Nuke deal to make 'insignificant' impact in India's overall energy mix, says experts

The Indo–U.S. civilian nuclear cooperation deal that was signed by US President George W. Bush last December, is unlikely to make a significant impact in India's energy sector, energy experts in India have said.

Though the share of nuclear power in the Indian energy basket could go up from the current level of 3 percent to anywhere between 6–10 percent over the next 25 years, "It will take a fairly long time to make a significant dent on the overall energy mix," Salman Zaheer, World Bank's lead energy specialist based in Delhi, said.

Even after all the hurdles for the supply of nuclear fuel are crossed, building a nuclear power plant could also take 6–8 years, he said.

According to energy experts, cost of building a nuclear power plant is also more than other types of power plants. In fact, nuclear power plants are the most expensive to build requiring Rs. 6 crore of capital expenditure per megawatt (mw) when compared with Rs. 3.5 crore for a gas–based plant, Rs. 4 crore for a coal–based plant and over Rs. 5 crore for a hydro plant, they said. However, their running costs are lower, and there are also no carbon emissions to worry about.

"Nuclear energy is a good option for power generation," said power secretary R.V. Shahi, "though the capital cost is somewhat higher, in the long run, the fuel cost would be less."

Nuclear power, like coal–based power, would be best used to service "base load," an industry term used to indicate steady demand, say from a factory running 24–hours. Gas and hydro plants, since they are easier to switch on and off, are used to meet peak requirements. "The ideal mix for each country is different," Zaheer said.

In the interest of energy security, however, India should continue its work on thorium–based plants based on indigenous technology. "It is not a question of either–or. Work on thorium (a resource in which India is rich) should continue," Leena Srivastava, executive director at Tata Energy Research Institute (TERI), said.

The Integrated Energy Policy of the Planning Commission has also called for pursuing the thorium option, saying that India must "tap its vast thorium resource to become truly energy independent beyond 2050."

Presently, 66 percent of India's energy requirements are fulfilled by thermal power plants, 26 percent by Hydro plants, 3 percent by nuclear plants and 5 percent by others.

US President George W. Bush signed the landmark civilian nuclear deal with India, a controversial pact he hailed as critical to better US ties with the world's largest democracy, December 18, 2006.

"The United States and India are natural partners," President Bush said at a White House signing ceremony, calling the agreement "evidence of the growing bonds of trust between our two countries."

The US President and Indian Prime Minister Dr. Manmohan Singh agreed to the deal during President Bush's July 2005 visit to India, and the US Congress approved the arrangement on December 9.

The two nations now face tough negotiations on the nuts and bolts of the complex deal, which allows US sales of civilian nuclear fuel and technology to India for the first time since Delhi tested a nuclear device in 1974.

They include devising a bilateral agreement incorporating all technical details of the deal, as well as nuclear safeguards for India that must be endorsed by the international community.

Popularly known as a "123 Agreement," the bilateral pact will be the sole binding document defining the terms of the anticipated nuclear commerce arising from the deal, which the US Chamber of Commerce says could open up a whopping 100 billion dollars in opportunities for American businesses.

The bilateral agreement will have to be approved again by the US Congress, to be controlled next year by Democrats known for their strong non–proliferation views.

One key component of the bilateral agreement is nuclear safeguards, which India, a non–signatory of the nuclear Non–Proliferation Treaty (NPT), would be subject to under a separate agreement with the International Atomic Energy Agency (IAEA), the global nuclear watchdog.

The other is the guidelines governing civilian nuclear commerce to be drawn up with the 45–nation Nuclear Suppliers Group (NSG).

The pace of the negotiations for the bilateral pact would depend on how far the Indians will go in accepting IAEA safeguards aimed at ensuring that New Delhi does not use any US nuclear materials or technology to expand its military nuclear arsenal.