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14 July 2016, Gateway House

Renewable 1, Nuclear 0

India’s newest reactor shows what’s wrong with nuclear power, and why India must go slow on expensive western designed nuclear power projects.

Fellow, Energy & Environment Studies Programme

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India’s newest nuclear reactor shows why renewable energy, and not nuclear power, is the future for carbon free energy.

The Unit-2 of the Kudankulam Nuclear Power Plant achieved criticality on 10 July 2016, meaning the nuclear reaction inside became self sustaining. Work on the Kudankulam Atomic Power Plant started in September 2001 – so this reactor has been almost 15 years in the making. Commercial electricity generation from this reactor will start in another 4-6 months. The contrast to renewable energy is stark. Renewable energy installations, solar or wind, take 1-1.5 years to put up. Smaller installations can be done in a few months.

Lower capital requirement, shorter execution cycle and no fuel costs means renewable energy is cheaper compared to nuclear power – and this is showing up in actual investments.

The Nuclear Power Corporation of India proposes to build two more reactor units at Kudankulam, of 1,000 megawatts each, at a total cost of Rs 39,849 crore – or Rs 20 crore per megawatt. Other options are even more expensive – for instance, a reactor that Westinghouse is building in the US has a capital cost of $7 million – or Rs 46.5 crore per megawatt of capacity. A single nuclear reactor can be 1,000-1,500 mw – so the minimum required investment runs into several billion dollars. Long execution times mean this capital is unproductive for a decade or more.

Electricity from the proposed Units 3 & 4 of Kudankulam power plant will be Rs 6.3 per unit, if these are completed on time, at the projected cost. If India goes for more expensive options, such as reactors from Westinghouse or Areva, electricity costs are likely to be even higher. This can tie up tens of billions of dollars for a decade or more, and eventually supply electricity too pricey to be viable.

The only viable nuclear option for India can be the indigenously designed pressurized heavy water reactor (PHWR), which has a much lower capital cost of Rs 14 crore per megawatt and can therefore supply electricity at cheaper rates.

Compare this to renewable energy. Renewable energy, wind and solar – has a capital cost of ~Rs 6 crore per megawatt. Renewable energy investment can be anywhere from a few kilowatts to grid-scale plants of 1,000 mw. Finally, solar and wind power plants don’t require fuel, which means lower operating costs as well.

India’s recently set target of 175,000 mw of renewable energy capacity by 2022 is ambitious, but not fanciful. The past six months have seen a number of developers bidding to supply solar power at a low of Rs 4.34 per unit.

Apart from the financial argument, there are three other issues with nuclear power – the risk of accidents, the risk of sanctions and the long term costs of nuclear waste.

  • The 2011 Fukushima disaster showed how the best laid plans can come undone – the disaster has so far cost over $50 billion and has rendered several areas too contaminated for habitation.
  • Sanctions are a concern. India has sufficient uranium to fuel just about 2,000 mw of nuclear reactors – the rest need imported fuel. India had been locked out of the uranium trade following the 1974 nuclear test – a restriction which was finally lifted after the 2005 India-US nuclear deal. Any restrictions on nuclear trade can put multibillion dollar investments at risk.
  • The waste generated from nuclear power plants remains radioactive for hundreds of years, and there is a cost for storing it for this duration.

These add to nuclear power costs, giving renewable energy the commercial advantage – which is already evident.  Renewables accounted for 5.6% of the total electricity generation in India during the last financial year, against a share of 3.1% for nuclear power.

Amit Bhandari is Fellow, Energy & Environment Studies, Gateway House.

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