India has been among the world’s fastest growing economies for the past two decades. The country continues to lead not only in growth but also in energy demand growth. India wants to meet its growing energy demands first of all through expanding its nuclear sector and secondly by the development of other “greener” options. Ritwik Mukherjee, editor of the Indian energy journal Energy Ensemble, discusses the challenges faced by India and the opportunities for western companies. “There is a growing belief in India that in Europe solutions exist to address the challenges that India is facing in areas of clean technology.”
While putting forward India’s case, I will base my arguments on what I know from my regular interactions with the country’s intellectual leaders, policymakers, energy executives, scientists and engineering whom I regularly meet by virtue of my profession.
At this moment of writing, India’s politically sensitive Kudankulam nuclear power project has just been commissioned, after much delay. It is the first Pressurised Water Reactor (PWR) belonging to the Light Water Reactor (LWR) category to be built in India, and the 21st nuclear power reactor in the country. It has already started generating close to 400 MW of power production. Moves are also afoot to connect the plant with the grid.
India’s atomic power plant operator, NPCIL, has been building two 1,000 MW reactors with Russian help at Kudankulam since 2001. Villagers united under the banner of the People’s Movement Against Nuclear Energy have opposed the project for the past two years, fearing for their safety, especially since the nuclear disaster at Fukushima in Japan in March 2011. The Fukushima nuclear accident has led to many questions being raised in India and elsewhere about the safety and necessity of nuclear power.
The Indian authorities and scientific community, however, have reaffirmed that in India there is no risk to setting up a nuclear power station. According to them an accident like Fukushima is not possible because a “thermosiphoning” system is used to reduce the generation of excessive heat. This, they say, is a completely autonomous, modernised and safe system.
Although it depends on the Atomic Energy Regulatory Board (AERB) to examine the test results and decide whether this is a safe reactor, most scientists in India have no doubt whatsoever that the reactor is safe. Scientists also point out that the radiation from a nuclear power plant is much lower than natural background radiaton. Those who were directly involved in building the plant at Kudankulam say it is one of the safest nuclear power facilities in the world, able to resist the strongest of tornadoes or direct impact by an aircraft.
India has a vision of becoming a world leader in nuclear technology due to its expertise in fast breeder reactors and the thorium fuel cycle.
These views have to be seen in light of the fact that there are many who think that in India atomic energy is probably the only option for the country to attain energy security. Nuclear power can make India self-sufficient in energy. Otherwise, even if India buys all the oil in the world, it would not be sufficient for its energy needs.
Significantly, Indian Prime Minister Dr Manmohan Singh has recently said that in order to meet the rising aspirations of the Indian people, the supply of affordable clean energy will be one of our foremost national challenges. And he added that nuclear energy will remain an essential and increasingly important element of our energy mix.
Indeed, Singh said India has a vision of becoming a world leader in nuclear technology due to its expertise in fast breeder reactors and the thorium fuel cycle. The country has very ambitious plans for its nuclear sector: it wants to have a total of 470 GW installed by 2050. That is more than the entire nuclear capacity of the world today. The Atomic Energy Commission, for its part, envisages some 500 GW nuclear will be on line by 2060, and has since speculated that the amount might be higher still at 600-700 GW by 2050, providing half of all electricity.
The Indian government does not see any other feasible options if it is to meet the growing energy demand in a secure, affordable way. India’s power demand is growing by the day. At the same time, India is heavily dependent on imported energy resources. Coal provides 68 per cent of electricity consumption at present, but coal reserves are limited. Gas and hydropower each supply 12 per cent, nuclear power about 4%.
India’s per capita electricity consumption is expected to double by 2020, with 6.3 per cent annual growth, to about 1700 TWh. It is expected to reach 8000 TWh/yr by 2050, ten times as much as today. Hence there is an acute demand for more and more reliable power supplies. One third of the population is not connected to any grid.
In the end the realization of India’s nuclear ambitions depends above all on the political will and the determination to execute the plan plans. At present, India needs overseas sources of uranium to power its reactors. In the long term, however, it will have to free itself from foreign sources by developing what it needs to complete the full nuclear-reprocessing cycle.
India has the lowest electricity consumption per capita among the BRIC countries.
Nuclear power is also pursued because it is in the long term cheaper than coal. According to experts, in India where low grade coal is used to generate thermal power, generation costs are now quite high. The cost of generating atomic energy will be lower. In addition, the fight against global warming is viewed as an argument in favour of nuclear power.
There is no doubt that India will have to pursue a combination of nuclear energy, clean coal and renewable energy in order to meet the increasing electricity demand over the next decade. According to a recent report by KPMG Global Advisory Practice, entitled “Think BRIC”, “India’s total generating capacity should jump by 90 GW, to 241GW, with an increased emphasis on nuclear, clean coal and renewable, including solar and small-hydro.”
Manish Agarwal, executive director at KPMG, told me that with per capita GDP rising by about 6- 8 per cent per year, India could face challenges until 2020 to comfortably meet its demand.
According to the KPMG report, generation capacity hit 150GW in 2006, a 40 per cent increase on the 2000 figure, after reforms in 2003 initiated a much needed restructuring of the power sector. However one respondent of the KPMG survey estimated that at least 500 million Indians still have no access to electricity.
The KPMG survey points out that India has the lowest electricity consumption per capita among the BRIC countries. India’s electricity consumption per capita is expected to be roughly 841 kWh in 2020, representing only about one quarter of the global average.
According to the study, the country’s peak power capacity deficit is growing. This deficit is partly caused by inefficiencies in the transmission and distribution systems and by electricity theft. To combat this, the government has announced it will establish an independent regulator which will stimulate growth in private investment and public-private partnerships. Private investors have already started building independent power plants, with the share of privately generated electricity currently at around 13 per cent of the total and rising.
There is a growing belief in India that in Europe solutions exist to address the challenges that India is facing in areas of clean technology.
Coal, which already provides almost 70 percent of India’s power, will remain the dominant primary fuel for a long time to come, holding out commercial opportunities to those producers who are global leaders in high efficiency, clean-burning plants. But with India needing to diversify production, openings will exist for nuclear, gas and small hydro schemes. Also the need to extend basic electricity to the vast rural population means that there are massive opportunities in wind, biomass and, if we can get the prices right, especially solar energy.
It should be noted that India’s nuclear journey is not expected to be smooth sailing. There will be a lot of apprehension and resistance from people. The Indian government has therefore simultaneously launched the Jawaharal Nehru National Solar Mission, which has set a target of achieving 20 million square meters of installed solar water heaters and a power production of 2 GW through off-grid solar systems by 2022. To support the venture, the government introduced a capital cost subsidy of 30 per cent and a five per cent interest rate subsidy to finance loans. In early 2012, the interest rate was abolished and the capital cost subsidy raised to 40 per cent. At this moment some 1800 MW of solar power is connected to the grid in India. Note that world market leader Germany had over 32 GW installed by the end of 2012.
In my view, the time has come for India to take a cue from the successful Indo-Russian cooperation at Kudankulam and ensure a smooth inflow of overseas funds and technology in the energy sector, whether it be nuclear, solar, wind or other forms of renewable energy. Such efforts have already started. The European Business and Technology Centre (EBTC), for instance, has been very active in India for the last five years or so. EBTC is an initiative co-funded by the European Union (EU), and coordinated by Eurochambre. Despite market barriers, EBTC has managed to facilitate 23 collaborations between Indian and European companies in areas of clean technology over the last few years.
Market barriers include different technical standards, lack of access to finance, cultural business issues, lack of market intelligence, and most importantly, adapting technologies to suit specific Indian requirements. But there is a growing belief in India that in Europe solutions exist to address the challenges that India is facing in areas of clean technology. These European solutions can now be showcased and demonstrated in India virtually as well as physically.
One example of such cooperation is an MOU recently signed by India and Belgium at a meeting between Dr. Farooq Abdullah, the Indian Minister for New and Renewable Energy, and Princess Astrid of Belgiumm, who headed a Belgian Economic Mission to India. On this occasion Dr. Abdullah spoke of India’s plans to add over 30 GW of renewable energy to its energy mix in the next 5 years.
This article is based on a paper presented by the author at 8th Economic Forum, Sopot, Poland, organized by the Economic Forum Programme Council of the Foundation Institute of Eastern Studies in December 2013. It has also been published in the Indian energy journal Energy Ensemble, with which Energy Post has established a content partnership.
Note that the Indian government has just announced that it is hoping to secure a loan worth $500 million from the World Bank to kick off construction of what would be the largest solar power plant in the world near Sambhar lake in Rajasthan. The loan, if approved, would finance the first 750MW of the 4GW ‘ultra mega’ solar PV project, which was first announced by the government in November last year. (Source: RenewEconomy.com.au)