Endangering Our Citizens for Dodgy US Reactors
Prabir Purkayastha
RECENT press reports, e.g., Indian Express, May 19, indicate that the Modi government is moving towards changing Indian laws in atomic energy to help easier entry of US private capital in this sector. This is not only for the import of nuclear plants and machinery but also to take ownership of such plants. The two laws, according to the reports, are The Civil Liability for Nuclear Damage Act 2010 and The Atomic Energy Act 1962. This is in line with Nirmala Sitharaman's budget speech, which mentioned the entry of private players into nuclear energy, the use of Small Modular Reactors (SMRs) and the need to amend India's nuclear liability law. The Express report adds that we might also amend The Atomic Energy Act of 1962 to allow private players to enter this field and own nuclear plants.
The key question to be answered, apart from the amendment of the two laws, is whether the US has any special expertise in nuclear plants that we do not have. Are there advances in nuclear energy that the US companies have recently made that we are now aware of? If yes, there can be a case that we need their technology and, therefore, the need to weaken our liability laws. And allow even foreign ownership into this critical sector which till now has been the preserve of only the government. If not, then why these concessions to the US? India has paid a huge price in the Bhopal Gas disaster in allowing companies to set up hazardous industries without proper safeguards for the people. As the Chernobyl and Fukushima nuclear plant failures showed, nuclear plant accidents are not simply local disasters but have national and even international fallout. And its impact can last for a very long time indeed.
I will examine first question of whether the US nuclear industry has anything to offer to India? And if Small, Modular Reactors (SMRs) are being discussed as new technology and therefore the need to relax/weaken our nuclear liability regime, what do the US companies have that we don't? And who are the US companies for whose technology we are supposedly making these concessions?
The US has built and commissioned only three repeat three nuclear plants in the last 25 years. When the Watts Bar Unit 2 of Tennessee Valley Authority (TVA) was commissioned in 2016, it was the first nuclear reactor to do so after 20 years. Since then, two more reactors, Vogtle Unit I and Unit II in Georgia, US, have been commissioned in 2023 and 2024. Westinghouse designed the TVA Watts Bar – AP1000 – as well as the Vogtle I and II plants. All three are known as pressurised water reactors or PWRs. Westinghouse commissioned the Vogtle nuclear plant in Georgia, US, in 2023, taking them nearly 15 years to do so. The two Westinghouse units cost Georgia Power nearly $37 billion, more than twice that of the initial estimate.
South Carolina Electric and Gas had also started two Westinghouse AP1000 units – VC Summer nuclear plant – scheduled to become operational in 2020. The utility company abandoned the construction after spending more than $9 billion on construction costs. Due to these problems, Westinghouse went into Chapter 11 bankruptcy protection and emerged out of it in 2018.
To summarise, the hype and the promise of US companies on nuclear plant designs, the time required to complete the projects and the final cost were belied during construction. The price and time overruns were many times the initial estimate and the reason both companies entered extremely stormy waters, leading to their bankruptcies and takeover by others. GE Hitachi is essentially an acquisition by Hitachi of GE's nuclear division, while Canada's Brookfield Renewable Partners, who are one of the largest energy traders in North America, have acquired Westinghouse's nuclear division.
So the question is what do these American companies, even though they now may be owned by Japanese or Canadian, bring to the table? For us?
Let us take the case of SMRs, which are being hyped both by the US and the Indian government. The SMRs have not brought about any major change in technology. Even the few examples we have, show very similar problems to what the US suppliers of nuclear plants had shown earlier. A simple reduction in size and the promise of a large number of future plants will not lead to a drop in the costs of such plants. And the 300-500 MW plants are by no means small in power generation. In the past, the argument given was that scaling up the size of the plant would give such plants economies of scale. As the plant size becomes bigger, its cost would not scale linearly, and therefore, the cost per installed MW would decrease.
This is in general true for most industries, but did not work for the nuclear industry. As the US companies increased the size of the plants – going from 500 MW to 1600 MW, it led to far more complex designs, again increasing costs. It also increased the risk of accidents and catastrophic failures like Three Mile Island and Fukushima. As we know, nuclear accidents have huge costs, which, even after bankrupting the companies, still cover only a small fraction of the costs of the disaster.
As we have earlier noted, the cost and time over-runs for even the small, experimental SMRs show the same pattern of cost and time over-runs.
Who would bear the cost of nuclear accidents if we change our liability laws that have plant owners' as well as suppliers' liability? We know from the Bhopal Gas Disaster how much of the cost due to the release of Methyl Isocyanate gas was borne by the Government of India, the Madhya Pradesh government and the people of Bhopal. Only a small fraction of this cost was borne by Union Carbide. It is not surprising that suppliers of hazardous industries would like to limit their exposure to liability; just as it is in our interest not to allow them to do so.
The argument for India's changing its liability laws is that the nuclear suppliers are not willing to take the financial risk that their plants may pose to the people due to either faulty design or poor quality of components. That is why certain foreign suppliers argue that we need to modify our Liability Law so that the suppliers do not have liability for any equipment that they supply. They can then get away with supplying poor quality, substandard equipment and go scot-free, even if a nuclear plant fails catastrophically due to faulty equipment.
Let us look at the other issue in nuclear plants: who is installing how many plants and, therefore, has the engineering and manufacturing expertise to do so. And at what cost? In this, the US, the UK, and France, the three major western countries that are building nuclear plants, come off badly.
Let us look at the US nuclear industry. The total cost of the Vogtle plant, the last nuclear plant the US commissioned, was about $37 billion – or $10,784/KW – and its electricity generation cost per MWh is $170–$180/MWh. Compare this to the current capital cost per KW of wind and solar (PV) at about $1,500 to $2,000 and the cost per MWh for wind and solar at $27-92. According to Lazard, the levellised cost of electricity for solar with storage is between $29/MWh and $92/MWh, and on-shore wind with storage between $27/MWh to $73/MWh. This means that nuclear costs are twice that of the most expensive wind or solar power today. The French do not fare much better, and the UK no longer has the ability to build nuclear plants.
In India, China, South Korea and Russia, the nuclear industry did not go through what the US, UK and French companies have done. They still continue to build nuclear plants of various sizes, including India's indigenous nuclear plants. The last two units commissioned by Kakrapar Power Station are of 700 MW capacity. If the goal is to scale down plant size, there is no reason why 700 MW or 500 MW cannot be the standard size for such plants.
It is unlikely that the US companies have the expertise today to build new reactors, anything on the scale they did before. The so-called SMRs do not bring any new technology to the table that we can see, and is only a marketing gimmick to enter a market in which they have lost ground to India, South Korea, China and Russia. Why should we allow them to risk untested and unproven so-called SMRs when we have the indigenous capacity to build such reactors if we want? And also weaken our liability laws, taking the entire burden of any accident entirely on us? No supplier liability is what the US companies want, as they enjoy in the US, is playing with the lives of our people. And it is a measure no foreign company, Russia or the French, has ever asked us. Though the French reactor deal did not materialise, at no point did the French ask for no liability for the nuclear supplier.
Are we putting our people at risk only to placate the US? If we want to build smaller plants, the so-called small-modular reactors of 300-350 MW size, we need to find a concrete reason, not because the US wants us to buy a few reactors they think they can still manufacture.
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