Tag Archives: DAE

The Hurdle to India’s Nuclear Renaissance

05 Wed Apr 2017

Posted by in India, Nuclear, South Asia

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Ambitious and well-intentioned as it may be, the department of atomic energy’s (DAE’s) recent proposal to build 12 nuclear reactors to boost power generation in the country needs to be taken with a pinch of salt. In recent decades, DAE has been long on promises and short on delivery—the proverbial white elephant.

Yet it was not always so. When India’s nuclear establishment got under way in 1944—theoretical research had been going on since the mid-1930s, in European labs as well as in India—Homi Bhabha charted out a road map for the country’s nuclear programme for the rest of the century. In a country with appalling literacy levels, unspeakable poverty and little by way modern infrastructure, nuclear power was a bold gamble. Over the next couple of decades, a pool of talent was created, expertise was developed, and collaboration with advanced states sought. Though progress was not breakneck, it was, nonetheless, impressive. Apsara, which went critical in 1956, was Asia’s first research reactor; India’s first power reactor, Tarapur, came online in 1969.

With the exception of an eight-year gap between 1972 and 1980, DAE has been commissioning a reactor every two or three years. However, the reactors were notorious for having a low plant load factor (PLF)—in other words, they were inefficient. The popular belief is that this is largely due to unreliable supplies of uranium fuel but wear and tear and system malfunctions are as much to blame.

Second, India’s pace of nuclear energy growth is dismally slow. When France and the US decided to embrace nuclear energy in the 1960s and 1970s, the former built approximately 60 reactors within two decades and the latter about 100 in a similar time span. China has, at present, as many reactors under construction as India has built since independence. After the end of India’s ostracism from international nuclear commerce, the government ambitiously announced an increase in India’s nuclear energy generation up to 63 GW by 2032; this was drastically revised downwards to 27.5 GW. Recent statements suggest that the target may have been lowered further.

The inordinate delays from conception to commission have been fatal for the sector. The nuclear project at Gorakhpur, for example, was sanctioned in 1984 but is yet to be built; the power project at Narora took 20 years from 1972-92 to complete; the first two units at Kaiga took 15 years. The fast breeder reactor project is also languishing, while DAE has been promising to begin construction on the advanced heavy water reactor next year since 2003.

Cost overruns have also been ingrained into the Indian nuclear process—the Narora plant was sanctioned for approximately Rs200 crore but ended up costing four times that amount; the first two units at Kakrapar saw a 350% increase in cost from conception to commission. Every Indian reactor has seen similar cost spikes.

Technology assimilation has also been a tough nut for DAE. India’s third commercial nuclear power reactor, the 220 MW pressurized heavy water reactor (PHWR) at Rawatbhata, was built with technology from Canada. Since then, Indian scientists have indigenized the design and scaled it up to 540 MW and 700 MW but haven’t been able to cross the 1,000 MW mark as Canada has long done. Today, India needs larger reactors for economies of scale but DAE is yet to deliver.

To be fair, not all of the blame can be placed at DAE’s door. The international nuclear industry, for example, has been in a depressed state for a while—Westinghouse’s financial woes and Areva’s problems with steel forging were self-inflicted disasters. DAE has also had to navigate around uninspired leaders who just could not see the transformative promise of nuclear power. That has resulted in budgetary restraints, poor policies and little encouragement.

However, the atomic energy establishment does not seem to have offered much resistance to the government’s apathy; ministries normally jostle for increased budgets, influence, limelight, a place in national strategy, or a seat at the table. In some ways, the apathy has suited DAE’s own lackadaisical work habits. And the shrivelled ambitions of its Nuclear Power Corp. of India Ltd, which is responsible for the construction and operation of nuclear power reactors, hasn’t helped matters either.

Notably, the atomic community was also divided over the India-US civil nuclear deal—despite the lack of indigenous achievement in the country. It also went soft on the stringent supplier liability laws introduced in 2010 that were not in keeping with international industry norms and effectively made the Indian nuclear market a no-go zone for both foreign and domestic suppliers. Furthermore, there has been strong opposition from the atomic community to privatization under the bogey of national security—a convenient shield—against calls for transparency.

Responsibility for DAE falls on the prime minister’s shoulders. It is no coincidence that DAE’s brightest years were under Jawaharlal Nehru and the agency has been languishing somewhat ever since. Curing this white elephant is an easy process—without even getting into long-term, sustainable goals such as privatization, clear regulation and transparency, closer scrutiny by the prime minister and an adoption of the sector as he has done with solar power would go a long way in revitalizing a moribund agency.

This post appeared on LiveMint on April 05, 2017.

Raring for a Rare Earths Revolution

01 Thu Sep 2016

Posted by in India, Opinion and Response, South Asia

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Since the birth of the nuclear age, the beach sands of peninsular India have attracted much attention. Every day, the sea washes up on the beaches of Kerala, Tamil Nadu, Andhra Pradesh, and Orissa valuable deposits of minerals that had been carried to the sea from the Ghats by natural erosion through sun, wind, and rain. Soon after independence, the new government brought the sands under national control due to their significance in nuclear technology. Some small exports were allowed but only to secure vital technology or cooperation in the nuclear arena.

In 1998, private companies were invited to enter the beach sand mining sector and six of the seven minerals – garnet, ilmenite, leucoxene, rutile, sillimanite, and zircon – were deregulated. Only monazite remained under the purview of the Department of Atomic Energy due to its uranium and thorium content. Since then, production has increased 80 percent and the export value of beach sand minerals has skyrocketed from Rs 35 crores in 1998 to Rs 4,500 crores in 2015. Yet despite having some 35 percent of the global deposits, India still lags significantly behind other global players such as Australia in production. One benchmark the industry uses is the ratio of extracted ore to proven deposits, known as the production reserve ratio – in India, that number is 0.0018 percent while Australia is substantially ahead at 0.01 percent.

The potential for capacity expansion and value addition in the six deregulated minerals notwithstanding, the miracle story lies in the seventh and as yet controlled atomic mineral, monazite. Although famous for its thorium content, monazite has actually only eight percent of the fissile element; the rest is composed of 0.3 percent uranium, 65 percent rare earth elements, and phosphates. After bastnäsite, the mainstay of Chinese rare earth mines, monazite is the richest source of rare earth elements and the rare earth ore most common in India.

The rare earth elements are 17 in number and as their collective name suggests, found only in very small quantities in the earth’s crust. These elements have magnetic, thermal, and electrical properties that find useful applications in several vital industries such as communications, electronics, transportation, energy, aerospace, and armaments. Some of the applications represent cutting edge technologies that could determine the material evolution of society. For example, more efficient LEDs that have already been designed are yet to leave research laboratories for want of europium and terbium in commercial quantities. Similarly, the non-availability of neodymium and dysprosium have delayed the replacement of gearbox-driven wind turbines by more efficient direct-drive units. The widespread embrace of these technologies would go a long way in meeting not just India’s stated climate change goals but also its infrastructural development goals through efficient lighting. Other applications find place in industries projected to grow exponentially over the next few decades. For example, smartphones have proliferated like wildfire in the last few years and demand is only expected to increase in the coming years; these ubiquitous gadgets, however, rely on neodymium, europium, and cerium for their speakers and screens.

Rare earth elements also find use in some of the technologies that can truly be said to be of the future. For example, Tesla has been experimenting with practical energy storage not only for its cars but also for renewable energy sources and electricity grids. Rare earths are key to some of the concepts and designs the company has developed. Easy access to rare earth may well entice Tesla to come and set up shop in India, bringing with it not just its technology and capital but also a demand for quality labour that dovetails well with the Make-in-India and Skill Development schemes that the Modi government has been trumpeting over the past couple of years.

Indeed, the ambitious may well look beyond the arrival of hi-tech multinationals like Apple and Tesla to Indian shores to the time when India will be able to produce its own Apples and Teslas for the global market. With the world’s attention turning to the environmental costs of 20th century growth, demand for commodities like rechargeable batteries, catalytic converters, fluid-cracking catalysts, hybrid vehicles, and stronger magnets are only expected to grow in the coming years. India can well emerge as a vital hub in the network of futuristic industries and technologies.

There is reason for optimism in the development of India’s rare earths industry: the world market is dominated by China, responsible for almost 98 percent of international exports and Beijing’s restrictive policies have raised concern in Tokyo, Washington, and the capitals of other major industrial powers. Wit everyone looking for other sources of these strategic elements, an Indian foray into the market would not just be welcomed but possibly nurtured by other industrial countries. Given the importance of the elements, India may even be able to import the latest technology for the safe and efficient extraction of rare earths to develop its own industry.

The technological manna, the economic bonanza, and the contribution to labour markets and skill development that would result from private sector participation in monazite processing is undeniable. Yet with uranium and thorium as by-products, there is, however, an unfounded fear of private players handling nuclear materials. First, private firms play an important role globally in the mining and processing of nuclear materials; corporations are even allowed to own and operate nuclear power plants and their record has so far been exemplary. Second, it would be easy for the Atomic Energy Regulatory Board to regularly audit or supervise the processing of monazite until the uranium and thorium are separated. The government can then buy the fissile material from the private sector to fuel its nuclear reactors. With plans to boost nuclear energy to 63 GW by 2030, this would offset the demand for imported uranium.

India stands on the cusp of another mini-revolution – what information technology was to the 1990s, rare earths promise to be for the 2020s. Development of this sector can drastically alter the global market as well as domestic conditions in strategic, economic, as well as social terms. As a major exporter of such an important resource, India stands to gain some political leverage – as China does today – in its dealings with other powers. All that remains is for Delhi to get over its irrational fear – protectionism? – of the private sector in handling radioactive materials.

But not so fast – the greatest obstacle to India’s development is India itself. Any potential for the processing of monazite in India appears to be a stillborn dream, for the government has recently moved to re-nationalise the rare earths industry. The historical record of the industry is pretty clear that government control over rare earths production will stifle growth, curtail exports, and effectively terminate any prospects of industrial, economic, or social development.

The Mines and Minerals (Development and Regulation) Act of 1957 had categorised all beach sand minerals as atomic minerals. This made them prescribed substances under the Atomic Energy Act and off limits to the private sector. In 1998, the government invited the private sector to participate in beach sand mining in an effort to give a fillip to the industry and the industry grew over a hundred-fold in 15 years; in 2007, six of the seven beach sand minerals were removed from the list of prescribed substances in the Atomic Energy Act.

However, the Atomic Minerals Concession Rules of 2016 has moved to put all the minerals back onto the prescribed substances list, thereby effectively removing them from the private sector domain. Furthermore, the AMCR proposes to reserve all beach sand mineral deposits containing over 0.75 percent monazite for public sector companies; any already operating private mine that is found to contain above this concentration of monazite will have its lease terminated. Needless to say, these retrograde and draconian measures will severely damage the private sector role in beach sand mining.

If, on the other hand, the government were to allow the private sector to mine process not just the six non-radioactive minerals but also monazite, and implement policies that would encourage the production to reserve ratio to climb to 0.01 percent, industry estimates forecast almost a million jobs in direct and indirect employment, capital investments of over Rs 54,000 crores, and Rs 7,100 crores as revenue to the government. Against an annual global demand of 125,000 tonnes, India produced just 300 tonnes of rare earth elements between 2009 and 2014. A recent study done by the Council on Energy, Environment, and Water in conjunction with the Department of Science and Technology has also stated that the production of rare earth elements would significantly contribute to the growth of the manufacturing sector. In fact, the rationale for privatisation in 1998 as expressed in a Department of Atomic Energy report was that the growing demand for rare earths in the domestic and international market made the augmentation of rare earth extraction capability of interest to the country. “However,” the report stated, “this is highly capital intensive and it may not be possible for only the PSUs (both Central and State-owned) operating in this field to set up the new plants on their own. It is therefore necessary to allow the private sector to set up such plants within the framework of some broad guidelines.”

Yet time is running out. Given the geopolitical turmoil caused by Chinese assertion of hard power in recent years, major consumers of rare earth elements such as the United States and Japan are looking furiously for other alternatives. These could be either sources or materials. If they succeed, the demand for Indian rare earths would diminish and an economic as well as strategic windfall would have been missed.

China’s restrictive export policies and substantially higher prices for the export market than for domestic consumption work in India’s favour in that the global community would be eager to see it develop as an alternative source of rare earths to China. Presently, India represents barely two percent of international rare earths trade; there is confidence in the private sector that with appropriate policies, this could easily be raised to 25 percent in a decade. Besides employment and the development of the Indian hi-tech industry, a private-sector-led growth of the rare earths industry promises a healthier foreign exchange balance, and less reliance on imported resources.

The oft-heard argument that atomic resources are a security risk in private hands needs to be once and for all debunked: plenty of private firms are engaged world wide in nuclear activities from mining and processing to operating reactors. Furthermore, security has been a convenient blanket for the government under which to hide incompetence – one look at the defence sector or the nuclear energy industry should be enough. Finally, private companies would most likely be willing to bear the paranoia of the bureaucrats and agree to supervision of their monazite processing facilities by the Department of Atomic Energy. There is no reason to curtail private sector involvement in this lucrative field of the future.

The Modi government has been hailed for bringing in economic reforms, though admittedly in a trickle rather than a flood. Its beach sand mining policy, however, stands in stark contrast to the laurels it has won from economic commentators and harkens back to the days of Jawaharlal Nehru, big, bureaucratic, and opaque public sector units, and a socialistic frame of mind. If this government is serious about its Make-in-India programme, its Skill Development scheme, and its overall development agenda, it cannot afford to throttle an up and coming industry that will be the lifeblood of dozens of technological advancements of the coming decades.

A version of this post appeared on The News Minute on September 17, 2016.

Nuclear Power and its Discontents

29 Tue Dec 2015

Posted by in India, Nuclear, South Asia

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With India hoping to follow China in its rapid and mammoth nuclear power expansion, it merits consideration whether such an expensive yet foundational project is feasible. There are many shortcomings of nuclear power, though none of them are what are commonly perceived: though nuclear critics constantly wail from an outdated playbook about radiation, nuclear waste, and accidents, far more realistic problems are financing, regulatory processes, industry-wide deterioration of skills, and transparency. These deficiencies of nuclear power will become a millstone around India’s neck if not addressed soon and adequately. These shortcomings are not merely the responsibility of the industry; in some areas, the government must also play an active and positive role if it genuinely wishes to develop a source of clean, abundant, reliable, and safe energy.

It is true that nuclear power plants are expensive; although nuclear power itself is quite price competitive with other sources of electricity, the economics of nuclear power plants is such that most of the cost of the project – over its entire life – are demanded upfront. The costs of thermal energy are evenly spread over the life of a plant – usually 30 years – whereas the cost of nuclear fuel is a miniscule component of nuclear energy and market price fluctuations hardly affect the cost of electricity unlike with hydrocarbons. Furthermore, nuclear plants are built to last for 60 years, twice the lifespan of thermal power and thrice the duration of solar farms; nuclear regulatory authorities worldwide are looking at the latest nuclear power plant designs and considering extending the potential life of a reactor to a minimum of 80 and a maximum of 100 years. Another factor adding to the cost of nuclear power is that estimates made consider nuclear waste – whether it is stored or reprocessed – and decommissioning. Fossil fuel has so far managed to get off without paying for the massive pollution it causes, in effect subsidising its operations.

This over-engineering raises the initial cost of nuclear power plants. Though the figures periodically released to the Lok Sabha by the Department of Atomic Energy (DAE) indicate that nuclear energy is competitive with other sources of energy over its lifetime, the high initial cost creates a financial burden few are willing to or capable of taking. Investors are usually not so sanguine on projects that have a long gestation period and the return on investment is low. In a more market-oriented world, the nuclear industry must address this issue if it is to win over any critics. One idea the industry has been playing with is making reactors smaller. The sacrifice in economy of scale is hoped to be compensated by creating modular components that can be fabricated faster and the smaller size will make them suitable not just around urban concentrations but even for use in more sparsely populated or rural areas. Some entrepreneurs are even toying with production line manufacturing on nuclear power plants. If it works, the speed of construction should increase drastically as well as the cost come down; together, these improvements will make the cost of financing more attractive to lenders and inspire greater interest in nuclear power.

The government, for its part, can also make financing of nuclear power easier. In China, for example, the China National Nuclear Corporation (CNNC) raised $2.5 billion in May 2015 through an IPO in the Shanghai stock market. Delhi’s reticence to allow any public scrutiny of the nuclear industry – financially, technologically, or administratively – only hampers the nuclear public sector undertaking from realising its full potential. Financial streams from the private sector are also forbidden and it was only a couple of weeks ago that an amendment to the Atomic Energy Act was passed to allow even other PSUs to invest – from a distance – in the nuclear sector! In 2012, there was a proposal to divest some 10 per cent from the Nuclear Power Corporation of India (NPCIL) and list it on the bourses but like many files in the Indian bureaucracy, little has been heard of it since.

A second obstacle the nuclear industry faces is the regulatory authority. In the United States, the complaint of the nuclear industry is that the process for the approval of new reactor designs is laborious, expensive, and sometimes done with criteria that reflects older knowledge than the latest developments in the industry. In India, the hurdles start sooner – in that the Atomic Energy regulatory Board (AERB) is not a body independent of the chain of command of those it regulates. Several members of the DAE have stressed on previous occasions that this administrative quibble does not in any way impinge upon the working of the regulatory authority but in a country like India where command influence and the flouting of laws is not at all uncommon, even the appearance of impropriety is reason to worry. Over decades of governmental misconduct, citizens have lost faith in government institutions and in areas like nuclear energy where the scope for damage is enormous, unflattering reports from the Comptroller and Auditor General (CAG) such as in 2012 are damning.

India is developing a 900 MW Light Water Reactor (LWR) and its Fast Breeder Reactors (FBR) have been close to criticality for at least three years now and awaiting regulatory clearances; the thorium-powered 300 MW Advanced Heavy Water Reactor (AHWR), a technology demonstrator, has been ready to break ground for a few years now. The Russian 1,000 MW VVER at Kudankulam I that shut down for routine maintenance has had its restart delayed, allegedly for thorough regulatory inspections. Each time, the nuclear establishment conveniently hides behind safety inspections – no one can fault the agency for due diligence and yet no one is clear what exactly causes the never-ending delays.

Perhaps the single greatest problem that faces nuclear power is the deterioration of skills in its workforce. This includes not just the engineers in the control room at a plant but the cement mixers, welders, and the dozens of other professions involved from the groundbreaking until the commissioning. Nowhere has this been more apparent than at Olkiluoto, the site in Finland where Areva is building its latest 1,650 MW reactor, the EPR. The crew did not have a proper understanding of nuclear safety, there was poor communication, problems witnessed were not immediately addressed, many of the workers were not trained in nuclear-grade construction, and the chain of command was unclear. According to industry reports, these problems arise from a lack of experience in nuclear construction: Europe had gone through a nuclear lull for 15 years and many of its best engineers and specialists had migrated to other industries since the last reactor was built.

India’s pace of nuclear construction has been lethargic at best, constructing only 20 reactors in the 46 years since its first civilian reactor went critical in 1969. It is only with a large and regular orders that the nuclear industry in India will be able to overcome its umpteen issues and streamline its efforts to reduce construction delays and improve quality. An example of this can be seen in the United Arab Emirates, where the experience of working on multiple reactors simultaneously has enabled efficiencies between construction sites. The Indian seems to have noticed this too, with reports on imminent nuclear agreements with Rosatom and Westinghouse suggesting that six reactors will be built at once rather than the traditional India two-at-a-time. Nonetheless, efficient nuclear builds require a decent tempo and given India’s shortage of power and commitments to clean energy, this ought not be a problem. The era of taking over a decade to construct one reactor, however, must be left behind.

The root of many fears about nuclear energy comes from a lack of transparency in the establishment. Nothing shuts mouths or doors faster on a researcher in India than mentioning the word, ‘nuclear.’ Despite their claims to openness, the DAE remains remarkably opaque to outsiders. From exploration for uranium to reprocessing, the Indian establishment reveals little about its civilian programme under the guise of security. So far, this policy has done a better job at covering incompetence than actually increasing security. Some of the more informative studies of the Indian nuclear programme, as a result, come from foreign think tanks who employ scientists to monitor nuclear developments worldwide. From observations that mean little to the uninitiated, these scholars have painted a picture of the Indian nuclear programme beyond what the Indian government reveals to its own citizens.

Most of this secrecy is unnecessary and only breeds suspicion in the minds of the public. The fantastic tales of malfeasance within India’s nuclear conclave gain weight only because it is difficult to know what to believe. The CAG has upbraided NPCIL on its resistance to greater transparency yet there seems to be little done to ameliorate the situation. This is not entirely within the hands of nuclear scientists and administrators – the laws of the land could well land them in jail if they were to actually embrace a more transparent work ethic. Some have suggested that greater public awareness is required but on this, it is difficult to fault the Indian nuclear establishment – although more can always be done, there has been an impressive array of events at various levels by the various nuclear agencies to reach out to the public and explain the basics of nuclear physics and safety. However, these efforts do not extend to questions on policy, processes, or administration. Wherever the fault lies, the DAE has a Herculean task before it to rectify the perception that it may or may not know what it is doing behind closed doors.

These are the main challenges ailing nuclear energy and those old concerns from the 1950s that make for more scintillating headlines – if the nuclear industry can address these four issues, they would be in a much better position to power the country to a cleaner, cheaper, and more energy-secure future. However, as one nuclear engineer with almost three decades of experience told me, how a society handles the first set of concerns from the six decades ago is usually a good indicator of how they will approach the real challenges today.

This post appeared on FirstPost on December 31, 2015.