New Delhi’s plans to allow some of the world’s biggest nuclear power companies to build reactors in India have been boosted by the news that Westinghouse, one of those companies, is planning to exit bankruptcy within months. But with renewable power dropping in price and India now provided with a surfeit of electricity generation, some analysts are doubting the wisdom of spending millions of dollars on large and expensive foreign-built plants.
Krish Rajan, vice-president for Westinghouse in India, said last month that the company expected to exit Chapter 11 proceedings early next year, adding that it still intended to build six reactors in India.
That news has been welcomed by some in the Indian government, which is one of few around the world still looking to expand its nuclear power capacity following the 2011 Fukushima disaster.
Ravi Grover, a nuclear scientist and adviser to the department of atomic energy, says: “Electricity generation in India will continue to grow at about 6 per cent. India can provide for this on the basis of coal-fired power plants or low carbon sources, and it is desirable that low-carbon sources are given preference. “If nuclear power from foreign sources does not materialise, it would imply generation from coal-fired sources would have to be higher.”
Others, however, argue that India should focus instead on its growing renewables revolution, which has seen the cost of solar power drop below that of coal.
“Renewables are quicker, cheaper and more convenient to build,” says Amit Bhandari, a fellow at the Gateway House think-tank. “We already have constant power being delivered by our coal plants. We should be focusing what capital there is on renewable generation.”
India has one of the world’s oldest nuclear power programmes, having built Asia’s first research reactor in 1954. But the amount of electricity generated by nuclear plants remains tiny compared with other forms of generation.
The country has 22 reactors providing up 2.1 per cent of the country’s overall capacity, compared with 17.7 per cent from renewable sources and 58.7 per cent from coal.
The Indian nuclear power industry has long been hampered by a lack of uranium, with restrictions on imports imposed after India’s first nuclear weapons test in 1974. But a deal with the US in 2010 paved the way for New Delhi to begin talks with the US-based companies Westinghouse and GE Hitachi, as well as Areva of France.
In recent years those talks have ground to a halt, in part because of India’s insistence that nuclear power plant developers should be liable for any future accidents — something no other country demands.
Narendra Modi’s government has tried to limit the impact of that law by setting up an insurance fund for potential victims of a nuclear accident, but industry executives still insist it should be scrapped.
Another reason for the lack of progress has been the dire financial health of both Westinghouse, a subsidiary of Toshiba, and Areva, which remains deep in debt even after being recapitalised by the French state.
Nuclear power companies worldwide have struggled since Fukushima, which saw several of the world’s biggest economies cancel their atomic energy programmes. The comments last month by Westinghouse’s Mr Rajan have provided hope to some in New Delhi that talks might soon resume. But some experts believe they are going nowhere.
“There are no active negotiations with foreign vendors,” says Brahma Chellaney, a professor at the Centre for Policy Research in New Delhi. “Years after India signed the nuclear deal with the US, not a single western-designed power plant is under construction, and even if you started now it would not be built for another 10 years.”
Westinghouse would not comment further, nor would GE Hitachi or Areva. A government spokesman did not reply to a request for comment. Mr Chellaney argues that India should instead concentrate on rolling out its domestically designed plants, which are smaller and cheaper than those built by international companies. According to Mr Bhandari’s calculations, a domestic plant can be built for about $3 per megawatt, while a Westinghouse one is likely to cost between $6 and $7 per megawatt.
“Indian nuclear plants are of a reliable design, and are more efficient in terms of cost,” says Mr Chellaney. “What’s more, because they are built by a state-owned operator, the government can stop worrying about who would pay the cost in the event of a nuclear accident — they would.”
Source: The Financial Times