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KUDANKULAM

Down To Earth • April 1-15, 201224

�C O V E R S T O R Y

KUDANKULAMMELTDOWNMELTDOWN

MELTDOWNMELTDOWN

Asure way of riling the peoplearound the KudankulamNuclear Power Project(KKNPP) is to ask why theylaunched their opposition tothe plant just months before

the first of its two reactors was set to go criti-cal. Surely they had seen the twin domes ofthe country’s largest nuclear plant rise slowlyfrom the scrubland close to the sea? The replycan range from a passionate cascade ofprotest to a more polite but scathing “wherewere you sister, all these years?”

These years have been long, stretching toa quarter century of protest. There have beenperiods of quiet and quite a few explosions(see ‘A 25-year campaign’) in a movementthat started as anti-war, anti-nuclearweapons protest in 1987 because the tradeunionists, left wing activists and intellectualsleading it were convinced that the powerplant was merely a conduit for piling up plu-tonium to make weapons. That belief hastaken root among some of the fisherfolk whohave been the backbone of the protest for twodecades. “Don’t ask us what we were doing allthese years,” says Xavierammal of pic-turesque Idinthakarai village, a couple ofkilometres down the coast from the brightyellow domes of KKNPP. She is a strappingwoman of 48 whose fisherman husband dieda long while ago, leaving her to bring up hertwo children on her own by rolling beedis.

“From Day One we were against theplant. When I was young I took part in the1989 rally in Kanyakumari to protect thefuture of my children. Our elders had warnedus about the dangers of nuclear energy. TheChernobyl accident had just taken place andthe same people (the Soviet Union) weregoing to set up a similar project in our midst.We were scared and angry,” says Xavier -

ammal who is now on a fast unto death, seeking the scrapping of KKNPP. It wouldseem a doomed undertaking with the state-owned Nuclear Power Corporation of IndiaLimited (NPCIL), which is setting up KKNPP

with Russian expertise and funding, resum-ing work under heavy police protection.

Contract workers, employees and scien-tific reinforcements from its other nuclearstations have been bused into the plant forthe first time since September last year whenthe protest by the People’s Movement Agai -nst Nuclear Energy (PMANE) caused high fis-sion and forced most staff to leave, leaving askeleton force to oversee maintenance. At thetime, KKNPP had about 150 Russians, 800 ofits own staff and around 4,000 contract work-ers. All of them will be back soon.

NPCIL chairperson and managing directorS K Jain says the corporation would soonapproach the Atomic Energy RegulatoryBoard (AERB) for permission to load fuel inthe first unit. Croatian experts are beingflown in to check the equipment and thereactor pressure vessel to see if they are ingood condition. There is talk of the first unitof the two 1,000 MWe VVER (light water)reactors going critical in just three months.

Is this the end of the road for the localresistance? Will the 45,000-odd people in the27 surrounding villages who have been mak-ing the headlines for eight months be forcedto call off their campaign of fasts and ralliesunder police pressure? An old war horse inthis campaign, Father Thomas Koc herry,who was earlier head of the NationalFishworkers’ Forum (NFF), says, “There is abig difference in Kudankulam area. Theestablishment cannot understand us. Herepeople are organised and determined. Theycan’t be stopped—unless you kill them.”

Kocherry, 74, a congregational priest at

C O V E R S T O R Y

April 1-15, 2012 • Down To Earth 25

The spectre of Fukushima continues to haunt the world, forcing governments in most parts of the globe to rethinktheir plans to tap this controversial source of energy. But it is in India that the world’s worst nuclear accident sinceChernobyl has had its most serious fallout, with public protests forcing the authorities to delay the commissioningof the ambitious Kudankulam project by almost a year. Fukushima, however, is just the latest spur for the campaignagainst the Kudankulam reactors which started in 1987, discovers LATHA JISHNU as she travels across the villagesof Tirunelveli district in Tamil Nadu and meets the people who have been saying no to nuclear energy for 25 years.

ARNAB PRATIM DUTTA and ANKUR PALIWAL study implications of Fukushima and the increasing cost ofnuclear energy across the world, and the rise of shale gas as an alternative

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Manavalakurchi, some 40 km from theepicentre of the struggle, ma kes regulartrips to Idinthakarai to shore up thespirit of the protestors. He took part inthe Save Water, Save Life march acrossthe nation which culminated inKanyakumari on May 1, 1989. “When itreached Kanyakumari it was an anti-nuclear protest against Kudan kulam.Police opened fire and injured seven,including a parish priest,” he recalls.

Talk to any fisherman along theTirunelveli coast and one begins to und -erstand what Kocherry is saying. Theseare hardy folk used to taking on theadministration, the police and the chu -rch. Declares Antony Ephraim Joseph,45, of Perumanal, a small village about 8km from KKNPP: “We will fight to theend. Let them kill all of us. We have hada tsunami here (2004) and several smalltremors recently.” Ironically, the tsuna-mi rehab colony abuts the wall of KKNPP!

Loss of livelihood is the most fright-ening spectre that haunts them. Theirtraditional fishing grounds, they fear,will be lost once the nuclear plant starts.“Even now guards shout at us. They takeaway our nets. Soon they will put a 3-km security cordon around the plant.We go fishing at odd hours, at dawn,late at night. What will we do then?”Joseph asks. There is another fear ontheir horizon: contamination—thatthey believe is inevitable—of their fish-ing grounds that will slowly kill marinelife and of the air. How do they knowthis for a fact? Joseph’s mate Jesu JohnGerald says tartly: “This is the age ofcomputer and TV. Thanks to (former

chief minister) Karunanidhi’s gift of freeTVs we know what’s going on.”

Fukushima was watched without abreak and also the talk shows thataccompanied broadcasts of the world’sworst nuclear accident after the Chern -obyl disaster of 1986. There is plenty tofuel nuclear fears—and it has galvanisedthe resistance that NPCIL believed haddied down. Some ideas are well entren -ched. Gerald, who took part in the Kan -yakumari rally as a teenager, is also con-vinced that nuclear energy comes withthe added threat of nuclear weapons.“Nuclear energy is a front for nuclearweapons,” he declares. That’s because inthe early days, those who organisedanti-nuclear meetings in the area camefrom socialist and far left parties whorallied the people on an anti-war andanti-weapons plank. Explains T S SMani, a former member of CPI-ML, whowas one of the earliest to join the cam-paign: “The initial mobilisation of thefishermen was by Anton Gomez whowas head of the Tamil Nadu FishWorkers’ Union. There was huge mobi -lisation of palmyra workers and otherlabourers in Tirunelveli and Tuticorindistricts and in Kanyakumari.”

Above, all there was Rev. Y David, aProtestant pastor who led the SocialEquality Movement and rallied thedowntrodden communities. The main-stream CPM and CPI were strongly infavour of the project (it was by theSoviet Union) and shored up theCongress project. The old stalwarts arenow scattered across Tamil Nadu butare still lending support to the campaign

in different ways. The core of the protestcomes from the close bonding of thefisherfolk through caste (Paravas) andreligion (Roman Catholic).

Martin, a fiery character fromIdinthakarai, has just sold the day’scatch of sardines worth `27,000. In theevening, he will deposit `2,700 (10 percent) with the struggle committee sinceit is Thursday when the weekly donationis made. Others like Xavierammal con-tribute `200 a month. This is apart fromthe contribution fisherfolk make to thevillage community for maintenance thatincludes upkeep of the parish house andother community facilities. The fisher-folk have done it for centuries, a practicethat is unique to the Tamil Nadu coast,and one that keeps the people andchurch together.

It is not surprising, therefore, thatnearby villages have evaded the tightpolice cordon around Idinthakarai, andhave come by the coast to make a con-tribution of `3 lakh on one day. Thecommunity kitchen in the struggle hubis feeding 5,000 people three times dailywhile they guard the 15 activists, led byPMANE convenor S P Udayakumar andits organising genius M Pushparayan,who are on a fast unto death. Foreignmoney or church money is clearly notneeded. Community collections havecrossed `30 lakh since the fasts began inAugust last year, and there is still a sub-stantial amount in the kitty after meet-ing all expenses of the movement, says aPMANE committee member.

“This is truly a people’s struggle andnot a Church-funded movement,”


C O V E R S T O R Y

1987 Soviet Unionannounces plan tobuild N-plant in India

Anton Gomez takeslead in building opin-ion against N-energy

1988Rajiv Gandhi and Mikhail Gorbachevsign pact on Kudankulam

Massive mobilisation in Tirunelveli,Tuticorin districts of fishermen,workers, social & political move-ments. Rev. Y David in forefront

1989Police fire onrally againstproject led byFatherThomasKocherry inKanyakumari

1998Russia, India signsupplementaryagreement onKudankulam

NAPM organisesworkshops againstN-power

1986Chernobyl disaster,world’s worstnuclear accident

A 25-year campaign

Udayakumar, himself a Hindu Nadar,tells Down To Earth just before thecrackdown started. There was a timewhen we did not have ̀ 1,000 to mobilisepeople for a strike. “Now it’s unbeliev-able. Not even in my wildest dreams didI think it would become such a massmovement,” says the PMANE leader whoteaches peace and conflict studies ininstitutions across the world. So howdid this happen? Fukushima, of course,and the hot run at KKNPP, he says. Whilethe overwhelming fear is about loss ofresources and livelihood, the hot runconducted by NPCIL made the threat to

life very real for the people, he explains.The hot run has become folklore.

Description of the terror that it createdvaries from village to village. Peoplespeak of a frightening noise and smokein the sky. But it is an event that did takeplace and one that NPCIL and theDepartment of Atomic Energy (DAE)rue—because it was conducted withoutinforming the people. The realisationthat the nuclear establishment has beenindifferent if not arrogant about peo-ple’s concerns comes in the belatedadmissions made by senior officials. Tostart with, the fact that nothing was

done to allay fears post-Fukushima.Admits S A Bhardwaj, director-techni-cal, NPCIL, in a March 10 press confer-ence: “Even nuclear experts were shakenby the Fukushima disaster. So if the gen-eral public or locals are asking ques-tions, their concerns are genuine and wehave to address them.” It is an admis-sion that comes too late; and if it is amessage of apology it has not reachedthe agitating villages. Fukushima, start-ing with initial dismissal of the serious-ness of the disaster by top officials of thenuclear establishment in India, appearsto be a nuclear accident that they prefer

C O V E R S T O R Y


2001Heads of NPCIL andAtomstroyexportsign final agreement

People’s movementcomes up with comprehensiveagenda

2003-06Fishermen andfarmers protest;water for plantis an issue

2007Public hearing forKKNPP units 3&4

Kudankulam villagejoins protest; hugeupsurge in campaign

2008-10KKNPP delayed byhold-up in Russiansupplies

Link up with similarprotests in Jaitapur

2011Fukushima disaster stunscoastal villages

Idinthakarai becomeshub; hunger strikesbegin. Tamil Nadu saysKKNPP cannot start tillpeople’s fears are allayed

2002Concrete poured forproject

S P Udayakumar returnsfrom US; takes overleadership along with

M Pushparayan

2012Jayalalithaa gives green signal toKKNPP

Idinthakarai under siege; largenumbers arrested in Kudankulam

NAPM - National Alliance of People’s Movement; KKNPP - Kudankulam Nuclear Power Project; NPCIL - Nuclear Power Corporation of I ndia Ltd

Even experts were shaken byFukushima. So people’s

concerns are genuine—S A Bhardwaj, director-technical, NPCIL

Xavierammal ofIdinthakaraitook part in the1989 anti-nuclear rally inKanyakumari

to gloss over. At the September 7 annu-al general meeting of NPCIL, the chair-person referred to the world’s secondworst disaster in the following terms:“During March 2011, a significant eventof fuel damage at an overseas plant wasreported as an aftermath of a naturalevent of extreme nature.” The F wordwas not mentioned at all.

But NPCIL has been forced toacknowledge the consequences of its hotrun at the first unit in August. A hot runentails heating the primary coolantwater to the reactor’s operating temper-ature of 280 degrees and above butoperating the systems with dummy fuel.Huge amounts of steam are injectedinto the system in a flushing out opera-tion and let out when the pressureincreases. Swapnesh Kumar Malhotra,head of the public awareness division ofDAE, admitted months later in an inter-view published online that they hadgoofed. “When these valves are openedthere is a loud, shrieking sound.Imagine a thousand pressure cookersblowing their whistles at the same time.Anybody would be petrified. We did notcommunicate this to the locals …”

Sometimes, those screaming valveswere opened during the night, too, star-tling villagers out of their sleep. Worstof all when people came to meet KKNPP

officials, they were not allowed to meetthem. This arrogance was probablyrooted in NPCIL’s desperation to get the2,000 MWe project running before theend of the 11th Plan ending March 2012to improve its dismal record: half a cen-tury after it began its programme thecountry has a total nuclear generating

capacity of just 4,780 MWe. KKNPP

would have increased this by nearly 50per cent. Besides, these would have beenNPCIL’s first large reactors. Its stable of20 plants consists primarily of 220 MWeunits (home grown, though) with a cou-ple 540 MWe plants.

But this haste has been NPCIL’sundoing. Apart from the hot run, therewas the announcement of an even morefrightening event: a mock drill for near-by residents as an emergency prepared-ness evacuation exercise. People wereasked to cover their noses and collect ata certain point for evacuation and col-lect iodine tablets and stay overnight at acamp 20 km away. That was the laststraw; people were convinced that theywould have to leave their homes perma-nently, says Father F Jeyakumar, parishpriest of Idinthakarai, where the lovely105-year-old Lady of Lourdes church isthe focal point of the struggle. Jeya -kumar was himself on a 12-day hungerstrike in August because he believes thelivelihood issue is “a just cause”. So isthe Church behind the PMANE cam-paign, nurturing it and funding it?Jeyakumar laughs. “We have to be withthe people or they will leave us. My pre-decessor was roughed up by the parish-ioners because he did not listen to them.He had to leave before his term ended.”

And there is a cautionary monu-ment just opposite the Lourdes Church:a small Ganesha temple built by the 25families who broke away from churchand became Hindus because they wereunhappy with the church. Reports haveit that Bishop Yvon Ambroise ofTuticorin was forced to come down to

the determined Idinthakarai parish ofhis diocese and back the anti-nuclearcampaign after a delegation met himand made their displeasure over the Ch -u rch’s neutral stand very clear. He camefor a day, sat with the people and offeredthem a glass of juice to break fast.

But it is not a protest of Catholicsalone, advocate S Sivasubramanian ofKudankulam village, just 2.3 km fromthe plant, who is a leader of PMANE, toldDown To Earth. That was three daysbefore he was arrested by the police, oneof the 185 picked on the morning ofMarch 19. “People in Kudankulam,mostly Hindus and some Muslims,joined the protest in 2007 after NPCIL’spromise to turn the area into mini-Singapore failed to materialise,” he says.The disillusionment was particularlybitter because few people had got jobs.

As the protest heads for a showdownwith the state, PMANE is emphasising thelack of safety at KKNPP (see next story‘Unanswered questions’). There is littlepolitical support for the anti-nuclearmovement barring from fringe partieslike Vaiko’s MDMK and Ramadoss’s PMK.Let down by the chief minister, whothey assumed would stand by them notleast because of their stridently anti-Karunanidhi stance, Idinthakarai ishoping for a political miracle to endtheir agony. That appears unlikely withthe Centre and the AIADMK on the sameside of the nuclear divide.

Read ‘Chronicles of Kudankulam’ and interview with S P Udayakumar and M Pushparayan onwww.downtoearth.org.in


Father Jeyakumar supports the ‘just cause’ of his flock; (Right) S P Udayakumar leads the protest movement

Reports have been piling up onthe safety and environmentalaspects of India’s most ambi-

tious nuclear project, the 2,000 MWeKudankulam Nuclear Power Project(KKNPP), in the wake of the protests thatlead to a stoppage of work on the twoRussian light water reactors. First, therewas the finding of the 15-member A E Muthunayagam Committee, set upby the Centre, which submitted itsreport in December 2011 and then thereport of the M R Srinivasan committee,a Tamil Nadu initiative that its chief mi -nister J Jayalalithaa said was necessary toallay “people’s fears”. While the firstreport has been put out by the NuclearPower Corporation of India Ltd (NPCIL),the report commissioned by TamilNadu is not yet in the public domain.

According to interviews given by theformer chairperson of Atomic EnergyCommission, there is no shadow ofFukushima over Kudankulam. Srini -vasan says he looked at issues like “defi-ciencies in safety at Fukushima reactor,geological factors (earthquakes, tsu -nami, etc) at Koodankulam” and cameto the conclusion that “a Fukushima

mishap will not happen here”. In sum, itappears to be an endorsement of theMuthunayagam report since Srini -vasan’s four-member team concludedthat the expert group “has answered all44 questions raised by protestors”.

M Pushparayan, leader of the Peo -ple’s Movement Against Nuclear Energy(PMANE), says this is expected since Srin -ivasan headed the site selection commit-tee and picked the location for KKNPP in1988. PMANE’s presentation on geo-graphical vulnerability was based on 47journal articles and seminar presenta-tions, and raised issues such as volcaniceruption near the reactor, Karst forma-tion during the past three years at threelocations within 25 km of KKNPP and thepotential for tsunami from slumps and

faults in and near the Gulf of Mannarapart from shoreline instability. It alsopointed to the possibility of dry intakedue to sea withdrawal observed insouthern Tamil Nadu coast since 2004.

In spite of the large number of stud-ies, “NPCIL has unfortunately not lookedinto any of these before or during theconstruction of the two 1,000 MWereactors,” says PMANE’s response to theExpert Group (EG) report. According tothe latter, however, none of the issues isserious. Referring to the main worry ofthe fisherfolk about contamination ofnatural resources, EG notes that theproject draws sea water from intakedykes for condenser cooling. To stop thefish from getting trapped, KKNPP uses “aunique fish protection system” thatstops fish from entering the bays andreturns them safely into the sea.

The other issue is the rise in sea wa -ter temperature and its implication formarine life, including fish and prawns.The approximate quantity of coolantwater that will be released is 70 tonnesper day with a maximum delta T of 7degree Celsius. “In fact the mixing willbe very fast due to wave action and otherwater currents.” As a result warm waterfrom condenser will be mixed instanta-neously and lead to “a possible reduc-tion of ambient sea water temperature”.

But PMANE says the dangers could beimmense when all six 1,000 MWe reac-tors begin operations. The discharge of7.2 billion litres of hot water into the seaevery day by each reactor could welldestroy the fish. Besides, there is thequestion of the chemical and radiologi-cal composition of effluents. “The EGprovides data which are gross underesti-mations and contradictory with theinformation provided by NEERI andNPCIL officials earlier,” it notes.

Another charge it makes is that theKKNPP reactors 1 and 2 violate the Ato -mic Energy Regulatory Board instruc-tions of 1998 that require two sources ofwater to ensure adequate water supplyin the event of a cooling loss accident,which it terms “the largest potential ha -zards of reactors”. Citing independentstudies, the collective says the depen-dence on desalinated water alone is asafety hazard. EG says the storage capac-ity in tanks is adequate for the reactorfor 10 days in case of power failure eventhough the regulatory requirement isseven days. The debate continues.


C O V E R S T O R Y

QUESTIONSThe report of the Central expert group has responded to concerns butactivists say it has sidestepped environmental issues

UNANSWERED

Fisherfolk’s main concern is thethreat to fish and prawns

from heating and contamination ofsea water by reactors’ effluents

political opposition and the public isbeginning to show. The Socialist Partyand the Green Party have vowed to closedown 24 of the 58 reactors in France by2024 if voted to power in the April 2012elections. Opinion polls conducted inNovember show 40 per cent of the Fre -nch are hesitant about nuclear energy,while 17 per cent are against it. If Francecrumbles, the repercussions will be feltin the rest of Europe. French companiesAreva and Electricite de France aremajor pro viders of nuclear equipmentand technology. Britain, Czech Repub -lic, Finland and the Netherlands havestrong nuclear links with France and arepursuing plans of increasing their shareof nuclear energy despite Fukushima.

Asia stays the courseWhile Europe is slowing down, Asia isracing ahead. China always stands outfrom the pack no matter what form ofenergy one talks about. In terms ofinstalled capacity, it has more windpower, coal-based power and morehydro electricity than any other coun-try. Now it plans to do the same withnuclear. China was reportedly aiming toproduce 200 GW by 2030. This is 20times more than its current capacity andabout the same amount of energy thatIndia consumes. But after Fukushima, ittemporarily suspended approval of newreactors. These new reactors needed tomeet the target are besides the 26 underconstruction and 51 approved. Given

the size of the Chinese power industry,nuclear share will remain tiny even afterthis capacity is added. China is trying acocktail of technologies; nuclear energyis not crucial for it.

Other Asian countries like SouthKorea and India will enter the nextround of nuclear expansion. SouthKorea currently generates 31 per cent ofits power from 21 reactors and standsfirm to push this to 59 per cent by 2030.Vietnam has ordered two Russian reac-tors. Thailand, which was in advancestages of planning a reactor, has post-poned it temporarily after Fukushima.

There is another reason—biggerthan Fukushima—countries are shyingaway from nuclear power. It is the cost.


Ayear ago, the triple meltdown atthe Daiichi power plant in Fuku -shima sent a chilling reminder of

Chernobyl. No matter how pro-nucleara country was, Fukushima could not beignored. The immediate reaction waspublic protests followed by safetyreviews of nuclear plants. Nuclear ener-gy came under a serious threat of beingsidetracked, albeit for a short period.

Japan, where nuclear poweraccounts for a fourth of the total energyproduction and which planned toincrease this share to a half by 2030,altered the future energy roadmap. Itnow plans to supplant its nuclear pro-gramme with renewables and has alsodisplayed intentions of using cheapimported gas for producing power.

Elsewhere, the impact of Fukushimavaried from negligible to noticeable. M V Ramana, professor working onnuclear energy and global security atPrinceton University in the US, sayscountries can be categorised into threegroups based on their government’sreaction. The first group includes thosecountries that have reiterated commit-ment to their nuclear plans with very lit-tle change. Their plans may be down-scaled because of delays resulting fromsafety reviews. Good examples are theUS and China, Ramana says. The secondgroup consists of countries that haveturned away from nuc lear power. Inmany cases, Fukushima only sealed anongoing process of gradual nuclearphase-out. This group inc ludes Ger -many, Switzerland and Vene zuela. Thethird group includes those that havetemporarily shelved their plans to “con-tinue with, expand, or enter into nuc learpower”, Ramana says. “They are beingheld back by public opinion.” Franceand Uruguay fall in this category.

Most of the 50-odd countries withnuclear power have adopted the logicthat a massive earthquake followed by

tsunami is an unlikely calamity to befallmost of the 453 reactors on the planet,argues Mark Hibbs, senior associatewith Carnegie’s Nuclear PolicyProgram, based in Germany, in a paperpublished earlier this year. These gov-ernments had deployed nuclear reactorsfor strategic reasons and have notveered off their plans. “Political leadersin these countries, despite populationssuddenly insecure and restive about nu -clear safety, won’t hastily foreclose fut -ure energy-generating options,” Hibbsreports. But he does notice that sinceMarch 2011 governments and industryfavouring nuclear power have not suc-ceeded in returning to business as usual.

‘World Energy Outlook 2011’, pub-lished by Paris-based InternationalEnergy Agency, estimates a more severe

impact. It says new regulatory measures,especially to safeguard nuclear reactorsfrom natural catastrophes, would delaycapacity addition and renewal of oldreactors. Nuclear power capacity couldfall from 393 gigawatt (GW) in 2010 to335 GW in 2035. At 2010 levels nuclearcommanded 13 per cent share of thetotal energy market. By 2035 this couldreduce to 7 per cent, the report says.

Europe slows downAfter Japan announced withdrawalfrom nuclear energy, Germany, whichsourced 23 per cent of its energy fromdomestic nuclear plants, decided toabandon nuclear energy. Earlier,

Germany was to become nuclear-free by2021, but in May last year it decided tobring the phase-out dates forward. Itwill, thus, become the largest bloc innuclear-friendly Europe to do awaywith nuclear energy. FollowingGermany are Belgium, Switzerland andItaly. Switzerland has set 2034 as theyear it will be free of nuclear power,while Italy in a referendum held in June2011 said no to using nuclear energy.

The remaining nuclear powers inEurope intend to split atoms to produceenergy, but the way forward could bearduous. France has been the biggestnuclear evangelist extracting 75-80 percent of its energy from nuclear fusion.But post Fukushima pressure from the


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Source: Nuclear Power in a Post-Fukushima World, Mycle Schneider et al; IAEA

Three Mile IslandMarch 28, 1979

Chernobyl April 26, 1986

Fukushima DIA-ICHIMarch 11, 2011

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FUKUSHIMA’SWhat the disaster did to nuclear ambitions

SHADOW

Generation ofnuclear power interawatt hours

Over 500150-50050-15010-50Less than 10

North America +0.6

World +0.7

South America -0.1

Africa +0.0

Eastern Europe +0.4

WesternEurope -0.3

Middle East &South Asia+4.7

East Asia+2.4

ANNUAL NUCLEAR GROWTHbetween 2000 and 2010 (in trillion Wh)

C O V E R S T O R Y

New regulatory measures, especially to safeguard reactors

from natural disasters, would delaycapacity addition and plant renewal

C O V E R S T O R Y

It was widely believed that the 21stcentury would belong to nuclearenergy. The industry had anticipated

that the third generation of nuclearreactors would be cheaper to build,superior in thermal efficiency and saferthan the second generation ones.Concerns of climate change and talks ofcarbon tax to fund greenhouse gasreduction technologies too leveragedhopes for this sector. Yet instead ofreducing, the cost has risen many times.

In the beginning of this century itwas forecast that with third generationtechnology, a nuclear power plant’sovernight cost—expense paid duringconstruction minus the interest onloan—would be about $1,000 per kWand a 1,000 MW plant would cost about$1 billion. The current overnight cost ofproducing a kW of electricity is between$4,000 and $5,000. If all costs areincluded and third generation technolo-gies, like AP1000 or EPR (European pres-surised reactor), are used producing akW could require up to $10,000.

MIT, which released a report in 2007,

estimated the cost of setting up a reactorat $4,000. The UK’s latest estimate—part of a report prepared by consultingfirm Mott Macdonald in 2010—is thatfirst-of-a-kind nuclear reactor couldcost $6,000 per kW. This would gradu-ally reduce to $4,500 per kW once tech-nology gains prominence and adequatenumbers are built, but this is unlikelybefore 2025. For first-of-a-kind 1,600MW EPR, the construction cost would beclose to $9.9 billion and for an AP1000 itwould be $7.4 billion. The same year,the Nuclear Energy Agency gave esti-mates of $1,600 to $5,900 per kW.

Take the case of the first two 1,600MW EPR. Their construction began inOlkiluoto, Finland, in 2005 and inFlamanville, France, in 2007. Both haveseen long delays and cost overruns. Itwas envisaged that Flamanville wouldbe built at €3.3 billion (1€=US $1.3) andcommissioned in 2011. The cost wasrevised in 2011 to €6 billion and thereactor will be ready only by 2016. Thecost of the Olki luoto plant was estimat-ed at €3.7 billion but has seen overrun ofanother €2.7 billion.

When Korea Electric Power Corpo -ration won a contract for four reactors

in UAE in 2010, it outbid Areva andWesting house’s Gen3 technologies. Thereported cost of the UAE reactors was$20 billion. Areva’s CEO Anne Lauver -geon said the reason her company lostthe contracts was additional safety fea-tures that increased cost by 15 per cent.Post 9/11, nuclear reactors have beendesi gned to withstand impacts by com-mercial jets. But even the Koreans havenot been able to control their budgets.Recent reports indicate the cost of thesereactors has increased by $10 billion.

China alone has managed to keepthe cost low. Chinese news reportsquote costs of about $1.8 billion forevery GW generated through EPR.Through AP1000 the rates are a bitsteeper but below $2.5 billion. ReasonsChinese have been able to keep costslow is tight scheduling—most plants areeither on time or ahead of deadlines—agood base of vendors for componentsand cheaper and more pliant workforce.But the big secret is state loans for mostprojects. This brings down the intereston loan. In 2010, China Daily reportedthe China National Nuclear Corpora -tion planned to invest close to $120 bil-lion in nuclear energy projects by 2020,and by 2015 its controlling stake inpower plants would be $75 billion.

The Chinese example is difficult toreplicate in the West. In 2008 and 2009,like UAE, South Africa and Canadarejected Gen3 reactors because of theexorbitant cost. Problem arises wheninvestors seek return guarantees, whichcan push the cost of capital sky high.

C O V E R S T O R Y

A BOMBMore than Fukushima, it is costoverruns that are impeding nuclearindustry

IT COSTS

Meter shows radiation in Fukushima during an anti-nuclear march in March 2012

REUTERS

The only country to keep costs lowis China. Its secret is state loans for

nuclear projects


Unlike in thermal power, financiershave little faith in nuclear plants andhence may charge higher interest.

Mycle Schneider and his team, in apaper on world nuclear energy pub-lished in 2011 by the Washington-basedWorldwatch Institute, argue the cost ofcapital is pivotal to nuclear reactor eco-nomics. “The capital cost depends inpart on the credit ratings of both thecountry and the power utility in ques-tion; countries with more stableeconomies tend to get lower interestrates, as do utilities that have sounderfinances.” There are other variables likewhether the utility seeking finances isthe only player in its area of opera-tion. Companies which have monopo-lies tend to get cheaper loans as increasein cost can be passed on to the con-sumer. British Energy, which owns eightnuclear plants in the UK, went bankruptin 2002 because it operated in a compet-itive market; the government bailed itout with £10 billion (US $15.9 billion).

Governments are trying to givefinancial support to nuclear projects, asguarantors or by using taxpayer’smoney. The Olkiluoto project has thebacking of the governments of bothFrance and Sweden, a co-builder. Thefirst two projects in the US—GeorgiaPower’s Vogtle project for twoWestinghouse AP1000s in Georgia, andMaryland-based Constellation Energy’sCalvert Cliffs project for an Areva EPR—have also got state guarantees. ForVogtle, the first nuclear plant to be builtin 30 years in the US, the estimated costfor two reactors is close to $14 billion, ofwhich $8.5 billion is covered under stateguarantees. Here the government hasgone a step ahead to use money gath-ered from electricity users in the statethrough a cess. That’s how the financialburden on Georgia Power for the tworeactors is only $6.5 billion.

There has been a call to use carbontax to fund nuclear energy. John Rowe,former CEO and chairperson of Exelon,the biggest nuclear energy producer inthe US, has said that about $100 pertonne carbon would be required fornuclear energy to break even. TheBritish government is considering imp -osing tax and preferential tariffs to bringnuclear on a par with renewable energy.

Nuclear energy has too many ifs andbuts. Small wonder power companiesare now flirting with shale gas.

C O V E R S T O R Y


Power companies, at least in theUS, have identified their next bigtarget: shale gas, or methane

trapped in clay and rock. Not only isshale gas cheap—about 30 times cheap-er than oil—the industry estimates thereare enough reserves in the US to last 100 years.

John Rowe, former chairperson ofenergy giant Exelon, admitted justbefore his retirement in December thatthe future of power generation lies inshale gas. Companies are increasinglylooking at natural gas—shale gas is cate-gorised as natural gas—for meetingelectricity demands. Between 2011 and2015, close to 260 plants can be built inthe US that will use natural gas as thefuel, according to government statistics.The share of shale in the total naturalgas production in the US in 2010 was 23per cent (5 trillion cubic feet or TCF), asper the US Energy InformationAdministration (EIA) data. By 2035, itmay go up to 49 per cent. The US isheavily banking on natural gas. Betweennow and 2035 the country will add 222GW of generation—a jump of 20 percent. Of this expansion, gas will accountfor 58 per cent. In comparison nuclearshare will be 4 per cent and coal willcontribute 8 per cent.

Low cost and mature technologymake shale more attractive thannuclear. Chandra S Rai of MewbourneSchool of Petroleum & GeologicalEngineering at University of Oklahomasays shale gas has brought down the costof producing electricity. Reported costof nuclear energy is between $6,000 and$8,000 a kW (International EnergyAgency maintains it is $5,300). For agas-based plant it is less than $1,000 perkW. Nuclear projects face long delays,especially for first-of-a-kind plants, butgas-based plants take not more than fiveyears to be commissioned because theyare based on matured technology.

Companies, which previouslyowned nuclear power plants, are slowly

shifting to gas. Virginia-basedDominion Resources Inc, which ownsseven nuclear power plants, constructedits first gas-based plant in May 2011. Itplans to make two more such plants.

Attractive as it is, shale gas faces cer-tain hiccups. W John Lee of HoustonUniversity says just because an area hasreserves does not mean all of it can becommercially extracted. In its 2011Annual Energy Outlook for the US, EIA

had estimated the total shale gas reser -ves in the country at 827 TCF, but hasrecently revised it to 482 TCF. MarcellusShale Fields, the largest in the US, wasinitially said to have about 410 TCF ofgas; the revised estimate is 141 TCF.

There is another cause for worry.

Recent studies show drilling shale gascan contaminate groundwater. Thedrilling process called hydro fractur-ing—shortened to hydrofracking—involves injecting a solution of mostlywater and sand, but also pesticides, sur-factants and benzene-based chemicalsinto shale formations. The USEnvironment Protection Agency hasblamed hydrofracking for polluting thegroundwater in Pavillion, Wyoming.

The agency’s study, released inNovember 2011, found high levels ofbenzene and petrochemical-basedproducts in the groundwater. It alsofound 2-butoxyethanol phosphate, phe-nols and naphthalene in the aquifers.Another study in early 2011 by DukeUniversity has also blamed the shale gasindustry for flammable levels ofmethane in aquifers. ■

SHALE IS THEBut the gas has its shortcomings

FUTURE

Low cost and mature technologymake shale gas more attractivethan nuclear energy, but it can

contaminate groundwater

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