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Revisiting the Nuclear Deal

It has been three years from the time when the nuclear deal was making headlines every day. A deal important enough to destabilize a government and lead to unprecedented diplomatic activity is now dead as a topic. This is only natural but remember that the deal had permanent repercussions and quite a few of the fallouts could be newsworthy in the future, energy security for instance. It is true that every now and then a pale ghost of the era does manage its entry such as the recent clearance by Australia to supply nuclear fuel to India.

The need and the projections

As of November 2011, India had an installed power capacity of 185GW. However as 35% of the power generated is lost, actual power delivered is much lesser, around 110GW. The peak demand for electricity is expected to grow to 298GW by 2021-22 according to the 17th electric power survey of India report. This calls for a trebling of power capacity in around ten years. At present nuclear power meets 3% of India’s power needs with around 3.7GW capacity. NPCIL has called for a target of getting 60GW of nuclear power online by 2032. There has also been a revision of the earlier target of 20GW by 2020. Now NPCIL projects 22GW nuclear power by 2015. In fact Atomic Energy Commission has speculated on figures as large as 600-700GW by 2050 providing half of all electricity. First of all, I am amazed that these guys have the ability to project 40-50 years in the future. No doubt there are some Nostradamuses in the AEC. They are also intelligent enough to give enough time to the government to think of a few gigawatt excuses when these targets, inevitably, will not be delivered. However, even in the best case scenario, nuclear power would still be a small percentage of India’s energy pool in the next ten years.

 A shortage of fuel?

Our reactors have sharply decreased their capacity utilization over the past few years due to fuel constraints. This solution to this problem was one of the hallmarks of the deal.
Total uranium usage in 2006 was 478 tons. India’s domestic uranium reserves at around 80000-112000 tons could last us for several decades. I am not even talking about our vast thorium deposits athtw e are yet to utilize. Yet we have fuel constraints: why? I quote from Ashley J Tellis’ book ‘Atoms for War? U.S.-Indian Civilian Nuclear Cooperation and India’s Nuclear Arsenal’,  ”The present insufficiency of uranium fuel arises not so much from a lack of natural uranium reserves as it does from bottlenecks in mining and milling capacity.”

If breeder technology is used and it shall be used at some stage, perhaps very soon, spent fuel could be reprocessed for plutonium increasing the longevity of our reserves still further.Unfortunately no one has thought of the ramifications of depending on power derived completely from foreign sources. A sanction could cripple us anytime.  This is the same story as coal. We do not mine our own reserves but prefer to buy at high rates from abroad.

The nuclear deal aimed at giving us access to the Nuclear Suppliers Group (NSG) in terms of fuel and technology.  This objective has been realized partially with cooperation from quite a few countries(France, South Korea, Australia, Namibia, Kazakhstan etc.) So should Dr. Manmohan pat himself on the back?

 Too little Too Late

 He can but only a light pat. The odds are that nuclear power is hardly going to make a dent in India’s power requirements in the near future. The predictions of the distant future are so fantastic that they remind one of the more optimistic stories of HG Wells (I was also reminded of stock market analysts who predicted FY12 1350EPS, keep it up boys!). The government organizations are revising their targets steeply upwards as if it is going to create actual capacity. Their predictions and targets differ by tens of GW. Government estimates are usually hopelessly overoptimistic (remember the budget expectation of 9%FY12 growth?) it is likely that the 2015 or 2020 targets will actually be achieved several years later. Even going by their aggressive targets, nuclear power is not going to solve India’s energy problem; it is much more prudent to worry about our coal supply situation.

 A Grudging Acceptance

The US has clearly not cooperated to the extent expected. Ever since Bush left, they have begun dragging their feet on various issues. The primary deal has a clause that calls off the deal as soon as India performs a nuclear test, they have imposed CTBT on us from the back door. These guys are smart; once they can make India significantly dependent on nuclear fuel they know that India would be willing to do anything to prevent a disruption of supplies.It does not matter that the cancelling of the 123 agreement will not, prima facie, lead to cancellation of supply from other countries; US pressure will automatically ensure that. Further, restrictions and ‘safeguards’ on our nuclear facilities will remain in place permanently, deal or no deal.

Russia has always cooperated with India on nuclear power and irrespective of the deal we would have had cooperation from Russia. What would not have been possible without the deal was acceptance by the NSG of India’s status as a nuclear power.

This argument is weak and not just because of the NSG nations could not have permanently ignored the great loss of potential revenue because of their blacklisting of India. It is weak because even the hypocrites of the NSG would have been able to see that India could not be bracketed with North Korea, Iran and Pakistan. The US and Russia have enough nuclear weapons to destroy the earth many times over and have all sorts of weapon systems to deploy these weapons virtually anywhere. China has been responsible for the proliferation of nuclear weapons to Pakistan and North Korea. The other nuclear power states, if not anything else, have conducted scores of nuclear tests. Yet these countries always assume the upper hand and have us groveling at their feet whenever the word ‘nuclear’ is mentioned. Our behaviour is like that of the dark complexioned girls in the ‘Fair and Lovely’ ads. We feel permanently inferior have to be somehow endorsed by the fair.

Policy based on farsightedness?

There can be another stream of though here though. India could be smart enough to try to exploit the uranium reserves of other nations as its own are finite. Expecting such far sightedness from Delhi may be asking for too much but you never know. As it is, this is a positive from the deal.  In several decades, we should be able to get the necessary approvals and fulfill the procedures necessary to exploit our own reserves. Till then, let us drink our Indian cocktail of imported coal, crude and uranium. Long live our trade deficit. Hic!

P.S: There is no denying that our nuclear power sector will benefit from the deal in the long run. It is probable that India could not have been able to negotiate a better deal. It is just that the deal was shown so much as an achievement that I thought a little perspective is required. I could not take all that nonsense about ‘India being a nuclear pariah’ any longer.


Atoms for War? By Ashley J Tellis, 2006  http://www.carnegieendowment.org/files/atomsforwarfinal4.pdf