In response to the Peaceful Nuclear Explosion in 1974 the Nuclear Supplier countries imposed a ban on the trading of nuclear material, equipments, and technology with India. The role of Nuclear Suppliers Group (NSG) which was set up in 1975 is to control the accessibility of nuclear exports and to make all the nuclear power countries the members of Non-Proliferation Treaty. Being a non-member of Nuclear Non-Proliferation Treaty (NPT) and Comprehensive Test Ban Treaty (CTBT), many NSG members felt that approving nuclear trade with India, a nuclear-armed country, would undermine global non-proliferation efforts and further legitimize nuclear weapons. India managed to operate its civilian and military reactors with the available uranium sources and heavily depended on the conventional sources for electricity generation. The NSG approval and the finalization of India-US Civilian Nuclear deal on October 11, 2008 for India’s formal entry into the nuclear fuel trade and technology cooperation also signifies the beginning of the country’s extended trade relations with the nuclear fuel and technology suppliers.
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Growing domestic demand for fuel and technology will necessitate India’s greater participation in global nuclear trade
India needs to meet the fuel demand of 20,000 MW of nuclear generated electricity by 2020. Current uranium supplies are not adequate to meet the demand. According to the Indian government, India’s electricity demand will increase at least at a rate of 6 to 8% annually till 2020. India’s current total annual uranium demand is approximately 500 metric tones. The two military reactors namely CIRUS and DHRUVA need about 50 metric tones annually and the remaining 450 metric tones are used by civilian reactors per year.
Estimated uranium mining has fallen to around 300 tones per year because of the poor planning in mining and milling sectors. At present India’s annual uranium production is 200 metric tones and the current functional reactors need a supply of 500 metric tones. Assuming that all the upcoming reactors (under construction, proposed and planned) would consume same quantity as the average of the existing plants, the total annual demand will reach about 800 metric tons of Uranium.
Due to the lack of sufficient fuel supply some of the reactors are currently running below capacity. Hence the coming years would witness a steady increase in uranium import to meet the domestic demand. This would also potentially open investment opportunity and entry possibilities for foreign firms in the mining sector, though India’s Foreign Investment Promotion Board has turned down certain proposals from private companies to engage in uranium investment in the country in the past.
By 2020, India’s demand for commercial energy is expected to increase more than 2.5 times. According to IEA primary energy demand in India would double by 2030, growing at an average of 3.6 percent per year. The country also aims to supply 25 percent of electricity from nuclear power by 2050. India’s nuclear program has proceeded largely without fuel or technological assistance from other countries. The capacity factors of the nuclear reactors have increased from 60 percent in 1990’s to 85 percent in 2001-02. India is making use of thorium resources as the nuclear fuel. A shortage of uranium fuel made the existing nuclear reactors run at partial capacity. Due to the shortage of domestic uranium, the reactors are producing less electricity and the new plants have been delayed. India possesses almost 25 percent of the world’s high quality thorium deposits and this is proposed as an alternative nuclear fuel. Currently the domestic nuclear power sector is managed by the government owned company, Nuclear Power Corporation of India Ltd (NPCIL), which is responsible for the design, construction, commissioning and operation of thermal nuclear power plants. It has 17 small and two mid-sized nuclear power reactors in commercial operation, six under construction - including two large ones and a fast breeder reactor, and more planned.
NSG waiver to boost trade and investment
The waiver would enable India to source nuclear fuel, reactors, equipment and technology from other potential nuclear suppliers, such as Russia, France and Canada. It is expected that the nuclear fuel, technology and related trade with India worth about $30 billion. This would pave the way for huge private investments from international companies enabling a large number of players in the Indian economy. Russia and India have finalized negotiations, for Russia to construct additional nuclear power plants in India. Russia is already building two 1,000 MW light-water nuclear power reactors in India under an agreement reached before 1998. France and India have signed a nuclear pact that will allow French companies to sell civilian nuclear technology to India. The NSG waiver has also opened up opportunities for domestic companies to make potential joint operation plans with overseas companies in power production, equipment manufacturing or other related fields.
AREVA's Transmission and Distribution division has won two contracts from National Thermal Power Ltd (NTPC), and POWERGRID in India. Areva will design, engineer, manufacture and supply a power transformer package to NTPC for its Indira Gandhi thermal power projects in Jhajjar. Under the contract signed with POWERGRID, AREVA will upgrade the Bihar sub-transmission systems by extending the existing substations and building additional 33kV bays. The Uranium Corp of India Ltd (UCIL) is launching work on uranium mine and mill in Tummalapalle village in Andhra Pradesh's Kadapa district.
Conclusion
Nuclear energy can play a significant role in India’s energy sector with the expected increase in nuclear electricity capacity and generation. The key areas that would require cooperation from overseas companies are infrastructure development, uranium fuel supply, technology transfer, and investment in all sub-sectors of the industry. In this context enabling India to open its trade relations with the global nuclear community would be a win-win situation, as it would help the growth of domestic nuclear industry and ensuring specific business opportunities to the investors. With the primary focus on technology and meeting fuel demand for electricity sector, global nuclear cooperation would significantly contribute to the country’s non-electricity sectors such as pharma, medicine, Power, Defence, IT and Insurance and agricultural research. Though the existing domestic legal framework allows only limited participation of the international companies in the domestic nuclear energy industry, the potential long term economic opportunities for the country would help overcome the legal hurdles. The development of the domestic nuclear industry, participation of the overseas companies and investment potential could also positively contribute to large scale employment creation in the country.
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