Energy Business

Rising Protests Unsettle India's Nuclear Energy Expansion Plans

International nuclear energy firms have fanned out across the globe since the 11 March Fukushima nuclear accident in Japan to drum up new business, with two of their most lucrative potential markets being the rising BRIC economic powerhouses, Brazil and India.

Brazil, which currently produces 3% of its electricity, about 2,000 megawatts, from the two Angra 1 and Angra 2 nuclear reactors near Rio de Janeiro, last year told the International Atomic Energy Agency that it will build an additional eight nuclear power plants in addition to the $5.6 billion Angra 3 station under construction and scheduled to come online in 2015, in order to meet skyrocketing demand for electricity.

Similarly, India is now pressing forward with plans to build six new reactors in the near future as part of an ambitious scheme to see nuclear power providing 25% of the country’s energy needs by 2050.

Brazil’s and India’s embrace of nuclear power contrasts with established European nuclear attitudes following Fukushima, as on 30 May German Chancellor Angela Merkel announced that Germany would close all of its 18 nuclear power plants between 2015 and 2022.

Switzerland, Belgium and Italy have also announced their abandonment of nuclear power plant projects.

But it is in rising BRIC economic superpower India that the future of nuclear power have its severest post-Fukushima test, as current and proposed nuclear power plant facilities come up against growing public resistance in the world’s largest democracy.

Undeterred by such negative news, Indian analysts expect that at next month’s Russia-India Summit in Moscow, Indian Prime Minister Manmohan Singh and Russian Federation President Dmitri Medvedev will conclude commercial contracts for Russia’s Atomsexport to construct an additional two reactors in India.

The facilities would complement India’s currently operating 20 nuclear power plants. New Delhi intends to quadruple its present 4,780 megawatts of nuclear power generation to 20,000 megawatts within a decade to fuel the rising energy demands of a booming economy.

But Prime Minister Singh has already had a foretaste of public opposition to the country expanding its nuclear power base in the form of southern India’s Kudankulam Nuclear Power Project in Tamil Nadu, which even predates the 1991 collapse of the USSR.

In November 1988, Indian Prime Minister Rajiv Gandhi and Soviet General Secretary Mikhail Gorbachev signed an Inter-Governmental Agreement on constructing Kudankulam, but the project was mothballed for years following the implosion of the Soviet Union.

While the $2.5 billion Kudankulam facility is now under construction and nearing completion, it has not been without controversy, generating growing protests from local residents. If plans for the Kudankulam nuclear power complex ever come to fruition, then the facility eventually will contain six 1,200 megawatt and two 1,000 megawatt reactors. Kudankulam’s first reactor is expected to go online next month.

In a major government PR campaign to burnish the image of Kudankulam, India’s former President, A. P. J. Abdul Kalam, the father of India’s missile program, on 6 November visited the site and declared, “I went to the plant as an individual. It really is a modern plant, and there are 2,000 megawatts ready to be pumped into the grid. Solar power is clean energy, nuclear power is clean energy and hydroelectric power is clean energy.” Kalam added that he was “completely satisfied and happy with the sophisticated safety features of the reactors.”

But local protests against the facility have been on the rise since September, as local Christian fishermen communities express their fears and undertake civil disobedience, including 1,000s blocking roads and a number of protestors undertaking hunger strikes, giving the central authorities in New Delhi a major public relations headache. More worryingly, the villagers are backed by the newly elected Tamil Nadu state government.

The stakes are immense, with implications extending far beyond India. Besides Rosatom, major global nuclear power companies such as the U.S. firms General Electric, Westinghouse and Bechtel and with France’s Areva and Japan’s Toshiba, Hitachi and Mitsubishi firms have all eyed India since Washington in 2008 ended its prohibition on nuclear technology transfer to India as a potentially vast and profitable new market.

Nor are the Kudankulam protests New Delhi’s only headache. In Maharashtra, locals are demonstrating against the proposed 9,900 megawatt Jaitapur Nuclear Power Plant. Even worse, even the costs of such projects are coming under scrutiny, as thoughtful Indian columnists are now questioning the need for foreign reactors that are four times more expensive than indigenous ones.

A. Gopalkrishnan, former chairman of the Atomic Energy Regulatory Board, summed up the government’s failure to assuage the public’s concerns up to now by saying, “When questions are not answered, people get desperate and protest, suspecting that the entire nuclear sector is corrupt. Treating civilian nuclear energy under the Official Secrets Act is unnecessary. The department must realize that people are not village fools. If it continues this way, the sector is in for deep trouble.”

As a democracy, India’s officials must take account of public opinion, however uninformed they find it and a brake on the country’s vaunting financial future.

And in the meantime, Rosatom, General Electric, Westinghouse, Bechtel, Areva, Toshiba, Hitachi and Mitsubishi are watching the outcome of “people power” versus central authority with more than passing interest.

By John C.K. Daly of http://oilprice.com, exclusive to 24/7 Wall St.