Andhra Pradesh, Areva, climate change, GE, General Electric, India, Kovvada, Kudankulam, Larsen & Toubro, Narendra Modi, nuclear, nuclear energy, Rosatom, Russia, Vodo-Vodyanoi Energetichesky Reaktor, VVER, Westinghouse
Narendra Modi’s visit to Russia yielded 16 agreements ranging from defence, energy, space cooperation, manufacturing, and education. Of particular interest to some has been the announcement regarding the purchase of Russian nuclear reactors for Kudankulam as well as a yet-to-be-decided site. Modi swept into office promising electrification and ample energy for all; his visit to the Bhabha Atomic Research Centre in July 2014, just two months after taking office, his party’s manifesto promise of aggressively pursuing thorium reactor technology and deployment, and his discussions with US president Barack Obama in January 2015 that led to a convoluted arrangement that partially resolved apprehensions about India’s nuclear nuclear liability law all indicated that the prime minister would actually deliver on his promises.
However, little moved on the nuclear front over the past 18 months; in fact, it would not be amiss to say that things actually slid back a little with the chief executive officer of General Electric, Jeffrey Immelt, announcing that he would not risk exposing his company to India’s nuclear liability law and that GE would not be in the Indian nuclear business. Even the much hyped nuclear understanding with Japan has not yet turned out to mean much, and the prime minister made no mention of nuclear power at the international climate change conference in Paris a couple of weeks ago. Nuclear developments from the Russia trip, then, were a much welcome bit of news. As is typical of the Indian government, the announcement was just a stub, even in the official press releases, and not much has been spelled out about India’s new Russian purchase.
In his statement, the prime minister announced that India was keen to acquire twelve Russian reactors for two sites. The first of these sites is Kudankulam, where one Russian 1,000 MW VVER is already operating (though on suspiciously long maintenance downtime) and another is about to achieve criticality in a few weeks. This site was originally finalised in 1989 for two reactors with the option of expanding to eight units. However, the collapse of the Soviet Union, an Indian economic downturn, and anti-nuclear protests delayed work and the first reactor went online only last year in 2014. Confirming six reactors at Kudankulam does not utilise the 1989 understanding to its maximum but it is nonetheless a significant departure for Indian nuclear policy, and one for the better: for reasons unknown to outsiders, it has been the practice of the Department of Atomic Energy to sanction two reactors at a time. Reactors in India have always been built in pairs at each site – Narora, Kaiga, Kakrapar, Tarapur, Madras, and Rawatbhata. This may seem like an insignificant deviation but as the United Arab Emirates’ recent experience has shown, building more reactors of the same type simultaneously improves the efficiency of construction. This is further supported by industry analyses of why the construction of the EPR at Olkiluoto went completely off the rail.
The second site for six more of Russia’s reactors, it is being reported, is in Andhra Pradesh though the exact spot is yet to be determined. These are thought to be the slightly larger VVERs, rated at 1,200 MW. Interestingly, Andhra is already in line to receive six of GE’s 1,520 MW Economic Simplified Boiling Water Reactor (ESBWR) reactors at Kovvada. Does the prime minister’s announcement mean that Kovvada has now been handed over to the Russians, especially in light of Immelt’s outburst in September 2015? If this is not the case, Andhra Pradesh will be home to twelve reactors. Hyderabad’s interest in procuring Russian reactors is no secret. Earlier this year, in June, when West Bengal balked at having two Russian VVERs at Haripur, chief minister Chandrababu Naidu offered his state as a potential home for the displaced reactor plans. This marks a sharp departure from the state’s earlier decision to rely on oil & gas to meet its energy needs.
Modi’s Russian nuclear package also comes with a ‘Make in India’ bonus: Rosatom, the Russian nuclear reactor manufacturer, will be sourcing more components from Indian vendors. The joint statement read, “India and Russia will expand their cooperation in science and technology, industry, localization of equipment and spares, uranium mining, fabrication and supply of nuclear fuel, management of spent fuel and in other aspects of the nuclear fuel cycle.” It is not clear if this entails technology transfers as the deal with Areva at Jaitapur has meant for Larsen & Toubro: the French concern has agreed to help L&T upgrade its forging capacity to produce components suitable for the EPR. Rosatom may well ask Indian companies to assemble knocked-down kits as Russian defence contractors have done in the past with Indian industry.
From a governmental perspective, the most positive aspect of this deal is that it will go through. India’s nuclear liability law, enacted in 2010, delayed or scuttled many other promising ventures such as the ones at Mithi Virdhi and Kovvada; Jaitapur has also had its share of delays to the extent that its environmental clearance license expired last month. Rosatom has been the only international vendor that has stuck with India, though it has worked in a substantial hike in the price of its reactors in a renegotiated contract: while Kudankulam I and II cost the Indian taxpayer approximately Rs. 17,300 crores, Kudankulam III and IV will cost them in the vicinity of Rs. 39,500 crores. Not all of that 130 per cent hike can be explained away by inflation and exchange rate fluctuations. Moreover, there are doubts whether Rosatom will actually pay damages in the extremely unlikely event of a nuclear accident at Kudankulam: although the operator is committed to a no-fault liability, supplier liability can easily get bogged down for decades in courts under a mountain of technical data and legal manoeuvres.
Overall, however, the deal is good for India. Russia’s VVER reactors are among the more advanced Gen III+ designs and will provide clean, cheap, and reliable energy. The real drawback of the outcome in Moscow is that India’s joint vision with Russia on nuclear energy cooperation envisages only 12 reactors over the next 20 years. With the construction of high speed rail networks planned in India, a growing economy, and increasingly affluent citizens, these reactors will be a mere drop in the bucket. As the United States in the 1960s and 1970s, and France in the 1980s and 1990s, demonstrated, achieving a safe construction pace of three to five reactors per year is very much within the realm of possibility. India’s nuclear ambitions ought to mirror China’s building spree and 12 reactors ought to be ready by 2020 at the latest. The real question is, what do we do after that, Mr. Modi?
This post appeared on FirstPost on December 27, 2015.