Electrical India Paper

Nuclear Power: Expensive and Unsafe M. V. Ramana To be published in Electrical India 2005 Annual Issue The July 18 joint statement by President Bush and Prime Minister Manmohan Singh has led to renewed interest in nuclear power. The general assumption seems to be that nuclear power will be an important component of India’s energy future. The truth, though, is that nuclear energy advocates have long promised much and, in exchange for huge budgets and unstinted government support, delivered little.

Optimistic Projections The importance given to nuclear power is apparent from the fact that the Atomic Energy Commission (AEC) was set up in 1948, barely a few months after independence. A few years later, in 1954 the Department of Atomic Energy (DAE) was formed under the direct charge of the Prime Minister, thereby circumventing many standard procurement and funding procedures. And it has continued to operate without adequate external oversight since then. Ever since its inception, the DAE has made several confident predictions about the future of atomic energy in India. In 1954, the AEC predicted that there would be 8,000 MWe of installed nuclear power by 1980; in 1962, Homi Bhabha, the first head of the DAE, predicted that by 1987 nuclear energy would constitute 20,000 to 25,000 MW of installed electricity generation capacity. His successor as head of the DAE, Vikram Sarabhai, predicted that by 2000 there would be 43,500 MW of nuclear power. Reality

was quite different. Installed nuclear capacity in 1980 was 600 MWe, 950 MWe in 1987, and 2720 MWe in 2000. This has often been attributed to international sanctions following the 1974 nuclear test, a dubious excuse given the rhetoric of indigenous development that has marked the DAE’s public persona. However, even as late as 1984, a decade after the test, the DAE projected 10,000 MW by 2000. Not surprisingly, the DAE did not meet this goal either. The current nuclear capacity is only 3310 MW, barely 3% of the total generation capacity. Another 3920 MW of nuclear capacity is under construction, but of this 2000 MW represents two reactors being purchased from and constructed by Russia. Prior to the July 2005 agreement with the US, the DAE’s medium term plans called for installing 20,000 MW by 2020, which would constitute only 8-10% of the projected total electrical generation capacity. Nuclear power, even going by the DAE ambitious projections, cannot be considered a significant source of electricity. Despite its inability to live up to its promises, the DAE has always received high levels of financial support from the government. In the early years, it cornered over a quarter of all resources devoted to Science and Technology Development in the country. Though reduced slightly in subsequent decades, the DAE’s budget continued to remain high. With the nuclear tests of 1998, the DAE’s funding has increased dramatically over the last few years (see Table 1). Table 1: Government Outlay for DAE (in crores of Rupees) Budget Estimate Revised Budget

19971998 1,836.53

19981999 2,608.06

19992000 2,962.01

20002001 2,750.57

20012002 2,779.39

20022003 3,868.95

20032004 3,800.09

20042005 4,469.97

1,996.33

2,418.12

2,682.04

2,745.21

2,768.59

3,351.69

3,738.77

4,240.46

Source: Union Expenditure Budgets 1998 through 2005 (Plan + Non-plan expenditure)

20052006 4,995.86

For comparison, the revised budget for the Ministry of Non-Conventional Energy Sources that is in charge of developing solar, wind, small hydro, and biomass based power in 2002-03 was Rs 473.56 crores. These sources between them comprise 4800 MW of generating capacity, more than nuclear power. Their contribution to actual electricity generation would be smaller because these are intermittent sources of power. But equally well it must be remembered that most of these power programmes, like wind, started in earnest only in the last decade or two.

A Costly Source of Electricity The promise offered by the DAE is not only that nuclear power would form an important component of the electricity supply, but that it would be cheap. In 1958, Bhabha projected “the contribution of atomic energy to the power production in India during the next 10 to 15 years” and concluded that “the costs of [nuclear] power [would] compare very favourably with the cost of power from conventional sources in many areas” (emphases added). The “many areas” referred to regions that were remote from coalfields. In the 1980s the DAE stated that the cost of nuclear power “compares quite favourably with coal fired stations located 800 km away from the pithead and in the 1990s would be even cheaper than coal fired stations at pithead”. This projection was not fulfilled and a 1999 Nuclear Power Corporation (NPC) internal study came to the less optimistic conclusion that the “cost of nuclear electricity generation in India remains competitive with thermal [electricity] for plants located about 1,200 km away from coal pit head, when full credit is given to long term operating cost especially in respect of fuel prices”.

Even this claim does not stand up to analysis. The costs of generating electricity at the Kaiga atomic power station and the Raichur Thermal Power Station (RTPS) VII – both plants of similar size and vintage – have been compared using the standard discounted cash flow methodology. The coal for RTPS VII was assumed to come from mines that were 1400 km away. The comparison showed that nuclear power would be competitive only with unrealistic assumptions; for a wide range of realistic parameters, nuclear power is significantly more expensive. The details of the methodology and the input data assumptions are given in a peer reviewed paper published in Economic and Political Weekly (23 April 2005). The results are summarized below in Table 2 which lists the levelised cost (the raw generation cost which does not include other components of electricity tariff like interest payments and transmission and distribution charges) as a function of real discount rate, a measure of the value of capital after taking out the effects of inflation. The same is also shown graphically below. Table 2: Total Levelised Costs (in Rs/kWh) of Different Options for Different Real Discount Rates, Capacity Factor of 80%, Economic Lifetime of 40 years for Reactors, 30 years for Thermal Plant Discount Rate 2% 3% 4% 5% 6%

Kaiga I & II 1.28 1.43 1.61 1.81 2.04

Kaiga III & IV 1.19 1.31 1.43 1.57 1.72

RTPS VII (D) 1.36 1.39 1.42 1.45 1.49

Some explanatory comments about Table 2 may help in its interpretation. The largest component of the cost of producing electricity at nuclear reactors is the capital cost of the reactor. The capital cost consists of the construction cost, and the costs of the

initial loading of fuel and heavy water, which is used to slow down the neutrons produced in the fission reactions and to transport the heat produced. To give some concrete numbers: the construction cost of the Kaiga I & II plants was Rs. 2,896 crores, whereas the Kaiga III & IV plants to be built at the same site are projected at Rs. 2,727 crores. While the results in Table 2 have been calculated on the basis of the projected cost, it bears remembering that all of the DAE’s nuclear reactors, including Kaiga I & II, have had time and cost overruns (Table 3). Table 3: Construction Costs of Operating Reactors Station TAPS I & II RAPS I RAPS II MAPS I MAPS II NAPS I & II Kakrapar I & II Kaiga I & II RAPS III & IV

Capacity (MW) 2 X 160 1 X 100 1 X 200 1 X 220 1 X 220 2 X 220 2 X 220 2 X 220 2 X 220

Original Cost (crores) 92.99 33.95 58.16 61.78 70.63 209.89 382.5 730.72 711.57

Revised (crores) 73.27 102.54 118.83 127.04 745 1,335 2,896 2,511

Cost

Criticality Year 1969 1972 1980 1983 1985 1989 & 1991 1992 & 1995 1999 & 2000 2000

The levelised cost of electricity listed in Table 2 from the Kaiga reactors does not include the enormous costs of dealing with radioactive nuclear wastes, which are extremely long lived and represent a burden to future generations. For the RTPS VII coal plant, on the other hand, it includes the cost of disposal of ash. This is costlier than current practice because it assumes that the power plant bears part of the cost for a more environmentally benign way of disposing waste.

Levelised Cost of Different Options as a Function of Real Discount Rate

Levelised Cost (Rs/kWh)

2.2 2 1.8

Kaiga I&II Kaiga III&IV RTPS VII

1.6 1.4 1.2 1 1%

2%

3%

4%

5%

6%

7%

Real Discount Rate

The results listed in Table 2 and the above graph show clearly that nuclear power is competitive only for low discount rates. In a country where there are multiple demands on capital for infrastructural projects, including for electricity generation, such low discount rates are not realistic. The planning commission assumes a nominal discount rate of 12%, which is roughly equivalent to a real discount rate of 7% at the current inflation rates of about 5%, in their calculations for planning and evaluation of projects.

Never fully safe Besides economics, there are other considerations that go against nuclear power, foremost among them being the possibility of catastrophic accidents. In studying the safety of nuclear reactors and other hazardous technologies, several sociologists and organization theorists have come to a pessimistic conclusion: serious accidents are inevitable with complex high technology systems. Charles Perrow of Yale University, who coined the term “normal accidents” to describe this state of affairs, identifies two

inherent features of many hazardous technologies – “interactive complexity” and “tight coupling” – which make them highly accident prone regardless of the intent of their operators and higher authorities. In addition to these structural factors, theorists also point to conflicting interests both within organizations and between organizations and the broader political community, which make accidents more probable while making it unlikely that organizations will learn the appropriate lessons from accidents. The bottom line is that with nuclear reactors, severe accidents can just not be ruled out. There is an empirical basis for concern about nuclear accidents. Practically all the nuclear reactors operated by the DAE have had accidents of varying severity. Other facilities associated with the nuclear fuel cycle have also had accidents. These are euphemistically described as incidents by the nuclear establishment in order to mollify justified public concerns. One can barely imagine the consequences of a Chernobyl-like accident involving the release of large quantities of radioactive materials in a densely populated country like India. The observed safety problems seem to be systemic. In 1995 the Atomic Energy Regulatory Board (AERB), which is supposed to oversee the safe operation of all civilian nuclear facilities, produced a detailed report that identified 134 safety issues, of which about 95 were considered “top priority.” What is of greater concern is that many of these problems had been identified in earlier DAE evaluations in 1979 and 1987 as items requiring “urgent action” but had not been addressed. Not surprisingly the DAE has kept the AERB report a secret. Even now all of these safety issues have not been addressed. These important safety considerations raise the question - should we, as a society, invest in a technology with such severe accident possibilities?

Plutonium Based Reactors One set of reactors that are pose even greater safety concerns and are therefore even more uneconomical are the so-called breeder reactors, which could produce more fissile material than they consume. The DAE has just commenced constructing its first industrial sized one, the Prototype Fast Breeder Reactor at Kalpakkam near Chennai. Unlike the more common thermal reactors, breeder reactors, depending on the design details, can actually explode, though with a yield much smaller than that of a nuclear weapon. The “multi-level safety features” incorporated into the reactor drives up both capital and maintenance costs. Breeder reactors use a mixture of plutonium and uranium as fuel. Plutonium is about 30,000 times more radioactive than the fissile element used in heavy water reactors, uranium-235. Therefore expensive safety precautions are required during fuel fabrication. Just the fabrication cost for plutonium based fuel is many times the total cost of uranium fuel. Add to this the massive costs of reprocessing spent fuel and recovering plutonium. The PFBR needs about two tonnes of plutonium just to become operational. Thus breeder reactors have both of the bad features identified with nuclear power so far – poor economics and accident possibilities – in greater magnitude. They are therefore even less desirable.

Environmental and Health Impacts Of late, the nuclear establishment has been marketing itself as an environmentally friendly source of power. This belies the fact that even on a routine basis, there are many environmental and public health consequences associated with the nuclear fuel cycle. At

each stage, radioactive and various other toxic materials are released to the biosphere. To cap it all, there is the so far unsolved problem of managing large amounts of radioactive waste for many tens of thousands of years. There is some evidence within our country that this has affected the health of people living in those regions. In the early 1990s, a scientific study of the health of the local population around the Rajasthan Atomic Power Station (RAPS) located at Rawatbhata near Kota observed statistically significant increases in, inter alia, the rates of congenital deformities, spontaneous abortions, still births and one day deaths of new born babies, and solid tumours. Similar problems have been seen at the uranium mining area of Jaduguda in Jharkand. Some nuclear power advocates have argued that it can be used to lower carbon emissions. In fact, there is no empirical evidence that increased use of nuclear power has contributed to actually reducing any country’s carbon emissions. The best case study is Japan, a strongly pro-nuclear energy country. As Japanese nuclear chemist and winner of the 1997 Right Livelihood Award, Jinzaburo Takagi pointed out, from 1965 to 1995 Japan’s nuclear plant capacity went from zero to over 40,000 MW. During the same period, carbon dioxide emissions went up from about 400 million tonnes to about 1200 million tonnes. There are two reasons why increased use of nuclear power does not necessarily lower carbon emissions. First, nuclear energy is best suited only to produce baseload electricity. That only constitutes a fraction of all sources of carbon emissions. Other sectors of the economy where carbon dioxide is emitted, such as transportation, cannot be operated efficiently using electricity from nuclear reactors. This situation is unlikely to

change anytime in the near future. A second and more fundamental reason is provided by John Byrnes of the University of Delaware’s Centre for Energy and Environmental Policy, who observed that nuclear technology is an expensive source of energy service and can only be economically viable in a society that relies on increasing levels of energy use. Nuclear power therefore tends to require and promote a supply oriented energy policy and an energy intensive pattern of development, all of which work towards increased carbon emissions. The high cost of nuclear power also means that any potential decreases in carbon emissions due to its adoption are expensive when compared to other means to lower emissions.

Conclusion Nuclear power is an expensive of trying to address energy needs. This cost is an important factor weighing against it; one must remember that the 2003 Electricity Act emphasizes economic competition as the basis for energy policy. Nuclear power also comes with important safety concerns and other damage to the environment. Its contribution to mitigating climate change is modest at best and insignificant at worst. It is time to stop throwing good money after bad and focus on other sources of power, especially renewable ones, as well as energy conservation measures and ways of reducing polluting emissions from existing power plants. M. V. Ramana is a Fellow at the Centre for Interdisciplinary Studies in Environment and Development, Bangalore (http://www.cised.org). He may be contacted at [email protected].

Figure 1: Radiation Hotspots Resulting From Chernobyl Accident