The unpredictable financial implications of constructing, running, decommissioning plants and handling risks are causing a global rethink on nuclear energy
For a professed proponent of liberalisation and free trade, Prime Minister Manmohan Singh's penchant for a technology that cannot float without subsidies is telling. Nuclear power's unfavourable economics are not lost on Dr. Singh.
Recently, Westinghouse Electric and Nuclear Power Corporation of India Limited (NPCIL) signed a Memorandum of Understanding (MoU) to negotiate the setting up of AP1000 reactors in Gujarat, ending a slump in interest from the Toshiba subsidiary in India's nuclear market. For Toshiba's Westinghouse and other nuclear equipment suppliers, the Civil Nuclear Liability Act's clause on supplier liability was the key hurdle to investing in India. The companies wanted the Indian government to insulate them from the financial fallouts of any potential disaster caused by their technology by spreading that liability among taxpayers. The recent MoU suggests some progress in moving towards this goal.
More obstacles remain, though. Nuclear projects are un-bankable. The government may deploy mental health specialists to deal with the fears of Kudankulam protestors. But those shrinks are unlikely to be able to allay the fears of financiers or nuclear equipment suppliers.
According to nuclear energy expert Peter Bradford, “The most implacable enemy of nuclear power in the past 30 years has been the risk not to public health but to investors' wallets. No nuclear power project has ever bid successfully in a competitive energy market anywhere in the world.” Mr. Bradford was member of the U.S. Nuclear Regulatory Commission and chair of the New York and Maine electricity regulatory commissions. He teaches a course on nuclear power at the Vermont Law School.
Second thoughts
Unpredictable financial implications associated with constructing, running, decommissioning plants and handling nuclear risks are causing a rethink on nuclear energy worldwide. But these developments seem to slip by India without so much as causing a ripple.
Germany and Switzerland have decided to phase out nuclear power, despite their substantial dependence on it. Israel abandoned its year-old civilian nuclear programme after Fukushima. Belgium revived a pre-Fukushima decision to phase out nuclear power, using the Japanese disaster as a reminder. Italy and Kuwait gave up their nuclear debut by abandoning plans for 10 and four plants respectively. Mexico dropped plans for constructing 10 plants. All of Japan's 54 reactors are now closed, and plans for 14 new reactors killed.
The story of nuclear energy's unviability is told not just by the actions of naysayers, but also by the experiences of those — like Egypt, Saudi Arabia, Jordan, Iran, Turkey, Vietnam and South Africa — pursuing nuclear programmes. All of them want the nuclear option, but have no idea how they will finance it.
If the U.S. is Dr. Singh's inspiration, then the so-called nuclear renaissance's trajectory in that country gives even more cause for despair. In 2009, the U.S. declared a nuclear revival with promises of more than 30 new reactors. Today, most of these projects are doomed. Even candidates for federal loan guarantees such as the South Texas project, and the Calvert Cliffs-3 project in Maryland, have been mothballed.
State governments in the U.S. do not seem to share the Federal Government's enthusiasm for nukes. Bills to reverse moratoria on nuclear plants in Minnesota, Kentucky and Wisconsin failed last year. In Missouri, North Carolina and Iowa, legislators defeated bills to charge electricity consumers in advance to finance reactors.
“At the time of Fukushima, only four countries — China, Russia, India and South Korea — were building more than two reactors. In these four nations, citizens pay for the new reactors the government chooses to build through direct subsidies or energy price hikes,” Bradford notes.
Finland was among the few that reiterated its commitment to nuclear power after the Fukushima disaster. The 1,600 MW Olkiluoto nuclear plant uses French company Areva's technology. Areva's modular design was expected to make it faster and cheaper to build. But 11 years later, the project is behind schedule and its $4.2 billion budget is up now by 50 per cent. After Fukushima, Areva admits that the same plant would cost $8 billion. Even Areva's home project, in Flamanville, France, has suffered a $4 billion cost overrun and a four year delay. Indeed, 31 out of 45 reactors that were being constructed globally around 2009 were either delayed or did not have official dates for commissioning, says a report for the German Government by consultant Mycle Schneider.
In India
In Kalpakkam, meanwhile, the Prototype Fast Breeder Reactor was slotted to contribute to the grid in March 2012. In 2005, Baldev Raj, Director of the Indira Gandhi Centre for Atomic Research, Kalpakkam, boasted that the 500 MW unit will be completed in 2010, 18 months before schedule. Till date, there is no sign of this happening. The Kudankulam plant, which is now 23 years old since conception, lost only eight months due to protestors.
In Jaitapur too, the government has more to worry about than local protestors. Areva, the technology supplier, is in trouble. Last year, it announced losses of €1.6 billion, and the sacking of 1,200 workers in Germany. Last June, it decided to suspend production at a Virginia reactor component plant due to declining market prospects. Its expansion plans in France, the United Kingdom, and the U.S. may never materialise. Areva expected to sell 50 nuclear reactors this decade. It has not received a single order since 2007.
Now, with a socialist president at the helm in France, Areva's future looks even more uncertain. French President François Hollande had promised voters a reduction in nuclear dependence from 75 to 50 per cent, and shutdown of an aging reactor in Fessenheim. Whether or not he carries through with these promises, it appears certain that no new plants will be built or planned during his term. Both conservative-led Germany and socialist France will make up the shortfall from the nuclear phase-out, by investing in renewables for electricity and new jobs. In replacing nuclear with renewables, these nations are declaring that despite its carbon dividend, nuclear is too risky — financially, politically and environmentally — to pursue.
(Nityanand Jayaraman is an independent writer and volunteer with the Chennai Solidarity Group for Kudankulam Struggle.)
Keywords: nuclear energy, nuclear safety, nuclear dependence
Nuclear technology is perceived in today's Europe and elsewhere as a technology of
the past! Alternate energy sources are enjoying broader public support. So in spite of the energy supply bottle necks expected from alternate energy sources in the early stages (as rightly mentioned by Mr. Tanvir Salim), technology will get more refined, and yet again necessity will drive innovation.
This development will happen with or without India. It would be a shame if Indian government decided to invest in the technology of the past at the cost of ignoring the technology of the future! I don't quite agree to calling Germany a small nation, especially when it comes to energy requirements.
China, India and Russia are among the largest nation in the world. They cannot follow the example of tiny nations like Belgium and Germany. Israel abandoned its nuclear power because that area is a tinderbox and a potential war with arab nations will invite airstrikes on their nuclear plants. And is the author saying that Saudi Arabia with all its oil money not able to finance a nuclear plant?
It is amply clear that the author has piled on randon stuff for sensationalism.
I agree with Sudhiner Thakur. We have to be pragmatic and not emotional. We badly need energy and that too from all resources conceivable. Every step towards modernization is associated with risks, financial as well as physical and we gladly accept that. Petrol and diesel prices keep shooting up but the traffic jams have not lessened nor has the sale of automobiles slowed down. Then why so much cry against nuclear? We only have to be assured of minimizing the risks and compensating for damages if and when some unfortunate events occur.
Dumping of nuclear waste isn't done in our backyards, hence people naturally prefer to see this as a better, "clean" fuel. All the nuclear waste is being buried deep in African countries and even in our own villages. Many don't know this. Although so many subsidies and compensation packages are given, is the radiation affecting life selectively? No. With the launch of the Kudankulam Project we are looking at the annihilation of the Gulf of Mannar
biodiversity reserve. A study suggests that babies born in the vicinity of these power plants show significant signs of abnormal mutation. We all need electricity, villages and cities alike. At what cost ? Hence the answer simply doesn't stay with opening new reactors without looking at the long term impacts. US and UN report that Indian Solar market is very optimistic. Clean, renewable energy and India is already leading in it. Why aren't there many solar scientists who support solar in a country where solar market is making a mark ?
The author's anti nuclear credentials are well known. It is unfair to compare a country with a huge population such as India with tiny nations such as Italy, France and Gernmany. The reactor in Kalpakkam will go citical by this year end.
As a resident of Kalpakkam i can say with fair amount of confidence that there is no fear of life or livelihood among the locals.
The farmers in Jaitapur have been led to believe that their land was sold at cheap rates. The cunning NGO s are simply using the rate of the land sale as a bait to lure the farmers to protest. They are being led to believe that they can arm twist the government into giving more money for their land. Hope the Maharashtra govt is as strong as the TN in dealing with these NGO elements.
The author his pegged his opinion piece around one single major deterrent -Fukushima disaster. Secondly he counts worthy the reduced emphasis on nuclear energy options by advanced nations. Now one thing one should be asking is, has India a galloping economy done with enough nuclearisation as yet to reduce atomic power in the overall energy production mix? And let us ask another practical question, can India"s strategic interests be adequately satisfied without nuclear weapons which are manufactured in the backyards of the nuclear power plants. Is the writer of this article suggesting that Indians fight with knives and catapults with China and Pakistan in case of war?
I am not able to understand if Peter Bradford,an eminent nuclear expert,
is so convinced about un-economics of nuclear power,why he teaches a
course on nuclear power at the Vermont Law School.Nuclear power is uneconomic but economic enough to teach?
With 63 reactors under construction in China, India, Russia, South
Korea, France, Finland and some other countries, the TALE OF NUCLEAR
RENAISSANCE could not have have been fairer. 435 nuclear power
reactors, many of them in evolved electricity markets, are in
operation. These would not have been operating unless electricity
produced is competitively priced. Some body said the nuclear power
reactors are like ATMs, they keep on minting profits. The issue of
economics of nuclear power has been as old as the nuclear power. They
are expensive to build. Early in production cycle the cost seems to be
not that high and it becomes cheap thereafter. All economist predicted
that Tarapur reactors built in 1960s will be disaster. Forty years
down the lane, it is known that these reactors have produced least
cost electricity in the regions on a 24X7 basis for 40 years, current
tariffs being less than one Rs 1. per kWh.Same is case for other
reactors. They have done well in past, future also same.
Indeed, nuclear power plants can only be built if there are subsidies backing these
up, like other infrastructure projects. The key difference is that issues of waste disposal, decommissioning and liability are not addressed in present nuclear policy anywhere in the world. These tasks are delegated to the government. After Fukushima, the public is unwilling to bear this responsibility. A sound economic decision can only be taken if the hidden variables above are accounted for properly. If that is done, then nuclear power is too expensive, at />least in developed countries. Cynical though it may sound, governments in poorer
countries may assume lower liability claims from lives lost in an accident to mark down the price.
Incidentally, Finland is not bearing the cost overruns of the Olkiluoto project as their contract with Areva stipulates that Finland pay a fixed price. So, that plant is being subsidized by the French taxpayer!
I think it is easy to staunch for nuclear power when plant is build
million miles away and you just use the energy produced to lighten
your every day life. But the question is are you ready to have such a
plant near your place and live rest of your life fearing that their
could be Fukushima like disaster which will not only cripple you for
rest of your life but may your future generation ? Well, I am not
ready. Except monetary you never pay for the cost of materialistic
development and so you never consider plights of people who pay for
it in far devastating manners. If this development is for us, for all
,than make it feel so. Developing a section of society at the cost of
others is not humane.
The shutting down of nuclear reactors in Europe and other places will also lead to the emergence of a market for second hand reactors which can be brought to India and other third world countries. Be that as it may, the real worry is the insistance of the Indian establishment to persue nuclear energy, with Manmohan Singh as its leading light. With the allegations of corruption in allocation of coal blocks still lying on the P.M's doormat, one wonders at his stubborn attitude towards nuclear energy. How much commission will nuclear reactors provide? Are people's safety of no concern at all? Except for the vested interests within the nuclear energy industry, all studies, reports and findings have been extremely critical of this source of energy production. The only reason why the nuclear hawks in India are still aggressive, while the world over these reactors are being dismantelled, is because of the huge commissions dangled before our politicians, bureaucrats and nuclear scientists.
The article only gives the negative sentiment towards nuclear
energy.Countries like Germany,Belgium,and other mentioned may phase out
their nuclear reactors and shift to renewable energy,but in Indian
context we have to look our energy demands and will have to go for
nuclear energy as a necessary evil.
The author presents a biased picture. He fails to provide an alternative to Nuclear Power. In this age we have to pick our own poison. Fortunately, nuclear option provides the lesser evil. We should focus our attention to make it perfect, rather than simply dwelling on the negatives. The last I heard is that Germany and Japan are having serious challenges in meeting regular power supply. Solar and other exotic sources are no match to Nuclear Power. These cosmetic sources can not run the engine of growth.
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