recycling of uranium and plutonium would also lead to optimum resource utilisation.
Any discussion about the scale-up of civil nuclear power in India has to analyse its limited uranium resources and requirements.
India’s uranium reserves were boosted recently by the discovery of the Tummalapalle uranium mine in Andhra Pradesh, which has the potential to be among the largest uranium mines in the world. India has uranium supply agreements with various countries such as Russia, France and Kazakhstan to import the majority of its uranium needs.
India has huge thorium reserves which could potentially power its thorium reactors for hundreds of years to come. This forms the basis of its plans for the third stage, the large-scale deployment of thorium reactors. However, as discussed earlier, thorium technology continues to be a long-term goal rather than an immediate option for the country. There is also the question of safety and security. No country in the world has yet demonstrated a viable and commercial thorium reactor programme.
In terms of uranium required for operational reactors as well as reactors planned for the near future, India looks set to continue importing uranium, with a recent agreement with Australia currently in the process of being ratified by the its parliament. Further, any reactor supplied by foreign vendors come with an assured supply of fuel. Thus, fuel is unlikely to be an inhibiting factor for India’s projected reactors through to 2050.
Reprocessing and enrichment capacity required:
In the Indian context, spent fuel is a crucial resource and not waste for disposal. The closed fuel cycle requires reprocessing of the spent fuel to separate uranium and plutonium for reuse. India’s first reprocessing plant was established in 1964 at Trombay. Currently India has three operating reprocessing plants based on the Plutonium Uranium Redox Extraction (PUREX) technology at Trombay, Tarapur and Kalpakkam. While the Trombay facility reprocesses spent fuel from research reactors, the plants at Tarapur and Kalpakkam process oxide fuels from PHWRs. 39 All reprocessing plants are operated by the Bhabha Atomic Research Centre (BARC).
India has also begun construction of an Integrated Nuclear Recycle Plant that could deliver a three-fold rise in the reprocessing capacity by 2020. This plant at Tarapur will be designed to enable the separation of nuclear waste into two components—one where 99 percent of the radioactivity has dissipated within 300 years and the other where waste will remain radioactive for a longer time. 40
The Indian nuclear establishment reiterates its plans to bolster the reprocessing capacity to match the expanding civilian nuclear programme, in which task it is unlikely to face any major hurdle. Furthermore, new plants are under construction at Kalpakkam to specifically reprocess Fast Breeder Reactor Oxide Fuel to ensure there is no mismatch between reactor and fuel availability. 41 Given that India has more than 40 years of experience in spent fuel reprocessing technology and has successfully operated a closed-fuel cycle to recover uranium and plutonium for reuse in nuclear reactors, fuel reprocessing is unlikely to undermine chances of achieving the growth rates discussed.
On the question of enrichment capability, currently the Indian PHWRs use unenriched uranium. However, there are indications that this could change in future with increasing availability of Slightly Enriched Uranium (SEU) from the international market and successful testing of SEUs in one of the Indian PHWRs. The advantage of using SEU instead of natural uranium is that higher burn-up inside the reactor increases the amount of power generated for the same amount of uranium. The burn-up achieved with natural uranium in the present Indian PHWRs is about 6700-7000 megawatt-days (MWd)/tonne (t) of Uranium oxide whereas with SEU in PHWRs, the burn-up achievable is about three times that. 42 Subsequent to regulatory approval, SEU fuel bundles could be produced from 2018 onwards.
Foreign reactors such as the Russian VVER use LEU fuel supplied by the vendor. Any agreements for foreign reactors to be built in India are almost certainly likely to include a commitment by the vendor for supply of fuel for a majority, if not the entire lifetime, of the reactor.
Along with reprocessing facilities, India has also drawn up plans to increase its capacity for enrichment. 43 Therefore, enrichment capacity is not likely to hinder the chances of India rapidly expanding its civil nuclear power programme until 2050.
Nuclear power plants are simultaneously critical on their requirement of heavy engineering components and forgings while also requiring delicate and precision-engineered equipment for purposes of measurement and safety. The most engineering heavy requirement of nuclear reactors is the reactor pressure vessel.
First- and second-generation nuclear reactors of the 20th century were built mostly through integrated supply chains in the countries in question with little or no input from external suppliers. That is not the case with today’s third-generation nuclear power plants. A whole range of international suppliers contributes to the supply chain of materials. For instance, for very large third-generation reactors greater than 1 GW, production of the reactor pressure vessel requires a forging press of around 14,000-15,000 tonnes, a capacity which currently exists only in Japan, France, China and Russia. 44 Westinghouse sources reactor vessels for its AP 1000s from Japan Steel Works (JSW) and as highlighted earlier, the absence of a civil nuclear agreement with Japan will preclude the construction of AP 1000s in India.
All countries with serious nuclear power programmes have achieved them with a domestic manufacturing base that covered most if not all of the supply chain of materials required for building a nuclear power plant. Scaling up nuclear power is contingent on reliability of the supply chain of components as well as capacity and cost.
If India’s nuclear policy tilts it towards foreign reactors with capacities of more than 1 GW, it will be dependent on external suppliers to a great degree, given the lack of current infrastructure in India for heavy manufacturing of the type required for 14,000-15,000 tonnes forging presses needed to build the reactor pressure vessel. In India, four companies dominate nuclear plant material manufacturing—– L&T, Walchandnagar Industries, state-run Bharat Heavy Electricals Ltd (BHEL) and Godrej Group. Of these, L&T runs India’s largest integrated steel-making and forging facility at Hazira in a joint venture with NPCIL called L&T Special Steel and Heavy Forgings (LTSSHF). 45 L&T has also collaborated with JSW to use ingots up to 200 megatonnes (MT) which, however, falls far short of the maximum 650 MT being used at JSW’s facility in Japan. LTSSHF will, however, allow India to have domestic manufacturing capability for heavy and complex forgings for NPCIL’s proposed 700 MW PHWRs. 46 The facility at Hazira has a 9000 MT forging press and is planning a 17,000 MT one in future. The latter will enable domestic production of the AP 1000 reactor vessel.
Therefore, India’s current manufacturing capability only covers the supply chain for 700 MW PHWRs with foreign reactors inevitably requiring foreign supplier agreements. Engaging with foreign suppliers means dealing with problems of capacity, queued bookings and uncertainty. For instance, suppliers of large single piece, integral pressure vessels are booked up for the next five years 47. Thus, manufacturing and supply chain constraints are going to play an important role in determining India’s nuclear future, depending on policy choices regarding domestic and/or foreign reactors.
To scale up nuclear energy in India, human resource for nuclear engineering is paramount. India currently faces a shortfall in nuclear scientists and engineers. As per a DAE projection exercise done in 2006, it was estimated that to replace retiring personnel and provide manpower for expansion of the programme in the coming decade, it would be necessary to train and recruit about 700 scientists and engineers every year in R&D units and about 650 engineers every year in public sector and industrial units.48
Educational initiatives in nuclear technology must meet the challenge of high requirements of technical know-how and take into account concerns around safety, security and secrecy. India has taken an important step about training in the field of nuclear technology by establishing the Global Centre for Nuclear Energy Partnership (GCNEP). The Centre is under construction but has already initiated off-campus training programmes and workshops. GCNEP will house five schools to conduct research: School of Advanced Nuclear Energy System Studies; School of Nuclear Security Studies; School on Radiological Safety; School of Nuclear Material Characterisation Studies; and School for Studies on Applications of Radioisotopes and Radiation Technologies. The Centre will train Indian and international participants, conduct courses in partnership with the IAEA and interested countries, allow Indian and visiting international scientists to undertake research projects, and host international seminars.
While the initial training and capacity-building for the nuclear programme was run by the DAE, five universities in India now offer post-graduate courses in nuclear engineering to go with the Homi Bhabha National Institute, which was set up by the DAE in 2004. India’s increasing demand for manpower in the future will only be met if the DAE supports universities offering nuclear education. The IAEA has initiated web-based nuclear engineering programmes particularly relevant to India, given the lack of teaching faculty. In Asia, the IAEA has set up the Asian Network for Education in Nuclear Technology. It is vital that the DAE successfully leverages such networks to enable capacity-building in nuclear science.
Financing and costs:
Table 2 summarises the approximate costs associated with each reactor type and their deployment in India:
Table 2: Costs of nuclear power construction India
Estimated newly built reactors by 2050
Projected total cost (Rs crore) 50
Cost per MW
Expected LCOE*/tariff per unit of electricity
|RAPS 7 & 8||PHWR||700||Under construction||2||12,320||8.8||–|
|KAPS 3 & 4||PHWR||700||Under construction||2||11,459||8.2||–|
|Kudankulam 1 & 2||VVER||1000||1 already built; 2 under construction||1||17,270||8.7||3.94|
|Kudankulam 3 & 4||VVER-1000||1000||–||2||39,747||20||6.30|
|Jaitapur Power Plant||EPR||1650||–||6||–||12|
|Westinghouse – Andhra Pradesh||AP 1000||1100||6||9|
*Levelised cost of electricity
Table 2 shows that India’s plans for expansion of its civil nuclear programme are likely to fructify only at a substantial cost. Even without accounting for the EPRs, VVER-1200s, FBRs and AHWRs, for which cost estimates are unavailable, India’s nuclear projects are estimated to cost nearly Rs 100,000 crore to construct. Attracting financing is vital for a sustained push to develop India’s nuclear programme.
The proposed tariffs for reactors also indicate the challenges ahead. NPCIL, the nuclear plant operator, will need to keep tariffs down to compete with renewable energy and fossil fuels. Foreign-sourced reactors would sell power that is currently twice as expensive as some solar power projects in the country, increasing the difficulty of scaling up nuclear power.
Imported LWRs will face severe cost and construction headaches given international experience. As noted earlier, the EPR is currently running three times over budget in Finland and the cost stands at €9 billion. A more relevant example for India, however, may be the construction of EPRs in China. China is constructing two EPRs at Taishan in Guangdong province. Construction began in 2009 on two 1,750 MW reactors. They are yet to come online to the grid seven years later. The expected commission date is now 2017. That would mean nine years of construction time. Costs are however much lower than that in Finland. The two EPRs in China are expected to cost $8.7 billion, which is roughly Rs 60,000 crore. That would give a per reactor cost of roughly Rs 30,000 crore and a per MW cost of nearly Rs 17 crore. Therefore, even if India builds EPRs with the same cost of construction as China’s, though there is no guarantee, it will still cost twice as much as domestic PHWRs as per Table 2.
The advantages of PHWRs are lower costs, a chance to further hone and develop indigenous technology, and the use of natural uranium as fuel, thus removing the need for enrichment. However, focusing on domestic buildup will present the challenge of financing. While foreign reactors come with financing options from abroad, domestic reactors need to find their own financing. Currently, NPCIL uses a mix of debt and equity financing to fund indigenous nuclear reactors. The equity requirements are met by NPCIL and domestic budgetary support. But as the country’s nuclear programme expands and matures, relying on domestic budgetary support will become increasingly complicated. While NPCIL has indicated that it has Rs 12,000 crore ready for investment, it is also making efforts to secure additional financing. Interestingly, in January 2016, an amendment to the Atomic Energy Act allowed NPCIL to launch collaborations with other public sector utilities 51. The Atomic Energy Act of 1962 legislated that only the central government, authorities or corporations established by it, or a government company—defined as one in which at least 51 percent of the paid-up share capital is held by the central government—can produce and develop atomic power. The Act was not clear on the licensing of joint ventures. However, the 2016 amendment widened the scope of a government company. According to the new text, a government company means “a company in which:
- not less than 51 percent of the paid-up share capital is held by the central government; or
- the whole of the paid-up share capital is held by one or more of the companies specified in sub-clause (i) and which, by its articles of association, empowers the central government to constitute and reconstitute its Board of Directors.” 52
Owing to the amendment, joint ventures between NPCIL and certain public sector undertakings (PSUs) are now possible. NPCIL is striking deals with three cash-rich PSUs: NTPC Ltd, Indian Oil Corporation and Nalco. These three PSUs have agreed to bring in roughly Rs 10,000 crore each.
However, even after adding this money with the amount available with NPCIL for investment, a total of Rs 42,000 crore will not get India very far. Given the cost per MW of roughly Rs 9 crore for domestic PHWRs according to Table 2, Rs 42,000 crore of investment will only cover less than 5-GW capacity. Costs and financing, therefore, complicate India’s ability to scale up nuclear power through its own means without relying on foreign imports.
The fundamentals underlying the possibility of breakthrough growth in India’s civil nuclear programme are strong: political will, bilateral agreements with most supplier countries, an NSG waiver for nuclear trade, and a non-trivial level of domestic human resources and capability developed in the last 30 years of nuclear power operations.
Indigenous PHWRs have a cost advantage, use natural uranium and offer India the chance to master a type of nuclear reactor technology. No country in the world has built a sizeable fleet of nuclear reactors without a significant buildup using domestic resources and technology. Predictability of construction and delivery is the key to ramping up nuclear power, a fact evidenced by all nations with civil nuclear programmes. To maintain pace of development, it is important to build a constant and reliable supply chain of nuclear materials.
If India is able to perfect the building and operation of its 700-MW PHWR technology, it can rapidly scale up construction of those reactors across the country unhindered by international politics, tricky bilateral agreements, unreliability of foreign supply chains and massive costs. However, as highlighted in the section on costs and financing, sufficient domestic capital outside budgetary support is currently available to finance only 4 GW more of domestic PHWR capacity.
Import of expensive and untested (both EPRs and AP 1000s are not in commercial operation anywhere around the world yet) reactors faces challenges. Lack of a bilateral civil nuclear agreement with Japan means that India cannot move forward on the construction of AP 1000s and EPRs, which rely on JSW for the reactor dome.
The challenges with both domestic and foreign reactors mean that India must adopt a two-pronged strategy: It should push for the smaller indigenous reactors, and commit domestic resources and finances to that. This will ensure India becomes an established international player in nuclear power technology and allow it to scale up civil nuclear capacity. Successful demonstration of this technology will allow India to build PHWRs in other countries, earning it valuable capital for further expanding the fleet of PHWRs at home.
Second, while the political will and commitment to nuclear power remains strong, the government has spent most of its diplomatic ammunition in recent months attempting to secure membership in the NSG, an effort that was ultimately unsuccessful. It is crucial to remember that India does not need NSG membership to import nuclear technology 53—that was already cleared through the exemption given in 2008. India’s diplomatic and political capital may be better spent in securing a bilateral civil nuclear deal with Japan, which is the hurdle yet to be crossed for the construction of EPRs and AP 1000s in India.
By creating a mature domestic market for nuclear power with a sizeable installed capacity of both indigenous and foreign reactors, India will become an important player in the global civil nuclear commerce. It can then seek membership of exclusive clubs, with both economic and technological weight backing geopolitical moves, instead of the other way around. Domestic politics and foreign overtures must work in harmony to prevent India’s much vaunted nuclear potential from remaining just that.
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