September 08, 2008
 

NSG approves nuclear commerce with India

On Saturday, the NSG, whose raison d'être, was the 1974 nuclear test by India, approved the India-specific exemption in its guidelines for transfer of fuel & technology for usage in India's civilian nuclear programme despite having a strategic programme and not being a signatory to the NPT or the CTBT.

Read the NSG statement.

In 2006, the NPT was made irrelevant by North Korea. What's the chance that in a few years from now, India will be listed among the list of members given India's Thorium resources?

Manmohan Singh staked his government after the Loony Left withdrew support. His risk has been rewarded.

The actual impact of the deal on the power shortage will only be seen over the few years. In the short term, we can source fuel from various suppliers. But as for new reactors, we probably won't be able to import the first few ones for 4-5 years at least. A huge amount of investment will be needed to build new reactors.

In March 2006, Richard Boucher said that 90% of India's reactors would be placed under safeguards over a period of time. We're initially commiting to 14 out of 22 reactors under safeguards. As the calculation in that post indicates, to get to that 90% mark, we'll need to build or import 80-odd reactors.

The cost of a typical reactor is around $2000 per KW. India needs around 1000 GW by 2030. So we're talking of an investment of the order of hundreds of billions of US dollars, assuming that the target is to have 10% of power requirements met through nuclear energy. Private participation & investment is obviously needed. For that to happen, an effective regulatory environment that allows a fair return on investment is required (Nitin's words!).

There're some aspects of the deal that are still unclear though.

Firstly, what is the sequence of events? When does India need to publish the list of plants that will be placed under safeguards?

As for the fuel, it isn't as though Uranium, Thorium etc. are unlimited resources. They're certainly not replenishable. So you can't actually rely on them forever. Also, when they are fairly (or become) ubiquitous, naturally the usage (mining) increases significantly. But that also means that the resources will diminish more rapidly, which is a fairly vicious cycle (similar to coal), resulting in them becoming costlier.

From what I've read, electricity generated from nuclear reactors is around 20-30% cheaper compared to coal & 40-50% cheaper compared to gas based plants. But this needs to be offset with increasing technology (& fuel) costs. There are social costs too, as I pointed out regarding the water requirements for nuclear plants.

PS: With impeccable timing, the Governor General of New Zealand is visiting India this week. Time to read out the list of charges and the penalties, even if he's only a ceremonial head of state?

Ho ho. Australia's Foreign Minister is also visiting, as is China's Foreign Minister.

Labels: india, manmohan singh, nuclear, nuclear agreement, usa