Friday, October 12, 2007

“THE 123 PACT AND BEYOND: IS INDIA DOING ENOUGH FOR ITS FUTURE ENERGY NEEDS”

Russian fuel for Tarapur (Nuclear Power Plant) ruled out
…….The Hindu, December 6, 2004

Thermal plants' coal shortage worsening
…… ..Business Line, April 04, 2005

The message these news paper headlines convey is very clear, on energy security front we are not self reliant and in recent time have faced lots of challenges.

Recent years have been the story of turnaround of Indian economy. After decades of being shackled by the so-called 'Hindu rate of growth' - well below five percent - the Indian economy has soared at an average rate of around seven percent every year in the last 7 years and at around nine percent in the past three years. Today we want to see India as a developed nation by year 2020. For that to happen India will have to grow at 9% plus growth rate in years to come on sustainable basis. But will it happen? Have we done all the ground work for this to happen?

Facing problems at energy security front does not give encouraging signals for future. The growth rate of 9% plus can be sustained for a long time only when there is matching growth in the availability of energy.

Recent Indo-USA 123 Agreement can be seen as one forward looking step from the government of India side to address the issue. Nuclear power for civil use is well established in India. Its civil nuclear strategy has been directed towards complete independence in the nuclear fuel cycle, necessary because it is excluded from the 1970 Nuclear Non-Proliferation Treaty (NPT) due to it acquiring nuclear weapons capability after 1970. (Those five countries doing so before 1970 were accorded the status of Nuclear Weapons States under the NPT.)

As a result, India's nuclear power program proceeds largely without fuel or technological assistance from other countries .Its power reactors to the mid 1990s had some of the world's lowest capacity factors, reflecting the technical difficulties of the country's isolation, but rose impressively from 60% in 1995 to 85% in 2001-02. Today to achieve targeted 9% plus growth India needs technological collaboration to set more and more reactors and ensure continuous supply of uranium, whose reserves are limited in the country. Though we have enough of thorium, but alternative technology is not operational as yet.

Under Section 123 of Henary J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, USA has entered into a civil nuclear cooperation agreement with India. Under the agreement USA will take case of India before Nuclear Supply Group (NSG) and ask its members to cooperate with India in its civil nuclear program. Thus it will help India to overcome shortage of nuclear fuel and speed up civil nuclear energy program.

Thus after the successful implementation of the 123 agreement with USA and getting relaxations from NSG, India with support of countries like France, Russia, U.K. which have shown interest in Indian Civil Nuclear program and other countries like Australia, Japan whom India is trying to convince, can achieve the target of 40,000MW of nuclear energy by 2020.

India has large reserves of thorium, which is another source of generating nuclear power. India is already working on technology to convert thorium to generate electricity with the help of Fast Breeder Reactors. BARC's Fast Thorium Breeder Reactor (FTBR) is claimed to be the first design that truly exploits the concept of 'breeding' in a reactor that uses thorium. The handful of fast breeder reactors (FBRs) in the world today - including the one India is building in Kalpakkam near Chennai - use plutonium as fuel. As India does not have sufficient uranium to build enough thermal reactors to produce the plutonium needed for more Fast Breeder Reactors (FBRs) of the Kalpakkam type. The India-US civilian nuclear deal is expected to enable India import uranium and reprocess spent fuel to recover plutonium for its FBRs.

In addition to nuclear energy, government has also come up with idea of coal based Ultra Mega Power Plants each of capacity of 4000 MW. Till date government has identified 9 sites out of which four sites have already been awarded to private companies. This attempt will go a long way in ensuring ‘electricity for all’.

70% of oil bill of ours is due to import. To overcome the problems related with fluctuation in crude oil prices around the world, which has become a major issue due to instability in Middle East, India has joined the global scramble for oil and natural gas. Through diplomatic maneuvers aimed at securing overseas crude oil and natural gas production deals, India is seeking to lay claim to a larger share of the world’s energy resources. ONGC Videsh’s effort in getting overseas assets which includes investment of US$ 1.7 billion investment in the Sakhalin oil fields of Russia and the securing of a 25% share in the renowned GNOP fields of Sudan via a one-time investment of US$ 690 million. Joint venture of ONGC and L.N. Mittal group is another step in the same direction.

On diplomatic level India is also trying to enter into long term agreements with other countries in field of supplying oil and natural gas. Recently Gas-starved India has received an offer from the government of Oman where Oman wants to provide India natural gas in exchange for a steady supply of coal. The government has shown great interest in this.

Wind energy, tidal energy, Ocean Thermal Energy Conversion (OTEC), geothermal energy etc is the renewable forms of energy. Ministry of New and Renewable Energy (MNRE), Govt. of India is an independent Ministry exclusively for renewable energy sources.

Country has large potential of wind energy and OTEC. Infact as on March 31st, 2007 India has installed capacity of wind energy is 7093MW, which is fourth largest in world. The world's first ocean thermal energy conversion facility has been commissioned off the west coast of India. The 1 MW plant is housed on a 65 m barge anchored off the port of Tuticorin. National Institute of Ocean Technology has predicted potential of 180,000 MW of OTEC energy along coasts is India.

Thus, attempts of government in ensuring energy security are multidimensional. All possible areas are being looked into in and efforts are being made. Whether we will achieve energy security in future? If achieved, then at what cost and after how many years? These questions are difficult to answer at the present moment. But one thing is sure country does not have any other option. Country has not only to support second largest population which by 2050 will become world’s largest but has also have to become a developed nation, a superpower to reckon with.

Contemplated & Written by: Anurag Sexena, MHROD (batch of 2008), Delhi School of Economics, Delhi University.

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