Tag Archives: Kudankulam

The Final Chapter of the Kudankulam Saga

02 Fri Jun 2017

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On June 01, India and Russia concluded an agreement that would begin work on the fifth and sixth reactors at Kudankulam. The deal was finalised during Prime Minister Narendra Modi’s visit to St Petersburg for the 18th annual bilateral summit between the two nations and ironed out the technicalities to a 1988 Memorandum of Understanding signed by Mikhail Gorbachev and Rajiv Gandhi for the development of nuclear energy in southern Tamil Nadu. Completion of this project would make Kudankulam India’s largest nuclear park, responsible for 40 percent of India’s total nuclear energy capacity.

Although the original MoU envisioned a total of eight reactors at the Indian site, a subsequent negotiation in 2008 reduced that number to six. No size of the reactor had been mentioned in the agreement but was mutually understood to be the 1,000 MW VVER-1000. In 2014, Russia offered its latest Gen 3+ VVER-1200 for future Kudankulam installations but this suggestion was nixed by India as there were no working models of the design; the first VVER-1200 reactor became commercial just three months ago at Novovoronezh.

The deal for the last two reactors at Kudankulam comes at an interesting time in international nuclear politics. Rosatom has been strongly pushing nuclear exports over the past five years and secured agreements in several countries such as Hungary, Bolivia, Argentina, Indonesia, Turkey, Egypt, Nigeria, Algeria, Bulgaria, Finland, and others. As the only company in the nuclear sector that is capable of offering the full spectrum of services from mining to reprocessing, Rosatom has a powerful advantage over its competitors in new markets. However, nuclear sales come with financing agreements and it has been questioned if the Russian state-owned company can indeed afford to float such lines of credit. In fact, Rosatom had offered to partner with India in fulfilling its agreements for probably similar concerns. This deal confirms valuable additional business for the Russian nuclear giant when it needs it most, especially considering the short period of 10 years for the $4.2 billion loan Russia has extended India for Units V and VI.

The finalisation of Kudankulam V and VI also comes on the heels of India’s decision to proceed with 10 indigenous 700 MW reactors if foreign suppliers cannot be relied upon to assist with India’s nuclear aspirations. If Delhi does succeed in streamlining the indigenous route, a valuable customer with enormous needs would be lost to the international market. Despite its frustrating vacillations, India still remains one of the hopes of a nuclear renaissance.

It is also hoped in some quarters that indigenous nuclear development will give India additional leverage to force its way into the Nuclear Suppliers Group. The emergence of a parallel market in which Delhi can set its own rules while broadly following international non-proliferation and safety protocols is a threat to the Western-led international nuclear regime. Although this is no more than a fantasy, it is hoped that taking even small steps towards such reliance will soften the stand of the nuclear cabal. Given the new mantra of Make-in-India and Modi’s emphasis on developing Indian industry, it is not inconceivable that a few benefits are also seen in domestic Indian nuclear industry.

There is no clear information yet as to what the cost of Kudankulam V and VI will be. The first two units were built for ₹17,270 crores but the price for the third and fourth units skyrocketed to ₹39,747 crores. The agreement for the fifth and sixth units commits Russia to a loan of approximately ₹27,000 crores to cover the construction costs of the reactors but reports make no mention of what the total cost is likely to be. If the agreement on Kudankulam III and IV – in which India secured a $3.4 billion loan towards construction costs – is any indicator, the last two VVER units at the site are likely to cost around ₹51,000 crores.

As usual, India’s Nuclear Power Corporation (NPCIL) will construct the plant with guidance from Russia’s Atomstroyexport. No information has been released on the timeframe for Kudankulam V and VI to begin commercial operation, or for that matter, the earlier two units.

The agreement for the fifth and sixth units follows quickly on the heals of the agreement for Kudankulam III and IV. The infusion of two more foreign reactors will not salvage India’s moribund nuclear energy programme but it comes at a time when more and more people are asking questions about India’s relations with Russia. While Delhi is perceived to have drifted towards the United States, Moscow flirts with Islamabad to India’s chagrin. Despite all the diplomatic packing peanuts, defence (technology) agreements have formed the bedrock of India-Russia relations ever since Stalin and the new Kudankulam will give flagging relations a shot in the arm. As long as cooperationin the strategic realm remains strong, both Moscow and Delhi will be able to weather any storms since their relations are not based on a sense of community or shared international vision.

It also seems clear now that Russia will be exempted, de facto, from India’s asinine nuclear liability regime. The argument for the exemption is that laws cannot be applied retroactively – though such common sense has not always prevailed in India – and the Kudankulam agreement and the subsequent renegotiation were both concluded before the Civil Liability for Nuclear Damage Act. As analysts have pointed out, By reopening the Kudankulam deal to accommodate the CLNDA would provoke Russia into demanding renegotiation of reprocessing rights, the implementation of full scope safeguards, and showing a greater restraint in nuclear cooperation or technology transfer. Russia has already substantially raised the price of its reactors to allow for India’s convoluted workaround of its liability law.

Russia remains the only country that has committed to developing nuclear power plants in India despite the CLNDA albeit no new agreement has been concluded and the reactors presently under construction are still grandfathered into the 1988 accord. India’s early optimism in face of international concern for its liability law now seems hollow and self-deceptive. A good experience with Kudankulam is therefore important to retain India’s only foreign nuclear vendor.

This post appeared on FirstPost on June 02, 2017.

From Russia, With Love

26 Sat Dec 2015

Posted by in India, Nuclear, South Asia

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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.

Aspects of India’s Nuclear Renaissance

22 Fri Aug 2014

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India’s prime minister Narendra Modi is famous for his commitment to solar power. In the past month, however, Modi has praised nuclear energy and declared that it will form a vital part of India’s energy mix. In July 2014, the prime minister visited the Bhabha Atomic Research Centre, praising the country’s scientists and challenging them to strive for even greater achievements. Within ten days of Modi’s BARC visit, it was announced that India would be setting up 22 nuclear power projects with Russian assistance. In addition to the six nuclear reactors planned for Chhaya Mithi Virdhi from Westinghouse, another six reactors for Kovvada from General Electric, and six more from Areva for Jaitapur, India is in talks to import 40 reactors – almost 200% of its present number and over 700% of its installed nuclear capacity.

However, it must be remembered that the time for celebration in India is post delivery, not post announcement; bureaucracy can frustratingly distort timelines and projections. There is reason for nuclear power enthusiasts to be cautiously elated with the development but beyond India’s labyrinthine bureaucracy, there are some issues arising from India’s massive nuclear expansion that require some careful thought.

The first concern is that the 40 reactors India is looking at are all light water reactors (LWRs) with which India has little experience. Barring the original two reactors at Tarapur, India’s nuclear fraternity operates a fleet of pressurised heavy water reactors (PHWRs). After the initial purchase of a 220 MW CANDU reactor from Canada for Rajasthan Atomic Power Station (RAPS) I (a second purchase was interrupted by the post-Pokhran sanctions), Indian scientists modified and improved the technology to produce CANDU-derivatives known as INDU. The two boiling water reactors (BWRs) at Tarapur were purchased to prove to a sceptical Lok Sabha that Indians could indeed operate nuclear power plants safely on their own and the sector receive full support.

Kudankulam is India’s first LWR, and as such, Indian knowledge about operating the reactor is only bookish. To master the technology and be able to come up with improvements and indigenous designs will require time, training, and large transfers of technology. One of the benefits of the tens of billions of dollars of nuclear imports ought to be that India learn to at least replicate if not design the reactors indigenously. Training engineers to operate the LWRs is fairly easy and quick but with 40 more reactors added to the mix, the autonomous Nuclear Power Corporation of India (NPCIL) will be busy with plant management to do additional research and experimentation on LWR designs. As it is, some 90% of NPCIL’s budget goes towards operations and management, leaving only crumbs for research & development and nothing for expansion.

Corporations and governments do not engage in technology transfer without extracting a steep price. However, even if India were able to secure a painless technology transfer from its nuclear vendors, to whom would the transfer be made? Due to the clause in the Indo-US nuclear deal that stipulates the separation of India’s nuclear facilities, only those designated for exclusive civilian use can be the beneficiaries of such transfers. Otherwise, the military facility receiving the transfer will lose its status and come under international safeguards. With BARC disqualified and NPCIL incapable, only the fledgling BHAVINI is left whose main purpose is the development and operation of fast breeder reactors. In effect, there is presently no agency in India capable of conducting in-depth studies of other reactor designs or doing extensive research on new and promising reactor designs such as the molten salt reactor; even India’s thorium reactor programme is proceeding at a snail’s pace.

However, why is India suddenly interested in LWRs? The primary reason India chose HWRs over LWRs and BWRs in the 1950s was that the former did not require the large investment in the development of enrichment technology. Furthermore, the technology to make the heavy water needed for PHWRs was easily available and only had to be mass-produced. A further advantage of HWRs is its ability to achieve criticality at lower concentrations of fissile isotopes than in LWRs. This makes it ideal for the use of thorium or MOX fuel without much redesigning, something India has been interested in for a long time due to the paucity of domestic uranium.

It is puzzling why India has not reached out to Canada to help with its nuclear renaissance. Delhi has a history with Ottawa, albeit complicated, and Indian scientists are familiar with the basic CANDU design. Since 1974, when Canada imposed sanctions on India, Atomic Energy of Canada (AECL) has significantly enhanced its designs to the CANDU-6, the Enhanced Candu 6 (EC6), the Advanced CANDU Reactor (ACR), and others. These reactors retain the advantages of tolerance to multiple kinds of fuel – including thorium – and have better safety mechanisms installed, a perfect fit for India’s nuclear needs.

In the long run, India should think about emerging as a nuclear vendor, from reactors and components to services. This can hardly be done with a research establishment trapped in the civil-military divide; the role of NPCIL and/or Bhavini must be expanded while simultaneously encouraging private players to participate in the nuclear market. This can be hastened only with more training, experience, and research, for which the choice of India’s partners will be important. Contrary to public perception, the United States and Canada were far more forthcoming with Tarapur and RAPS I & II than the Russians are with Kudankulam.

Decades of neglect has brought the Indian nuclear power sector to a point where it is forced to make sub-optimal choices for the near-term. Forty years of sanctions forced indigenous development, which has been a success story with mixed results. However, the country’s power crisis is so acute that like Tarapur in 1962, a few LWRs are needed to provide momentum to a moribund industry. Thankfully, India is a large country with a growing population, medium industrialisation, and a massive power deficit. These disadvantages can work in India’s favour now over the purchase of LWRs – if the government can sustain growth, by 2050, India may well need up to 200 new reactors and 40 or even 80 LWRs with a 40-year lifespan will appear a notable but not subversive trend in Indian nuclear development. However, the government should be aware of the history of India’s nuclear development and the trajectory it has plotted for itself before making any major purchases or decisions.