Key policy changes needed to free India’s n-power business

September 12th, 2008 - 12:29 pm ICT by IANS  

New Delhi, Sep 12 (IANS) India Inc. may be gung ho over the country joining the nuclear club but experts say some key policy issues need to be addressed before domestic firms can get into the atomic power business, seen as a $40 billion investment potential.The law that currently governs nuclear power generation in India, the Atomic Energy Act of 1962, does not allow private participation in nuclear power generation. But the government has announced that the act will be amended to accommodate private players.

“Till now, no private party was able to do nuclear trade and commerce. Now whatever amendments are required in the law will be done to allow them do nuclear trade,” Science and Technology Minister Kapil Sibal told reporters.

“Apart from amending the Atomic Energy Act of 1962, the government will have to also decide on fuel cycle and nuclear liability issues,” said Sharaf Ali Bohra, an expert in atomic energy and an adviser to the Mumbai-based energy major Tata Power.

According to the website of the nuclear professionals’ lobby World Nuclear Association, the various activities associated with the production of electricity from nuclear reactions are referred to collectively as the nuclear fuel cycle.

The nuclear fuel cycle starts with the mining of uranium and ends with the disposal of nuclear waste. With the reprocessing of used fuel for reuse as fuel to generate nuclear energy, the stages form a true cycle.

The processing of mined uranium to convert it into fuel for nuclear reactors or power generators is called front-end fuel cycle activity.

The reprocessing of spent fuel after use in nuclear reactors to reconvert it into nuclear fuel to complete the fuel cycle is called back-end activity.

Countries around the world follow two types of fuel cycle policies - open or closed.

The US, Canada, Spain and a few other countries follow an open fuel cycle policy where private sector or public sector entities use the fuel for power generation once and then send it to government designated repositories for storage and subsequent reprocessing at a later stage.

Thus, private companies in these open cycle countries are allowed only front-end activities and power generation. They are not allowed back-end fuel reprocessing activities.

India, Britain, Japan, France, Russia and a few other countries, however, follow a closed fuel cycle policy. That means the spent fuel is reprocessed by the power generating agencies themselves for reuse again as fuel for power generation.

Companies in these closed cycle countries are, therefore, allowed both front end and back end activities.

Nuclear power generation technologies, therefore, differ according to whatever fuel cycle policy the country of origin of the technology concerned follows.

“What policy India will adopt if the private sector is allowed entry is also linked to the issue of nuclear liability, that is, who will reprocess the spent fuel - the private companies or the government,” Bohra told IANS.

The governments of US and other open cycle countries take responsibility for nuclear liability - the respective governments take back the spent fuel and either store it or reprocess it.

The US says that this is done to avoid nuclear proliferation as private sector entities can sell off nuclear fissile material to unauthorized agencies through the back door.

India follows a closed fuel cycle policy as it has no private entities generating power. The state-owned Nuclear Power Corporation of India Ltd (NPCIL) is currently the only company that produces atomic power.

NPCIL has developed reprocessing technology to convert spent fuel back into usable fuel. Reactors that use reprocessed spent fuel are called fast breeder reactors.

India is currently developing technology that will reprocess even this second time used fuel by combining the spent fuel with thorium to reprocess and convert it back to usable fuel for nuclear power generation.

The spent fuel that will emerge after second time use will be much safer than the spent fuel that now emerges from open cycle technologies or fast breeder technologies. Managing it also will, therefore, be much easier.

The objective of India’s closed fuel cycle policy is to ensure long-term energy security as India has abundant thorium reserves. Also third stage technology will be much safer from the waste management aspect as well.

To come back to the issue of private sector entry into atomic power, the government will have to spell out whether it will allow private entities to enter back end activities.

This will then require special safeguard measures to stop back door proliferation and ensure safety in nuclear waste management.

On the other hand, the government may allow private sector entities only front end activities as in the US.

The government may also allow limited entry to the private sector by declaring that private entities have to go into joint ventures with state-owned companies for atomic energy business.

At present, there is little clarity on these issues except that everyone knows that laws, rules and procedures will have to be changed, industry experts said.

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