No big deal

During his recent three-nation tour, Prime Minister Narendra Modi oversaw nuclear agreements both in France and Canada. The Indian Nuclear Power Corporation (NPCIL) signed a pre-engineering agreement with the French company Areva, which is supposed to supply European Pressurised Reactors (EPRs) for Jaitapur (Maharashtra). In Canada, the NPCIL agreed to purchase about 3,200 tonnes of uranium over the next five years from the Canadian company Cameco.

On his return, the Prime Minister emphasised the significance of these deals and even reportedly explained to his party’s parliamentarians that they would have a “huge impact”. However, the facts suggest otherwise. The impact of the deal with Canada is likely to be rather limited. And far from having a positive impact, the French deal advances a purchase that makes no sense from the standpoint of either technology or economics.

The uranium from Canada can only be used for reactors that are safeguarded by the International Atomic Energy Agency. Leaving aside ‘light water’ reactors like Kudankulam — which require enriched fuel, which is covered by separate contracts — the remaining ‘heavy water’ reactors under safeguards have a total capacity of 1,960 mega watts (MW). Extrapolating from figures released by the Prime Minister’s Office (PMO) in parliament in February, these reactors require only about 400 tonnes of uranium each year when operating at a capacity factor of 85 per cent. But, as the PMO admitted in parliament in 2014, there is already “sufficient fuel available for these reactors to operate at their rated capacity” primarily, as a result of uranium imported from Kazakhstan and Russia.

Even for Cameco, the deal is minor; the anticipated sales of about 640 tonnes to India each year constitute only four per cent of its total annual sales of about 15,000 tonnes. In an attempt to present a rosy picture to its investors, Cameco tried to wish away this reality. It claimed that “by 2032, India expects to have 45,000 megawatts of nuclear capacity” and so “this contract opens the door to a dynamic and expanding uranium market.”

This suggestion — that the Indian nuclear sector will expand by about 700 per cent over the next 17 years — ignores history. The Indian nuclear establishment has regularly made such promises only to disappoint each time. For example, in 1984 a ‘profile’ produced by the Department of Atomic Energy (DAE) promised nuclear capacity of 10,000 MW by 2000. Reviewing the programme 15 years later, the Comptroller and Auditor general found that the “actual additional generation of power under the profile... was nil”.

In 2003, the secretary of the DAE wrote that “in about four years from now, DAE will reach an installed capacity of 6800 MW.” Twelve years later, total installed capacity, at 5,780 MW, still falls short.

At the same time, the DAE also claimed to have “formulated a programme that envisages setting up of about 20,000 MW… by the year 2020”. This target has, presumably, since been completely abandoned.

The insignificance of the Canadian deal can also be measured by a different metric: its relevance is limited to reactors that generated only about 1.5 per cent of the total electricity produced in the country over the last year. In light of this, the reported claims by the Prime Minister that “[the deal] is to save the world… from global warming and climate change” appear to be merely bombast.

While the deal with Areva was overshadowed in the media by coverage of defence agreements, it is potentially far more significant and could have serious consequences for nuclear safety and the country’s own economic interests.

The Jaitapur project has close parallels to Enron: the EPR reactors represent a flawed and expensive technology marketed by a company in deep economic difficulty. Areva started work on its first EPR in Olkiluoto (Finland) in 2005. Instead of completing work in the promised four years, it has now pushed back the date for commissioning to 2018. In 2012, it announced that costs had increased to about $10 billion — almost 300 per cent of its original estimates. Similar delays and cost increases have occurred at the other European build of the EPR at Flamanville (France). Even assuming optimistic reductions in the cost of construction in India, in a detailed study for the Economic and Political Weekly , we estimated that electricity at these reactors would cost about ₹15 per unit excluding transmission and distribution costs. This is several times higher than competing sources of electricity.

More alarmingly, just ahead of Modi’s visit, on April 7, the French Nuclear Safety Authority announced that Areva had discovered “anomalies” in the reactor pressure vessel of the Flamanville EPR that led to a “lower than expected mechanical toughness.” The safety of the pressure vessel, which contains all the radioactive material and the fission reactions within the nuclear reactor, is critical, especially in the case of the EPR that will hold the largest load of nuclear fuel of any reactor in the world.

This discovery underscores the folly of the Modi government’s efforts to reinterpret India’s liability law to protect suppliers from the consequences of accidents caused by design defects.

Unlike in the case of Cameco, however, the contract with India might give a lifeline to Areva, whose commercial outlook is extremely bleak. In March 2015, after Areva announced a loss of €4.8 billion, the credit-rating agency Standard & Poor’s (S&P) downgraded it to ‘BB—’, or what investors call ‘junk grade’.

In spite of this, Modi’s joint statement with the French president suggests that his government remains committed to the eventual purchase of up to six EPR reactors. If this is indeed carried through, it would involve the bailout of a crumbling French public sector company by Indian taxpayers.

In a speech to Indo-Canadians, Modi explained that “we have to have an energy revolution in India.” However, his government’s actions — the liberal use of propaganda to embellish insignificant deals, and a promise to spend billions of dollars on failed technology peddled by a multinational corporation — provide a revealing commentary on these grand pronouncements.

(Suvrat Raju and MV Ramana are physicists with the Coalition for Nuclear Disarmament and Peace. The views expressed are personal)

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