Category — Nuclear Energy

The USA, France, Russia, Canada, Mongolia, Kazakhstan, Argentina and Namibia had already signed some level of nuclear power cooperation agreement with India in the wake of the 2008 breakthrough led by President Bush. Financial benefits have flowed most to Russia and Rance so far.

In Seoul last week, visiting Indian President Pratibha Patil signed a civil nuclear cooperation agreement which will pave the way for Seoul to export atomic power technology to the Nuclear Power Corporation of India Ltd (NPCIL).  The pact, signed after summit talks between President Pratibha Patil and her South Korean counterpart Lee Myung-bak, provides legal ground for South Korea’s participation in the construction of atomic power plants in India. South Korea operates 20 nuclear plants that generate some 35% of its electricity needs.

This week, the First Pour of Concrete (FPC) was initiated at RAPP-7, the seventh reactor to built at the Rawatbhata, Rajasthan location in the deserts of northwestern India.

The new plant will have a capacity of 700 megawatts, the largest heavy water reactor possible.  The Nuclear Power Corporation of India (NPCIL) hopes to start commercial operations by June 2016. The first pour of concrete for Unit 8 at this  location is expected later this year. The Rajasthan Atomic Power Stations already has six reactors (of which RAPS-2 to RAPS-6 are functional) with a total capacity of about 1.2 gigawatts.

The RAPP7  ceremony was attended by India’s Atomic Energy Commission Chairman Dr. Srikumar Banerjee and Nuclear Power Corp. of India Limited Chairman and Managing Director Shreyans Kumar Jain. The700-megawatt PHWR was designed by NPCIL engineers by scaling up the design of its 540-megawatt PHWRs operating at Tarapur since 2005.

Two additional 700 megawatt units are already being built at Kakrapar, in Gujarat close to the Western coast.

What this means:

The Tummalappalle uranium mine in the Cuddapah district of Andhra Pradesh in southern India has the potential to become among largest uranium mines in the world, according to Dr. Srikumar Banerjee, Chairman of the Department of Atomic Energy.  Estimates went up from 14,000 tonnes to 49,000 tonnes and there is a good possiblity that the ultimate number would be 150,000 tonnes, effectively doubling India’s known reserves of the mineral required to fuel India’s ambitious nuclear energy program.

Tummalapelle, potentially the largest uranium mine in the world

India imports most of its uranium today. Even with the development of this new mine, demand will grow so rapidly that the country will continue to depend on foreign fuel for its light water reactor programs.

What this means:

Foreign reactor suppliers to India will probably still be requested to guarantee a lifetime supply of enriched uranium for the plants they build. But India will have some relief for its own heavy water plants, which can use un-enriched uranium.

India’s parliament passed a new liability law last year.  The Civil Liability for Nuclear Damage Bill 2010 determines how the liability for an accident would be apportioned among equipment suppliers and vendors under the provisions of the nuclear liability law. But many suppliers find it lacking. Equipment makers, including India’s Bharat Heavy Electricals and France’s Areva, have made it clear that dealing with the state owned Nuclear Power Corp, which operates Indian reactors, would be challenging if the present conditions were not tweaked.

Nuclear Power Corporation (NPCIL), the country’s only permitted entity to generate such energy, is worried that after a mishap it will be difficult to fix responsibility of vendors. “It’s not a turnkey contract. A nuclear project is a complex mix of 2,000 industries,” company chairman and managing director SK Jain told the Economic Times. “The question is who will be sued. The damage can be due to failure of components, poor upkeep or not using original spare parts or deploying technical people,” Jain said.

What this means:
Since both the customer (NPCIL) and suppliers from India and overseas are proposing a change in the conditions of the law, it is only a matter of time that some accomodation should be made

In a paper circulated among members of the exclusive “Nuclear Suppliers Group”, the United States, which had committed to supporting India’s quest for membership to international non-proliferation regimes (namely the NSG, Australia Group, Wassenaar Arrangement and Missile Technology Control Regime or MTCR) has articulated a set of proposals to all  members for India’s accession. It appears that the US supports making an exception to accommodate India, rather than a wholesale change to the rules.

If this finds broader acceptance within the NSG, India’s entry could become easier, perhaps as early as the current plenary meeting which is ongoing now. Note the NSG was founded partly in response to India’ first nuclear test in 1974. India did not sign the Nuclear Non-Proliferation Treaty when it was first proposed and is not proposing to sign in now. This causes hesitation on the part of some NCG members.

What it means

Politically there are many implications to NSG membership for India and its impact on other potential applicants in the future and are discussed here. For business today, politics matters less but one major impact is that India would truly be eligible for two-way civil nuclear trade; NPCIL is eager to sell its 200 MW heavy water reactors to countries and locations that don’t need the full size 1000 MW reactors offered by GE/Westinghouse and others.