Tag Archives: AP1000

In Search of a Nuclear Vision

09 Fri Oct 2015

Posted by in India, Nuclear, South Asia

≈ Comments Off on In Search of a Nuclear Vision

Tags

, , , , , , , , , , , , , , , , , , , , , , ,

Few things are as confounding as watching India mismanage its nuclear energy policy. The Indo-US nuclear deal in 2008 raised hopes that the country might be on the verge of a nuclear renaissance but Delhi handled subsequent steps with about as much aplomb as a tapdancing platypus. The latest fallout of this ham-handed approach to nuclear policy has been General Electric’s announcement that it will not participate in the Indian nuclear market until the country’s nuclear liability laws meet international standards.

The Civil Liability for Nuclear Damage Act is but a symptom of a far greater malaise that has plagued Indian nuclear thinking for decades. In the early years after independence, India’s nuclear tsar, Homi Bhabha, had a close relationship with Prime Minister Jawaharlal Nehru. Consequently, he could count on Nehru’s support in his ambitions for India’s nuclear programme. The prime minister himself was also a devotee of high technology for it signalled to him a way in which India might leapfrog several stages of development.

Bhabha used the fact that he had the prime minister’s ear to dream big: he formulated the three-stage programme which would eventually see the country powered by thorium reactors and free from external dependencies. To reach this goal, India would first have to build a fleet of pressurised heavy water reactors and fast breeder reactors that would produce the fuel for the third stage. The chutzpah is astonishing when one considers that India did not even have a single nuclear reactor then.

Post Nehru, Indian leaders have been distant of the nuclear programme. It was difficult, however, to disavow the programme entirely. This was partly because the energy programme was inextricably interwoven with a weapons programme and India’s principled opposition to international nuclear apartheid linked the political fortunes of both to each other. The closeness between Bhabha and Nehru, not to mention the latter’s childlike fascination and wonder at big science, created a dynamic that has not since been replicated.

One thing India’s political class has never been accused of is possessing in-house expertise and this shows in the way Delhi seems lost at sea when it comes to nuclear energy. The drastic adjustment of the growth target for nuclear energy in the country – from 63 GW to 27.5 GW – by 2032 betrays a worrying incompetence in the Indian bureaucracy, or at the very least a complete disconnect between scientists and policy makers. The plan had been to build 16 domestic and 40 foreign reactors but fumbling on nuclear liability, viewed only through a prism of political expediency rather than technical criteria, repelled desperately needed foreign investment in India’s nuclear energy sector. Even if foreign vendors were forthcoming, the cost of their products has also shot up due to the convoluted bypassing of nuclear liability via the suppliers’ insurance pool. In the seven years since the epochal nuclear deal, the only good news the nuclear establishment can boast of is the securing of uranium supplies for the next decade or so.

The nuclear liability quagmire aside, Indian nuclear energy is still in complete disarray. Only six reactors are under construction in the country presently, a 1,000 MW VVER at Kudankulam, two 700 MW pressurised heavy water reactors (PHWR) at Kakrapar, two more similar reactors at Rawatbhata, and the 500 MW prototype fast breeder reactor (FBR) at Kalpakkam. All have seen significant delays in construction – an inter-governmental agreement between India and the Soviet Union was signed in 1988 but construction only began in 2002; Kakrapar and Rawatbhata were approved in 2005 but construction started in 2010, and the PFBR is at least three years behind schedule. These are among the faster projects – the nuclear power project in Gorakhpur was sanctioned in 1984 but finally broke ground only in 2014!

Delays are rampant across the industry. Yet most are due to political or bureaucratic inefficiencies such as trouble with land acquisition, unforeseen hurdles in financing, and at times, protests and litigation. Once the reactors are built, however, the nuclear enclave seems to have done a splendid job in operating and maintaining them – in 2003, Kakrapar was recognised by the CANDU Owners Group of being the best performing PHWR. Similarly, an IAEA team that visited Rawatbhata in 2012 reported that the reactors they inspected were safe and impressive; in 2014, one of the reactors at the same plant set a world record for the longest continuous operation.

Admittedly, some delays do arise due to technical shortcomings. For example, the design and construction of the reactor pressure vessel (RPV) for the PFBR took Larsen & Toubro almost three years more than anticipated; any increase in the power rating of future FBRs will again require a similar timeframe to re-design the RPV. The reason Indian manufacturing lags behind nuclear industry needs, P. Chellapandi – Chairman & Managing Director of Bhavini – explained, is that there is little incentive to pre-empt demand given how small and infrequent it is. India has built some 21 reactors in the 70 years since independence; by contrast, France built 60 reactors in just 20 years from the mid-1970s to the mid-1990s under the Messmer Plan; the United States built 100 reactors before the lull that set in under President Jimmy Carter; the European Union’s nuclear trade association, Foratom, has just called for 100 new reactors by 2050; China has 25 reactors under construction presently, has plans for 43 more, and is sitting on proposals for 136 more by 2030!

In the last couple of years, Areva, Toshiba, and Urenco have all looked for outside investors in their nuclear divisions. India has let the opportunities by without so much as a whimper. While India has secured nuclear fuel for the next decade, uranium prospecting or acquisition of mines abroad – especially when prices are so low – does not seem to have factored high on the Indian agenda.

In terms of technological cooperation too, India is nowhere on the international scene. China is the hot destination for nuclear vendors and startups – the size of Beijing’s orders has persuaded GE to share its AP1000 technology with Chinese firms, and Bill Gates’ TerraPower recently signed a deal with China National Nuclear Corporation to build the first of a new generation of reactors, the travelling wave reactor (TWR), a 1,150 MW liquid sodium-cooled fast reactor that uses depleted uranium as fuel. This type of reactor will generate less waste, be cheaper, and safer. In the meantime, India postponed the start of its PFBR again and the advanced heavy water reactor is nowhere in sight.

Like any large national project, say, for example, the highways or the railways, the utility and efficiency of nuclear power increases with scale. Furthermore, the high upfront cost of nuclear power demands a clear set of short and medium-term goals with a long-term vision. It is, therefore, essential that the government, either in partnership with the private sector or on its own, have a considered and clear-eyed policy for the industry. The urgency to meet deadlines, the impetus to remove roadblocks, must come from the top to galvanise the entire chain. Indian nuclear fingerprints appear nowhere in the various international nuclear ventures, from mining through construction to development.

Prime Minister Narendra Modi has outlined an environmentally friendly trajectory for Indian development that is mindful of climate change, air quality, and other environmental concerns. It is unclear how he intends to meet these goals and grow the economy at eight per cent per annum at the same time without substantial help from nuclear power. Admittedly, plans for nuclear reactors at ten sites were announced in April 2015 but it is unlikely any of this will come to fruition in a timely manner without developing Indian manufacturing and bringing the CLNDA in line with international practices. Thankfully not ubiquitous, the attitude that the world needs India more than vice versa is far too common among Indian bureaucrats, planners, and citizens. They are in for a rude surprise. As former commerce secretary Rahul Khullar succinctly explained in a recent article, this attitude, combined with domestic calculations, narrow ministerial interests, a fundamental lack of understanding of negotiating give and take beset India’s negotiations with the outside world.

Even more helpful would be to rekindle the relationship between the prime minister’s office and the heads of the nuclear community to the same level as that between Bhabha and Nehru – after all, nuclear energy does fall under the PMO and not the Power or New and Renewable Energy ministries. Modi seems to be the point source for visions and thinking big in the ruling party and were senior nuclear scientists to have the prime minister’s ear, it may be just the sort of thing to accelerate growth in Indian nuclear energy. With their domain expertise and confidence of the prime minister’s support, an ambitious yet realistic nuclear expansion programme can be launched. To be clear, there is no Indian century without nuclear power – clean air, carbon emissions control, plentiful energy, employment, economic growth, energy security…in one industry can India find solutions to so many of its needs. We just need a little vision. Desperately.

This post appeared on FirstPost on October 29, 2015.

Questions over Jaitapur

12 Sun Apr 2015

Posted by in Europe, France, India, South Asia

≈ Comments Off on Questions over Jaitapur

Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , ,

In the hullabaloo over the fluctuating fortunes of the Rafale fighter aircraft during Prime Minister Narendra Modi’s visit to France, little attention has been given to the developments in the Jaitapur Nuclear Power Project. Inked in 2010, the project inched forward during the state visit after the French nuclear concern, Areva, signed an agreement with the state-owned Nuclear Power Corporation of India Limited and a memorandum of understanding with Larsen & Toubro related to the construction of the power plants. The JNPP is estimated to cost $18 billion and host six Generation III+ EPR reactors of 1,650 MW each. With a total power generation capacity of 9,900 MW when complete, Jaitapur will trump Japan’s Kashiwazaki-Kariwa (8,200 MW) to become the world’s largest nuclear power plant.

The movement on Jaitapur signals that the logjam on the issue of nuclear liability has been resolved to the satisfaction of foreign nuclear vendors, however wasteful, self-defeating, and unnecessarily convoluted the idea of a nuclear suppliers’ insurance pool may be. The agreements signed between the Indian and the French sides will go towards resolving some of the difficulties in the negotiations so far. Areva has moved forward with a pre-engineering agreement with NPCIL that will allow India to assess and license the EPR reactor as per Indian laws and regulations. The commencement of the licensing procedure in parallel to the negotiations on cost, manufacturing, transfer of technology, and other matters will expedite the project when it comes time for the final agreement to be signed. Areva has also entered into an agreement with L&T to source heavy engineering components such as reactor pressure vessels and steam generators as well as electrical equipment, valves, and pipes. A technical team from Areva recently visited the L&T heavy forging facility at Hazira after which they developed confidence that these components could be manufactured in India. Progress between Areva and L&T will also reduce the lead time once construction starts full swing. Such localisation will not only lower costs but also enhance L&T’s existing capabilities. This is an important development which will give the company an edge in bidding for contracts in the 1,530 MW GE-Hitachi reactor complex planned for Srikakulam and the Westinghouse AP1000 reactors at Mithi Virdi. Furthermore, with the agreement on civil nuclear cooperation between India and Japan stalled, L&T’s expanded skill set will come very handy for the Indian nuclear industry.

Despite several reasons to be pleased with the progress on Jaitapur, one substantial question remain unanswered – that of the EPR reactor itself. Initially called the European Pressurised Reactor but then internationalised to Evolutionary Power Reactor and now finally just the ‘EPR,’ the reactor was jointly designed by Areva (then Framatome), Electricité de France, and Siemens AG. The design is substantially safer than most commercial power reactors that are presently operational in the world – it can withstand seismic disturbances and has the ability to tolerate a direct plane crash. Furthermore, it has 400 per cent redundancy in its safety and cooling systems as well as a core catcher in case of a meltdown. The reactor generates 15 per cent less long-life radioactive waste products and operates on several types of fuel – enriched uranium, mixed oxide fuel, and reprocessed uranium – and does so at a better efficiency than previous generation reactors. This makes the EPR cheaper to operate and maintain. What makes pressurised water reactors like the EPR attractive to India is that the country maintains a small fleet of CANDU reactors which can accommodate spent PWR fuel as its primary fuel in what is known as the DUPIC (Direct Use of PWR fuel In CANDU) fuel cycle with only physical reprocessing and skipping the more expensive chemical processes.

This bag of goodies, however, has a large question mark hanging over it – no one has managed to successfully construct and operate an EPR reactor yet. In fact, the tales of delay from construction sites around the world where EPRs are being erected – Olkiluoto, Flamanville, and Taishan – should deter anyone from choosing the French reactor. The projects in Finland and France are severely behind schedule and in China, Areva is concerned that safety procedures may not have been assiduously followed. One wonders if countries such as France that are synonymous with the success of nuclear power, advanced industrial states like Finland, and manufacturing powerhouses like China are struggling to build an EPR to safety standards, what chance does a novice in nuclear construction and lightweight in industrial manufacturing like India have to build the reactor on time and on specification?

None of the problems with the EPR construction have been due to faulty design. In fact, India can rest easier after the many lessons that have been learned from the other sites. There are none that cannot be overcome and most are fairly simple though with expensive consequences. At Olkiluoto, for example, trouble started with the pouring of concrete for the base slab itself. There were several non-conformities that came to the attention of the safety inspectors and eventually, the concrete batching plant itself had to be redesigned. The reasons for this, an investigation revealed, were manifold. First, there was no “appointed responsible manager at the site unambiguously in charge of the base slab fabrication, with authority to issue orders that are binding to all parties.” Second, the crew at different phases of fabrication did not have a common understanding of nuclear safety. Third, the concrete supplier was not made explicitly aware of the requirements of nuclear-grade concrete at the time of tender invitations. Four, the fabrication staff was not trained in special methods and quality standards required in manufacturing nuclear-grade concrete. Five, the problems observed in concreting operations were not always immediately addressed. Six, there was a communication problem on quality assurance, fabrication of material, and the design of the mix composition. Seven, in quality control, too much trust was placed on the responsible attitude of the parties in the elimination of the detected problems. In the manufacture of the steel container lining, the welds between the various steel plates were found wanting; repairs were conducted using unapproved methods for nuclear construction; segments had to be redesigned and rebuilt; due to lack of communication, the design modifications at one phase were not accounted for in the next phase and modifications had to be made in the next phase as well.

Similar but fewer problems were faced at Flamanville and fewer still at Taishan. This was because of the enormous amount of learning that happened at Olkiluoto. While the project is routinely cited as an example of a disaster in nuclear engineering by the media, safety inspectors and regulators at Areva, EDF, and STUK, the Finnish safety regulator, are actually proud of all that has been learned and how incident discovery and resolution occurred in a highly professional manner. Teollisuuden Voima Oyj, the Finnish nuclear consortium, was made painfully aware that the nuclear industry had lost a lot of talent since the 1970s and 1980s to retirement and stagnation. Thirty years ago, vendors were large and experienced firms that could design and manufacture almost all parts of the nuclear power process in-house. This obviated the need for subcontractors and quality assurance was unified and easier. A moribund industry saw vendors downsize and bleed talent to other sectors. As a result, the recent nuclear renaissance is built on the backs of dozens of subcontractors who are not trained to understand the higher standards demanded by nuclear construction. This makes quality assurance and a collective safety culture difficult to implement and enforce.

The loss of skill has affected nuclear vendors in more ways than just through unqualified subcontractors – mistakes are made in routine tasks even in-house. The work at the Flamanville plant, for example, was recently overhauled for concentrations of carbon above the regulatory limit in the steel of the reactor pressure vessel. While the larger vessel was forged by Japan Steel Works, probably the only forge in the world that can process the ingots required for the EPR, the smaller plates in which flaws have been found were made by Areva itself at its plant in Le Creusot.

Olkiluoto has taught Areva that the earlier the licensee, regulator, and contractor start talking to each other, the better. The project should be mapped out as much as possible before work begins and everyone should know how they fit into the larger picture. This handholding is required especially of new subcontractors who have little experience in nuclear work and do not understand how modifications they might make can have severe consequences downstream. Furthermore, advanced construction and manufacturing techniques are difficult to perform if not regularly practiced. Areva should have ensured that the subcontractors understood the higher degree of workmanship that would be required of them before hiring them for the Oilkiluoto project. When working with such an inexperienced crew, Areva should have also been realistic about the time estimated to complete each stage of the project.

Some of these lessons have already been incorporated. At Taishan, for example, 50 per cent of the management and engineering staff and 90 per cent of the procurement officials from Areva’s side were Olkiluoto and Flamanville veterans. The site has had the least problems or delays as a result. Applying these lessons to Jaitapur will certainly ensure that the project does not run into interminable delays. The cooperation between L&T and Areva is good news but India also suffers from a small pool of relatively inexperienced nuclear contractors. The price for nuclear stagnation world over has been steep and to avoid paying it now would only make it steeper in the future.

The processes for manufacturing, construction, procurement of mechanical components, and quality and safety standards must be set in stone before work commences if India is to avoid another Olkiluoto. In an era where financing costs are higher than material costs, delays could wreck a project’s viability. At a time when India needs to be talking about hundreds of nuclear reactors and not dozens, a misstep like Olkiluoto or even Flamanville could grievously damage the reputation of the fledgling nuclear industry as well as the technology itself. India’s operator, regulator, and contractors must be vigilant, especially since a reactor of this type is yet to be successfully built.

The Economics Of Nuclear Energy

28 Fri Nov 2014

Posted by in India, Nuclear, South Asia

≈ Comments Off on The Economics Of Nuclear Energy

Tags

, , , , , , , , , , , , , , , , , , , , , , , ,

At the recently concluded India Economic Summit, Minister of State with independent charge for Power, Coal and New and Renewable Energy Piyush Goyal asked what the lifecycle cost of nuclear energy was. To nuclear aficionados, this was like asking how much a car costs. As anyone can attest, such a seemingly simple question can start a chain reaction of other queries. Which category? Which brand? Where? With or without bucket seats? Leather interior? Sunroof? Seat warmers?

This is not to put down the minister but to reveal the many variables that go into nuclear costing. In fact, it should be applauded that such questions are finally getting attention from the ministerial class in India. However, there is a reason the minister could not get a straight answer. It was not a straight question.

Nuclear costing is a complex enterprise that is made more difficult by doctrinaire hatred for it in some sections. The most reliable method is to calculate the cost of each nuclear facility individually. This may seem a bit of a chore but given that the number of nuclear sites in India will remain under 50 in the foreseeable future, the task is not so daunting. However, to give a broad picture of what variables affect nuclear lifecycle costs, the life of a nuclear facility can be broken down into four stages: Initial ground work; Construction; Operations and Waste Storage, and Decommissioning.

Initial ground work

This stage entails finding a place suitable for a nuclear power plant. Surveyors sent out to consider different sites consider, among other things, availability of land, topography, who the likely consumers of electricity in the region are, epidemiological data, the distance of the potential nuclear site from its likely consumers, rainfall, wind patterns, water sources, background radiation, and risk of natural disasters like earthquakes, tsunamis, or tornados. Normally, sites under consideration are monitored for two years before the process of land acquisition and construction is even started, but over time, this can be partially reduced as a database of surveyed sites builds up and updates to account for population migration and its impact can be made periodically.

Construction

This is the most complex stage in terms of accounting. Various factors play into the cost at this stage. The first is the cost of the land acquired and the compensation given to affected people. This varies from site to site and even a ballpark figure is difficult to estimate. Nonetheless, land requirements for nuclear power are the least per gigawatt generated.

The crux of it all is what a reactor will cost. This will depend on type of reactor, vendor, and size. For example, a 220 MW Pressurised Heavy Water Reactor from the Nuclear Power Corporation of India is likely to cost much less than Westinghouse’s 1,000 MW AP1000 or Areva’s 1,650 MW EPR. These variations will be even greater if different types of reactors – beyond lightwater – are considered, such as the Indian workhorse, the CANDU, or the Fast Breeder Reactor, the Liquid Fluoride Thorium Reactor, or India’s Advanced Heavy Water Reactor, though these last three are presently still in the research phase. The cost will also be determined by what subsidies the government may have given to encourage investments in nuclear energy. Or conversely, what discounts the vendor may offer to secure greater sales; South Korea and China, for example, are keen on breaking into the reactor export market but have so far enjoyed only limited success.

Another factor is how the reactor will be built. Components built indigenously are usually cheaper, but in this nascent industry, they may turn out to be more expensive. Yet nuclear vendors usually have semi-rigid supply chains which allow some sort of price approximation. However, India is known to insist on certain offsets to acquire new technology as well as reduce costs. These offsets cloud off-the-shelf rates of reactors and its components. India has cheap labour, but this only extends to manual labour. Professional skilled labour costs will remain high as the designs are all conceived in Europe and the United States where labour prices are much higher.

Where a reactor is constructed determines what sort of safety measures will have to be considered. Units close to the coast may have features to mitigate the impact of a tsunami while those further inland may have to guard against a higher Maximum Credible Earthquake rating, flooding, or other risks. This also affects costs.

The most important component of construction costs is the improvements in safety that have been mandated over the past 30 years. It is—as usual—difficult to get Indian data, but French and American experiences can be used as a general model.

Of course, nuclear power is among the most capital-intensive energy sources out there. From the early 1970s to the late 1980s, construction costs of reactors rocketed up over 1000%. Even adjusting for inflation, nuclear construction costs were seven to eight times higher than they used to be 15 years earlier. Philadelphia Electric Company (now a subsidiary of Exelon) constructed its Peach Bottom facility of two reactor units in 1974 for $2.9 billion (in 2007 dollars) but just the first of its two Limerick units, completed in 1986, cost $7.3 billion.

The plant at Dresden, Illinois, was completed in 1970 at $146/kW while the Braidwood plant cost $1,880/kW in 1987—a 13-fold increase in 17 years. The price of electricity in Millstone, Connecticut, rose by a factor of 22 in the 15 years between the commissioning of the first reactor and the third. The Nuclear Energy Agency estimates these costs to have risen even further to $3,850/kW in 2009.

The French experience is identical; the price of nuclear reactors doubled between 1980 and 2000. The French national audit body, Cour des comptes, has estimated the Flamaville EPR to cost around $4,600/kW.

These examples demonstrate that the high price of modern-day nuclear construction cannot be due to incompetence as some suggest unless we allow for our ineptitude to have mysteriously appeared only since the 1970s. Studies show that two things happened in the 1970s to raise the price—the cost of labour went up and it took longer to build nuclear facilities. In the US, cost of labour went up 18.7% from 1976 to 1988; in fact, labour costs went from being less than material costs to being twice as much.

The second reason for the price escalation was that nuclear power plants took longer to build. When construction time increased, money was borrowed by the promoters for a longer tenure and generated more interest to be paid back. In the early 1970s, it took about five years to complete a new build but by the end of the decade, that had more than doubled to average around 12 years. Admittedly, the 1970s were a period of high inflation due to the oil shock and weak economic performance around the world, but in effect, the price of a nuclear power plant tripled over that decade with 69% of the increase being due to inflation and interest payments.

Regulatory ratcheting

What caused the construction delays? The answer may upset some but the primary reason was stricter regulatory standards. According to a study done at Oak Ridge National Laboratory, between the early and late 1970s, regulatory requirements increased the quantity of steel needed in a nuclear power plant by 41%, concrete by 27%, piping by 50%, and electrical cable by 36%. The time taken for prep work went from approximately 16 months in the late 1960s to 54 months by 1980 and actual construction time went from 42 months to 70. The price of a plant quadrupled.

Similarly, labour costs were affected as regulations were sometimes changed in the middle of construction and modifications had to be applied retrospectively. More inspections and tests became required, leaving senior engineers idle as regulators double- and triple-checked every system. In some cases, changes ordered involved altering the basic layout of a subsystem or removing concrete that had already been poured. These were difficult and expensive procedures.

Activists resorted to legal action or protests to delay construction. False experts would write in local newspapers and agitate the community; after all, with so much new regulation, it was easy to  allege impropriety at some stage or another. At times, populist pressure was brought to bear on local mayors or governors who refused to cooperate with the nuclear facility in emergency evacuation drills. Eventually, the Nuclear Regulatory Commission had to change the rules to allow plants to be commissioned without a complete testing of evacuation procedures.

Quality assurance gone wild

This regulatory ratcheting does not mean that nuclear plants necessarily got safer—more piping may added redundancy but also a greater possibility of leaks; more electrical cable meant more back-up but also a greater chance of short circuits. One can always increase the safety of a product but if the cost exceeds the benefit, it defeats the purpose; the product becomes unaffordable.

Much of the regulatory tightening was spurred by fearmongering anti-nuclear activists with little understanding of nuclear engineering. To draw a parallel with the automotive industry, we could make cars safer by making them heavier, adding more shock-absorbent bumpers, airbags, rear window wipers, fog lights, anti-lock brakes, and so on. But this would make cars prohibitively expensive to buy or operate; it would kill the industry.

Having supplier qualifications and requirements for component fabrication that far exceed those applied to any other industry leads to dramatically higher costs. Plus, the number of qualified suppliers is reduced, causing supply bottlenecks, low manufacturing, and a bidding war for components. Instead, if the nuclear industry were to follow a more typical set of quality requirements such as the ISO-9000, many blockages would vanish, increasing manufacturing capacity and introducing healthy competition, in turn lowering the price of labour and material.

Having an extremely rigid and bureaucratic regulatory system also means that even sensible changes are delayed. Due to the difficulty in getting approval, there is reluctance to make modifications and innovation is stifled. Quality assurance must be based on probabilistic risk assessments rather than ill-informed public fear or symbolism. It is vital to understand that over-engineering a nuclear power plant is meaningless if the human factor cannot be resolved. In virtually all nuclear accidents, it was the human factor at fault, not material or systems failure.

Operations

Operational costs are comparatively low for nuclear power plants. The very high energy density of uranium allows it to be transported easily and in quantities smaller than coal by at least an order of magnitude. Greater energy density also means that price fluctuations do not affect the cost of electricity as calamitously as they would for fossil fuels. For example, if the spot price of uranium rose from $25 to $100 per pound in a week, the extra $75 dollars would be spread over a greater amount of energy available in a pound of uranium. However, imagining the same scenario for oil—$75 spread over the energy in one barrel of oil—is the stuff of nightmares and apocalyptic novels.

The potential fluctuations in cost at this stage, like the prep work stage, are minimal and depend on the price of fuel and plant load factor. Due to shortages in fuel and/or moderator, Indian reactors used to run at 35-55% efficiency. With easy availability of fuel since the Indo-US nuclear deal, they have been able to increase capacity to nearly international standards. In fact, Unit V and the Rajasthan Atomic Power Plant set a world record in continuous running at a load factor above 90%. This will vary the cost of operations, but again, not substantially.

Another operating cost is liability insurance. The Civil Liability for Nuclear Damage Act has raised this cost by opening suppliers to prosecution as well as operators, the wisdom of which has been argued elsewhere.

Waste Storage

Spent fuel from the reactor must be stored somewhere for safe disposal. This is usually done on-site until the irradiated fuel rods can be safely transported to a more permanent geologically secure depository. India does not have such a depository yet as it has not burned enough nuclear fuel to warrant the construction of such a facility. Indian nuclear power plants, therefore, store the spent fuel on the premises.

However, the variations in cost in this phase of the nuclear lifecycle come from somewhat unique Indian jugaad solutions to the problem of fuel shortages. Indian reactors have long experimented with mixed oxide and reprocessed fuel to reduce the consumption of natural uranium. The CANDU reactors that comprise most of India’s nuclear fleet are adept at handling different fuels with slight modifications in the fuel assembly. The advantage of using such unconventional fuels is that more energy is extracted from the fuel and there is much less waste to store. Although reprocessing costs are high, it could be offset by reducing the need for enrichment of fresh fuel and producing significantly smaller quantities of waste.

Decommissioning

Decommissioning costs are usually about 12% of the initial capital cost of a nuclear power plant. If a small percentage of the revenue per kilowatt-hour generated were put aside, the plant operator would hardly notice it. In the US, decommissioning cost amounts to less than 5% of the cost of electricity produced. Furthermore, with modern nuclear plants capable of functioning for 60 or even 80 years with the help of a midlife refurbishment, the cost of decommissioning can be collected over a much longer period and would therefore be an even smaller portion of the cost of electricity generated. Though the cost of decommissioning will show little variation, the lifetime of a reactor will determine the rate at which it can be accumulated.

Power economics

With so many variables in play, it is difficult to estimate a comprehensive cost of nuclear power over its entire lifecycle. However, the large upfront capital costs are used to scare politicians from committing to nuclear energy. Yet, a fair analysis would emerge only if these stated costs are compared fairly across several parameters. These include cost per gigawatt generated, cost per capacity factor, cost per lifespan of a facility, and cost per tonne of carbon emission. Despite the high initial costs, nuclear power emerges very favourably. However, if States are still afraid of multi-billion dollar investments in nuclear power, the industry has also developed Small Modular Reactors. If one is willing to sacrifice some economy of scale, these reactors are much smaller and offer flexibility in output and geographic distribution.

The issue raised at the WEF was not about the advantages of nuclear power or its safety and these issues have been ignored in this article. The purpose here was to highlight the numerous variables that influence the final price of nuclear power and to explain the reasons for the spike in prices of some of these factors. The only way to talk sensibly about nuclear costing is to do it individually by facility and not collectively. However, only talking about nuclear costing is not enough: its umpteen boondoggles must be resolved and market efficiency restored if there is to be an Indian nuclear renaissance.

This post first appeared on Swarajya on December 03, 2014.