INDIA'S SECRETARY FOR ATOMIC ENERGY DEFENDS NUCLEAR FUEL

UNCLAS SECTION 01 OF 04 MUMBAI 000341

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USDOE FOR SHANE JOHNSON, TOM CUTLER, AND COURTNEY GILLESPIE
STATE FOR EEB/ESC/IEC DAVID HENRY
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TAGS: ENRG TRGY BEXP EINV EFIN ECON PREL IN
SUBJECT: INDIA'S SECRETARY FOR ATOMIC ENERGY DEFENDS NUCLEAR FUEL
REPROCESSING AND RECYCLING AT SEMINAR IN MUMBAI

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Summary: 1. (U) In a recent speech in Mumbai, Anil Kakodkar,
Secretary of the Department of Atomic Energy and Chairman of the
Atomic Energy Commission, justified India's decision to
reprocess and re-cycle spent nuclear fuel at a seminar in
Mumbai. Using the twin arguments of climate change mitigation
and sustainability, Kakodkar advocated that nuclear energy
should constitute a prominent portion of India's total energy
mix, and that reprocessing technology to re-use spent nuclear
fuel was essential to unleashing the full potential of nuclear
energy. If India is not allowed to re-process spent nuclear
fuel from imported reactors, Kakodkar warned that 1.2 billion
tons of coal may have to be imported annually to cover India's
energy gap. Audience members expressed skepticism about
Kakodkar's calls for more nuclear energy, and extolled the
importance of renewable energy sources instead. Their fears and
comments, though in some cases misinformed, reveal that many in
India are more enthusiastic about the potential of
less-expensive and easier to deploy renewable energy options --
even if many of these plans remain on paper -- than nuclear
energy for India's future and the fight against climate change.
End Summary.



Per Capita Energy Consumption in India Inadequate and
Unsustainable

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2. (U) At an August 4 seminar in Mumbai, Anil Kakodkar, the
Secretary of the Department of Atomic Energy (DAE) and the
Chairman of the Atomic Energy Commission, argued that the
expansion of nuclear power production in India offered the best
opportunity to meet India's growing energy needs and to mitigate
carbon emissions-led climate change. Kakodkar predicted that
India's per capita energy consumption of 700 KWh per person per
year would grow tenfold in the coming decades, which domestic
energy resources were woefully inadequate to meet. He argued
that nuclear energy was non-polluting, sustainable, and released
more energy per kilogram of fuel than coal.




3. (U) In India, nuclear energy comprises three percent of total
energy generation capacity and is projected to account for 7
percent of the energy mix by 2020. DAE anticipates that nuclear
energy capacity in India could rise to 20 percent of the total
energy generation capacity by 2050 under the three-stage nuclear
energy program that includes the recycling of spent nuclear
fuel, compared to 16-17 percent of the total energy generation
capacity globally. Kakodkar conjectured that 3,000-4,000 new
reactors of varying capacities would have to be commissioned
across the world if nuclear energy was to constitute 50 percent
of the global total energy capacity. Due to sheer volumes, all
of these new reactors, both in India and abroad, would have to
be located near high population densities, and consequently,
would require more advanced safety features.



Private Participation Inevitable, but under NPCIL Control

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4. (U) Kakodkar acknowledged that India's sole nuclear energy
operator, the Nuclear Power Corporation of India (NPCIL),
although cash-rich, would not be able to independently finance
and develop the large number of reactors envisioned to ensure
energy security for India. The NPCIL would have to partner with
other Indian companies through joint ventures (JV),he admitted.
However, NPCIL would hold the majority stake in every JV at
least for some time, he said. Kakodkar pointed to the case of
the ill-fated Dabhol Power Project built by a consortium of U.S.
companies led by the Enron Corporation. He explained that a

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nuclear power plant, once commissioned, has to function even if
it is not producing energy; it cannot be closed or shut like
Dabhol was by Enron. For these reasons, he explained, a
partnership with NPCIL is in the best interests for the country.
The private sector should take advantage of the company's years
of experience and expertise of building India's nuclear energy
capacity. (Note: Kakodkar did not specify whether foreign
companies would be allowed to partner with NPCIL. However, even
foreign participation in nuclear energy generation does not
solve the larger problem of insufficient trained personnel to
operate the large number of reactors being planned, a problem
Indian nuclear energy planners have recognized. End Note).



Spent Fuel Reprocessing Only Sustainable Long-Term Alternative

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5. (U) Kakodkar pointed to a DAE study of India's energy
resources which estimated that domestic coal resources would
last for 130 years based on current energy consumption patterns.
Coal would last for barely 11 years at the energy consumption
level projected in 2050. Hydrocarbons would run out even
earlier, and uranium would also be radically depleted, he said.
Kakodkar noted that India's uranium reserves were limited and
inadequate to fuel the type of nuclear energy program envisioned
in the country. For this reason, he emphasized, India has
pursued a three stage nuclear energy program which involves the
reprocessing and recycling of spent nuclear fuel. Under this
program, nuclear fuel powering 10,000 MW of energy capacity can
theoretically be re-used multiple times to generate up to
200,000-500,000 MW of energy, he said.




6. (U) Kakodkar admitted that there are proliferation concerns
related to the reprocessing and recycling of nuclear fuel, but
argued that India's limited uranium reserves prevented the
country from accepting a policy of zero recycling of spent
nuclear fuel. He pointed to India's achievement in successfully
developing research-scale fast breeder reactor (FBR) technology
that marked the second stage of India's three stage nuclear
energy program. The third stage of the nuclear energy program
envisions unleashing huge quantities of energy through thorium
reactors. India has among the world's largest reserves of
thorium that, even at projected 2050 energy consumption levels,
is sufficient to last for two centuries.




7. (U) The DAE projects India's energy requirement to be around
1,300 GW by 2050, assuming a per capita consumption level of
5,000 KWh per person per year. According to the DAE study, the
country would face an energy deficit of 400 GW even after
tapping all conventional and renewable sources of energy,
including that unleashed from India's three stage indigenous
nuclear energy program. In 2050, bridging this deficit would
imply importing 1.2 billion tons of coal each year. Kakodkar
explained that the purpose of international civil nuclear
co-operation is "to take advantage of every possible
additionality over and above the domestic three stage nuclear
energy program." Imported nuclear reactors could help augment
the domestic nuclear energy capacity but will not alone bridge
the energy deficit. However, if imported reactors are included
in India's three stage program so that spent fuel from the
imported reactor could be re-cycled and reused in the FBRs, then
the additional energy unleashed could significantly narrow the
energy gap to 170 GW, Kakodkar maintained. This would decrease
annual imports of coal to 0.7 billion tons.




8. (U) The projected energy deficit could also be bridged
through energy imports. However, Kakodkar claimed that
importing energy resources, whether coal or uranium, requires

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huge sums of capital. On the other hand, he argued that the
three stage program would allow India to tap every available
indigenous energy source to meet its energy requirements rather
than rely on importing energy resources which will become more
scarce and valuable over time. For these reasons, Kakodkar
emphasized, India has to adopt a three stage nuclear energy
program which involves the reprocessing and recycling of spent
nuclear fuel for multiple re-use in nuclear reactors. This
would enable nuclear energy capacity to rise to 300 GW by 2050.
The nuclear energy mix would be comprised of indigenously
developed pressurized heavy water reactors (PHWRs) of 220 MW,
540 MW, and 700 MW capacities, boiling water reactors, imported
light water reactors (LWRs),and fast breeder reactors (FBRs).




9. (U) The DAE's vision is to construct four FBRs of 500 MW
capacity each by 2020. A prototype 500 MW FBR is currently
under construction and is expected to be commissioned by
end-2010. A critical facility of the third stage Advanced Heavy
Water Reactor (AHWR) was commissioned last year, and
construction of a prototype 300 MW AHWR will soon begin.
According to Kakodkar, the AHWR, which produces 68 percent of
its power from thorium, is being designed with a three day grace
period in case of a nuclear accident to enable the operator to
implement counter-measures. This is currently not available in
any nuclear reactor, he said. The design life of the AHWR is
planned for 100 years, well beyond the 60-year lifespan of other
reactors. (Note: U.S. reactors are licensed for 60 years, but
anticipated to have a longer, undefined lifespan. End Note).
Kakodkar acknowledged that the AHWRs were still "many years"
away from successful commercial-scale commissioning. He
explained that fissile material (uranium-233) inventory has to
be built in the second stage to enable the third stage of the
nuclear power program to take off.



India's Comparative Cost Advantage in Building Reactors Should
Translate to More Local Content for Imported Reactors

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10. (U) According to Kakodkar, Indian nuclear power facilities
measure more favorably in terms of cost as compared to
international nuclear energy facilities. Nuclear reactor
facilities can be constructed at a cost of $1,700 per KWh in
India, as compared to $2,000-2,500 per KWh internationally, and
can be built in the same amount of time, he claimed. Kakodkar
stressed India's relative cost competitiveness as the reason LWR
technology imported into India should use "progressively
localized content." Without tapping India's nuclear equipment
manufacturing supply chain, imported reactors will not be cost
competitive, he argued. The DAE is itself working towards
reducing the capital cost of FBRs to bring down cost, he added.




11. (U) Kakodkar also touted India's capability of building and
operating pressurized heavy water reactors (PHWRs) comparable to
international standards and said that the country was
considering exporting its new prototype 700 MW PHWR reactor once
it was successfully commissioned. Kakodkar also pointed to the
export opportunities for Indian service providers for equipment
supply and plant life service management to extend the life of
ageing nuclear power plants.



Audience Prefers Renewables To Nuclear Energy

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12. (U) In a question and answer session following the talk,

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audience members expressed skepticism over Kakodkar's plans, and
accused the DAE of emulating the U.S. energy landscape at the
expense of renewable energy solutions. Kakodkar stated that the
U.S.-India Civil Nuclear Energy Cooperation Agreement made it
possible for India to target an increasing share of nuclear
energy capacity in its total energy mix. Kakodkar agreed that
India had to make full and complete use of any and all renewable
energy solutions, but argued that renewable energy could account
only for a fraction of India's growing energy requirements. He
also addressed audience concern that technical or equipment
failures -- particularly from foreign companies -- could lead to
nuclear accidents by assuring that modern nuclear plants have
extensive safety features that would prevent a Chernobyl-like
event. He also explained that nuclear energy-fuelled
electricity was no different from coal-fired thermal power, and
residents therefore had no reason to fear radiation exposure
from electricity supply from nuclear power plants. Finally,
responding to accusations that India was emulating the U.S.,
Kakodkar pointed out that India (and the DAE) was an "ardent
custodian of the three stage nuclear energy program" which it
would have abandoned if it wanted to copy the U.S. He insisted
that the world would soon emulate India's approach based on
utilizing reprocessed fuel. France was already reprocessing
nuclear fuel and Russia was also considering the proposal, he
said. According to Kakodkar, even the U.S., which was initially
vehemently opposed to nuclear fuel reprocessing, may decide to
adopt this practice, which reduces the quantity of nuclear waste
and mitigates the problem of climate change.



Comment:

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13. (SBU) Kakodkar, the self-appointed guardian of India's three
stage nuclear energy program, used his speaking engagement as an
opportunity to push forward the case for reprocessing and
reusing domestic and imported nuclear fuel in both domestic and
imported reactors. He did not address India's hope to acquire
cutting edge enrichment and reprocessing (ENR) technology to
augment its indigenous technology. As with most other
Government of India-run research and development programs, the
expansion of nuclear energy capacity in India has been slow and
plodding. The DAE believes that a five-fold augmentation in
nuclear energy capacity in another 10-odd years is possible now
that the country has access to hitherto-denied imported nuclear
fuel and reactors. However, given the slow pace of nuclear
energy development and government's monopoly over nuclear energy
research and operations, it is doubtful that the DAE's ambitious
nuclear energy expansion program will proceed as projected. As
more coal plants come on line, India would have to develop
nuclear power plants at a rate far exceeding any past
performance to meet its 7 percent goal by 2020, unlikely with
the government's existing monopoly and steep learning curve for
private sector participation, not to mention the inevitable and
unexpected regulatory and political hurdles. Moreover, his
well-articulated arguments failed to resound with a prominent,
mainly non-technical audience, who, apart from his colleagues at
DAE and NPCIL, comprised of businessmen, academics, journalists,
and NGOs, skeptical of the potential for nuclear power
development in India, where a passion for renewable energy has
taken hold. For them, renewable energy rather than nuclear
energy remains a more attractive solution to energy security and
climate change in India. End Comment.
FOLMSBEE