Thursday, February 23, 2006

The Energy Matrix: Or why India needs to move now to secure its future.

The article was published in The Hindustan Times Jan. 24, 2006

‘There is a tide in the affairs of men,’ goes an overused Shakespeare phrase, “Which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life/ Is bound in shallows and in miseries.” Substitute ‘men’ with ‘nations’ and you have a rough idea about India’s situation. The rising tide is manifest in the parade of world leaders through our capital, the steady flow of foreign investment, and high economic growth. So it is in the increasing weight given to what India has to say about Iran’s

nuclear cheating, the welcome we receive in Asian forums, or in the WTO. Yet, some in India remain determined to keep hundreds of millions bound in ‘shallows and miseries’. They look at every opportunity as a pitfall, and every putative friend as an enemy and are clearly unwilling to take India’s good fortune ‘at the flood’.

No opportunity lasts forever. Our youthful demographic profile will inevitably grey, and unreformed, our educational system will not be able to meet any increased, or high-end, demand in information technology. But perhaps the biggest failure lies in our inability to move in just one area —energy. This, where all our hopes of revolutionising our agriculture and manufacturing will crash along with the aspirations of hundreds of millions of Indians who live in villages trying to eke out a living from marginal lands.

These dark forebodings come to mind when we look at the hand-wringing over the July 18, 2005, India-US nuclear deal. The recent round of talks between Foreign Secretary Shyam Saran and US Undersecretary Nicholas Burns, the comments appearing in the media, seem to suggest that India is finding it difficult to come up with a plan to separate its civil and military nuclear facilities that would be credible enough for the US and its Nuclear Supplier Group partners.

This is surprising. The terms of the deal are generous, and India’s needs are evident, and they are time-bound. As the mid-term appraisal of the 10th Five Year Plan brought out, “Given the limited indigenous uranium resources, India must seek at least 20,000 Mwe of additional nuclear power capacity on a turnkey basis… Alternatively, India must seek nuclear fuel on competitive terms for a similar level capacity to be built by NPCIL in the next 12-15 years.” A former Department of Atomic Energy scientist writing on the eve of the Washington visit, too, observed that the DAE was “beginning to face a serious shortage of natural uranium, even to fuel the 18 PWHR currently under operation or construction”. These, note, are Indian assessments, made by Indian specialists.

Neither of the two options — getting reactors turnkey or importing nuclear fuel — are available without the successful conclusion of the deal with the US, and by extension, the Nuclear Suppliers Group. In 2001, the Russians agreed to supply India nuclear fuel for Tarapur, as well as two 1,000 MW power plants at Koodankulam, Tamil Nadu. But by 2004, they made it clear that they would not be able to provide any more fuel or reactors until India made a deal with the NSG. This is broadly the same message India has got from the French, the British, or whoever else we have approached. Fuel, or reactors — India must work out an acceptable arrangement.

The key aspect of India’s requirement is the status to be given to its nuclear programme. Under the deal, India, which is viewed as a nuclear outlaw, is being offered a special status in the world nuclear order. This is based on the Non-Proliferation Treaty which divides the world into nuclear haves — those who tested weapons before January 1, 1967, and the ‘have nots’ — those who did not conduct tests, or did so later. The treaty’s guardian is the International Atomic Energy Agency in Vienna that ensures that the non-nuclear States’ activities are within the terms of the treaty. The NSG is a cartel that blocks trade with countries that have not signed the NPT and regulates it with those that have. India has not signed the NPT, though it is a member of the IAEA.

The July 18 deal cannot turn the clock back, but it does the next best thing — make an agreement that will let India keep nuclear weapons, even while permitting it to access technology and materials that have been unavailable till now. In exchange, India must separate its military and civil programme in a phased manner, and place the latter under IAEA safeguards. The deal says nothing about the military part of our programme. The government intends to keep a certain number of facilities in the military list to build and service our arsenal whose intended size remains a secret.

Neither the US nor the NSG needs to offer such a deal to India. They gain nothing in either technology or nuclear resources. There could be some profit in selling reactors to India. But by itself it has not been a consideration. Instead, they will modify their increasingly tough rules to favour India, even while agreeing to accept India’s possession of nuclear weapons. All they want is a credible list of facilities India will put under safeguards so as to make some genuflection to the principle of non-proliferation.

According to reports, the sticking point appears to be India’s reluctance to put its prototype fast breeder reactor into the safeguards regime as well. At first sight this seems odd since there is no indication that India wants to use the fast breeder for any other than civilian use. The logic of the fast breeder reactor programme is linked to India’s desire to exploit its vast thorium resources. But if the India-US deal makes it easy to import nuclear fuel for safeguarded reactors, the fast breeder should not have the salience it is appearing to have in the minds of many in the DAE.

In any case, the agreement calls for India to separate the civil and military programmes “in a phased manner”. So there is no reason why we cannot give a commitment, even while holding back the actual safeguards agreement till the reactor actually gets going, which will be years from now. In this period, we will know whether the US is keeping its side of the deal. And if it doesn’t, we need not walk that last mile.

To us it seems that many critics of the proposed arrangement are looking at it in a static framework. The three-stage Indian nuclear power programme was conceived in the Fifties. A lot has changed since then. While the logic of India’s quest for a thorium-based reactor remains sound, the circumstances in which it can pursue this programme have changed. They have gone through a cycle of nuclear programmes being country-specific, secretive processes to one where countries trade in materials, technology and R&D. India is being offered a chance to join that stream as well. And if its advanced thorium-uranium reactor is as good as our scientists say it will be, we can contribute in a meaningful way to the Generation IV forum of countries seeking innovative nuclear energy solutions.

There was one way of looking at nuclear power just a couple of years ago when oil was $ 4 a barrel. In the era of $ 60-plus oil and global warming, the mood has changed. Nuclear power is now being seen for what it is: a source of abundant clean energy. Even today, in countries like the US, nuclear power constitutes 20 per cent of its energy mix. India is a long way from there. And unless it is able to quickly wrap up the nuclear deal, it will not be going anywhere.

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