Will nuclear power benefit the masses?

Addressing a large public rally -- hordes still turn out to gawk at her, marvelling at her high-pitched English and stilted Hindi, pallu firmly in place a la Mrs Indira Gandhi, Amma to millions south of the Vindhyas -- in Nellore last week, Congress President Sonia Gandhi made a solemn promise to the unwashed masses of India.

The surge in India's power production on account of nuclear reactors that will mushroom after the signing of the India-US civilian nuclear cooperation agreement, she said, will light up every home in every village. Actually, Ms Gandhi promised more than that: 'Our government has signed an international agreement that will enable more nuclear power plants to generate power. I am sure many of you are asking yourselves why this is so important. It is extremely important because as our economy grows, the demand for power would rise. We need power for our farms, hospitals, schools, factories and every home in every village.'

I am not too sure whether Ms Gandhi is right about the 123 Agreement having been signed, but given the prime minister's propensity to keep secrets from the very people whose destiny he presides over, and whom he tends to mislead ever so often through word and deed, one can never say for sure what exactly is the status of the nuclear deal. That apart, Ms Gandhi's speech at Nellore provides a clue to the Congress's main campaign issue in the next general election, which could be held any time between early winter and early spring next year, depending on whether the UPA government survives tomorrow's confidence vote.

The aam admi, the poor, the struggling, the impoverished masses living on the edge, we can now be sure, will be told that their lives will take a turn for the better with the signing of the nuclear deal which will enable the government to supply nuclear power to one and all.

Parched farms will become verdant as pumpsets energised by nuclear power will suck out water from the bowels of the earth; classrooms in schools without teachers, blackboards and drinking water facilities (children can relieve themselves in the fields, so toilets are unnecessary) will be well lit with nuclear power bringing alive fused bulbs; production at factories will double and treble as machines powered by nuclear energy work faster than workers can cope with and managers can keep track of; and, it shall be Diwali every night in wretched villages where power is now considered a luxury and dwellers of hovels still make do with oil lamps provided they can afford kerosene sold in the black market. India won't be shining; it will be glowing brighter than a thousand suns.

For a moment, let's believe that I am not being facetious and that Ms Gandhi's speech was written by someone higher in the food chain than a 'promotee' information officer of the Press Information Bureau. Can all this be achieved by signing the 123 Agreement? Will there be such a surge in our power generation capacity? The answers to these, and other related questions, lie in basic facts that have been swamped by needless propaganda of the 1960s and 1970s variety.

While the truth could have served the larger purpose of justifying the need for India to forge a strategic relationship with the US, bunkum is being resorted to to justify the prime minister's strange obsession with the nuclear deal and his sly efforts to foist an iniquitous agreement on the nation. Bogus claims are being made to fool the people into believing that a bright future awaits them, never mind the subjugation of India's strategic interests to those of America and the business interests of American firms.

So, here are some basic facts

that should help realise the stupendous folly into which we are being led by a prime minister desperate to keep his commitment to the Americans before both he and President George Bush demit office. The share of nuclear power from existing reactors in the power produced in our country today stands at 2.8 per cent. If new reactors are set up, and if they go critical without any time overrun, then this share will increase to at best eight per cent by 2020. This is inconsequential, given the rate at which demand for power is increasing by the day. Nor will an increase in the production of nuclear power decrease our demand for, and consumption of, oil -- in India, oil is not used for generating energy.

In other words, the money we will spend on acquiring nuclear power reactors will not be offset by savings in our oil import bill.

Which brings us to the cost of nuclear power. At present, power from existing nuclear reactors costs, after huge subsidies, between Rs 2.70 and Rs 2.80 per kWh. The coal-fired Sasan mega power project in Madhya Pradesh will be supplying power at Rs 1.196 per unit. The real cost of power from existing nuclear reactors is around Rs 4 per unit; the cost of power produced by new reactors will be around Rs 5.50 per unit.

Compare this to the real cost of power produced at thermal plants: Rs 2.50 per unit. What the UPA government, therefore, is seeking to achieve is to permanently raise the cost of power by leaps and bounds, a cost that will have to be paid by the masses whom Ms Gandhi addressed last week.

The story does not end here. We are being told that to cushion our energy needs from the volatile oil market, we need nuclear power. That's hogwash: Our power sector is not dependent on oil. But that's only one reason. The other reason why this argument does not hold is that the uranium market, monopolised by a clutch of suppliers and controlled by an even smaller group of countries, is as, if not more, volatile than the oil market.

The international spot price of uranium has risen at a rate faster than that of oil. A little known fact -- with hindsight deliberately suppressed by the government -- should help us understand just how volatile is the uranium market. Between 2005 (when the India-US nuclear deal was first proposed) and 2007 (when the 123 Agreement was finalised), the spot price of uranium has quadrupled. According to a June 2008 market assessment, a further 58 per cent increase is expected.

There is more to the story. And this is about who gains from the nuclear deal. American and French firms dealing with nuclear reactors and starved of orders -- no new reactor has been set up in the US in the last 35 years; the first new reactor in Europe is being set up in Finland after 17 years and has already run into a huge cost escalation of more than $2 billion -- are hoping to revive their fortunes by entering the Indian power sector. They are expecting business worth $100 billion over the next 20 years.

Since they will not be footing the bill, the government will have to either raise money from the market or pass on the buck to hapless consumers. With a fraction of this money, a lot more thermal, hydel and gas-fuelled power plants could have been set up to supply clean and affordable power to the people at less than half the cost of nuclear power.

Yet we are being told that nuclear power will benefit the masses. It is reminiscent of Marie Antoinette's suggestion that starving French peasants who couldn't afford bread could eat cake. Or, as a biographer has pointed out, what she really meant was they could eat 'crumbs from a bread pan'.

Kanchan Gupta is the Associate Editor, The Pioneer