Pacific Energy Summit 2015 Beijing

PACIFIC ENERGY SUMMIT

BEIJING 2015

I was in Beijing to attend the Pacific Energy Summit from May 27-29. (http://www.nbr.org/research/activity.aspx?id=507) The summit was organized jointly by the National Bureau of Asian Research, US and the China Energy Research Society.

Although the topic covered the whole Pacific, the session was dominated by China, which had deputed their top experts to make the right impression. Five experts from India were also invited. The general consensus was that fossil fuels would dominate the world energy scene in 2035, accounting for about 83% of the energy consumption. Renewables would have a greater share than nuclear power. In fact, nuclear power did not figure in the discussion much, except in one roundtable with the title, “The Future of Nuclear Energy” in which I participated.

The Moderator of the roundtable, a South Korean expert, asked us three questions to which we answered. My recollection of what I said about India’s nuclear power scene is below:

1.Role of nuclear power in the energy mix in India.

It is estimated that, in order to reach a growth rate of 8 percent per annum up to 2031-32, India needs to increase primary energy supply three to four times and increase electricity generation capacity five to six times from the 2003-04 levels- that is, power generation capacity must increase from the current 160,000 MW to nearly 800,000 MW by 2031-32.

To achieve the energy requirement targets, India has to enlarge its nuclear energy capacity by obtaining the material and technology to pursue civilian nuclear power projects and pursue energy efficiency and demand side management policies.

Nuclear energy contributes only less than 2% to the energy mix in India today. India is aiming at a 20-fold increase in India’s nuclear power capacity by 2031-32. Even then, the contribution of nuclear energy to India’s energy mix would be, at best, 4 -6.4%

India’s commitment to developing nuclear technology to the maximum extent possible has not been affected by the fluctuations in nuclear fortunes on the global scene. The development of nuclear power in India is driven as much by fantasy and romance as by scientific and strategic calculations and the market. Behind it are the aspirations for self- sufficiency in energy and the sense of national pride in contributing an indigenously developed programme to the growth of global technology. Unlike the other major users of nuclear power, India’s nuclear programme is not a bye-product of a strategic effort. It was designed as a three- stage power programme by Pandit Nehru and Homi Bhabha, taking into account the limited availability of uranium and the presence of the largest thorium reserves in the world in India. It was developed as a closed fuel cycle, where the spent fuel of one stage is processed to recover fuel for the next stage. It is still on course, though there have been delays in reaching the third stage. India today operates 21 reactors and 7 reactors are under construction.

2. Obstacles that hinder the development of nuclear energy in India.

The advent of the NPT and India’s decision not to join it because of its discriminatory nature resulted in India’s nuclear isolation. The IAEA, which India helped establish as a promotional agency, ended up as a watchdog and the technical cooperation envisaged became ritualistic. The formation of the NSG after India’s PNE in 1974 ended international cooperation, but India went ahead with its own programme. The nuclear explosions of 1998 brought in additional sanctions.

Finally, the India-US nuclear agreement on civilian nuclear cooperation ended India’s isolation, opening up the nuclear market, paving the way for a major expansion of nuclear power. But the decision of the Indian Parliament to establish supplier liability for damages drove the US suppliers away from India. A formula to deal with the situation has evolved during the visit of the Indian Prime Minister to the US, but problems remain. Globally, the Fukushima disaster dampened the hope of a nuclear renaissance. Safety considerations assumed greater importance and the enthusiasm for nuclear power declined worldwide. The cost of electricity generated by nuclear power has become uncertain on account of the gigantic cleaning costs an accident would entail.

India has emphasized that it will be business as usual, regardless of the complications of the nuclear liability law and the fear among the people about possible dangers. Fortunately,

Russian and French companies are willing to work with India, even with the liability law, as they are Government companies. India’s safety record is also a strong point. Indian scientists argue that the “catastrophe syndrome” around nuclear energy is unjustified and that nuclear energy is not only eco- friendly, but also “as safe as air travel”. They maintain that considering India’s growing need for power, the country would have to resort to nuclear technology and that even if accidents took place, they could be controlled.

Two factors, however, have militated against the smooth development of nuclear power in most countries, including India. The cost of nuclear plants is very high, even though they have very low annual operational costs and negligible carbon dioxide emissions.

The increasing public consciousness of the safety issue and the cost versus benefit aspects of specific projects have cast a shadow on the programme. The protests in Kudankulam, the venue of the Russian reactors and the potential venue for a French reactor have assumed serious proportions. The inordinate delays in setting up the Russian reactors have not enhanced public confidence at all. Unless India builds facilities around its reactors for rescue and rehabilitation and strengthens its regulatory mechanisms, nuclear energy skeptics will grow and erode the effort to expand nuclear energy.

3. Policy measures that can be taken to expand nuclear power generation.

First and foremost, the public should be taken into confidence about the risks involved and build facilities for rescue and rehabilitation. Safety measures should be strengthened and drills should be conducted to verify the safety measures. India should also reduce its dependence on nuclear power to rid the future generations of the danger of nuclear accidents.

India, China and South Korea have a good record and they can work together with the IAEA to enhance safety.  The IAEA’s pillars were considered to be nuclear power, safeguards, technical cooperation and safety. After 9/11, security became paramount, but after Fukushima, there is greater accent on safety. Safety inspections by the IAEA have been welcomed by India after the Fukushima accident. Transparent safety and regulatory measures are extremely important. India’s actual performance in generation of nuclear power has fallen short of expectations, but the Indian programme is still an ambitious one.

One of India’s strengths is the strong team of nuclear scientists we have built up over the years. They have been placed at the disposal of the IAEA to ensure safety. Many Indian scientists have been involved in the search for missing nuclear material. Much of the reported material has been recovered, but material that was never reported lost has also been recovered. The availability of enriched uranium in the clandestine market is also a matter of concern. The IAEA should tackle these safety and security issues as a matter of urgency.

The discussion that followed was focused on the Chinese programme, when a participant quoted a report that the Chinese nuclear programmme was “insane” on account of the hazards involved. The Chinese representative held forth on safety measures, but did not carry conviction.

When the Chinese expert mentioned Pakistan as a country, which benefitted from Chinese cooperation in nuclear energy, I could not help asking whether such cooperation with Pakistan was not against NSG norms. He murmured something about the “grandfather clause”, which the moderator dismissed as political. Another Indian representative pointed out that nuclear cooperation should only be with responsible and stable countries.

There was very little time for informal interactions with delegates as even social occasions were used for speeches. I did not notice any warmth for India in the Chinese statements. One Chinese gentleman told me privately that there were too many Indians at the Summit. He also objected to the use by an Indian delegate of the word “Chindia”, apparently coined by Jairam Ramesh.

One of the lunchtime talks was on Climate Change. The Chinese speaker dwelt at length on the China-US agreement and stressed the idea of China peaking in 1930. He made no mention of the agreement with India signed at the time of the Indian PM’s visit. Kyoto appeared to be an old chapter for them and it would have no relevance to Paris later this year.

I had no chance to visit the Embassy or to call on the Ambassador. But I was delighted to meet two smart young officers, who insisted on showing me a bit of Beijing. Both Thelma David and Gince Mattam are fluent Chinese speakers. My gratitude to them.