Nuclear Deal With India

U.S. deal is a bad choice for power generation
Brahma Chellaney
International Herald Tribune

A much-trumpeted deal between the United States and India seeks to employ the lure of assistance with commercial nuclear power to bring many Indian nuclear sites under international inspections. Even as tough negotiations are now under way to implement the deal, few have examined its premise – that the way for India to meet its rapidly expanding energy demands is to import nuclear power reactors.

The deal’s very rationale is fundamentally flawed because generating electricity from imported reactors makes little economic or strategic sense. Such imports will lead to energy insecurity and exorbitant costs.

India should not replicate in the energy sector the major mistake it has pursued on armaments. Now the world’s largest arms importer, India spends billions of dollars a year on weapons imports, some of questionable value, while it neglects to build its own armament-production base. India should not think of compounding that blunder by spending billions more to import overly expensive reactors when it can more profitably invest in the development of its own energy sources.

India should think instead of tapping its vast hydroelectric reserves and exploiting its coal reserves, which are among the largest in the world.

The global share of nuclear-generated electricity has remained constant at roughly 16 percent for a decade. Despite being free of carbon and greenhouse gases, nuclear power faces the continuing global challenge to become commercially competitive with thermal power, even when the costs of antipollution technology for the latter are included.

Studies comparing the costs of producing electricity from new nuclear, coal and natural gas plants have revealed that the baseline cost of new nuclear power remains significantly higher worldwide. In India, study after study has shown nuclear-generated electricity to be costlier than coal-generated electricity. And the price of nuclear-generated electricity in no nation includes the potential costs of spent-fuel disposal.

Still, indigenous nuclear reactors make sense to several nations, for whom nuclear power is part of a push for fuel diversity to help spread out potential long-term risks.

No country, however, has tried to build energy security by importing reactors of a type it has no intent to manufacture nationally and whose fuel requirements will keep it perpetually dependent on foreign suppliers. Yet this is the bizarre path India wishes to embark upon.

If the deal is implemented, it will allow India to import only the proliferation-resistant light-water reactor (LWR), fuelled by low-enriched uranium. LWRs, however, do not fit India’s three-phase nuclear power development program, which seeks to overcome the country’s natural-uranium shortage through a shift to fast-breeder technology. Fast-breeder reactors will employ plutonium (recycled from the spent fuel of existing plants) and thorium, of which India has 31 percent of the world’s reserves.

Yet India now wants to shortsightedly import reactors dependent on foreign fuel and spare parts to be part of what its prime minister farcically calls "a broad-based energy security policy." The government heeds no lesson from India’s bitter experiences over America’s abandonment, a quarter-century ago, of its legally binding commitment to supply fuel and parts to the first Indian nuclear plant, the General Electric-built Tarapur. Key issues relating to Tarapur remain outstanding.

Imported reactors, despite their bad economics, can make energy-security sense only if they are part of a country’s planned transition to autonomous capability. A good example is China, which is aggressively working to become self-sufficient in reactors and fuel despite entering the nuclear power field two decades after India.

As it is, India’s indigenous reactors are unable to supply electricity to consumers at rates offered by the Indian thermal power industry. The differential will become appreciably higher when electricity is produced from imported reactors.

Is it really necessary to showcase the U.S.-India strategic partnership through a deal that commits India to a wrong energy choice? Even with a tenfold increase in India’s nuclear generating capacity, nuclear power would still contribute a tiny share of this country’s total electricity.

The billions of dollars saved from not importing high-priced, uneconomical reactors could be invested domestically to generate many times more electricity from indigenous energy resources.

America can help India better by selling not its dubious nuclear reactors, but its clean-coal and renewable-energy technologies, even as it draws on the deal to end its export controls against New Delhi.

(Brahma Chellaney is professor of strategic studies at the Center for Policy Research in New Delhi.)

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