Nuclear Energy’s Cost-Benefit Analysis for India: Shankar Sharma’s Letter to the CAG


The Comptroller & Auditor General Of India
Pocket – 9, Deen Dayal Upadhaya Marg
New Delhi – 110124

Dated, 28th March 2019

Dear Sir,

Subject: The need for auditing of the procurement process followed in the case of nuclear power reactors for the country

Greetings from Sagar, Western Ghats, Karnataka.

This has reference to a letter of date 13.1.2019 by Dr. EAS Sarma, Former Secretary to GOI, addressed to you (and as appeared in the webpage – on the issue of procuring nuclear reactors for Jaitapur nuclear power project in Maharashtra, and the associated serious safety concerns of nuclear reactors.

I fully endorse the views of Dr. Sarma over the issue of the critical need for a diligent audit by CAG on this issue.

Whereas Dr. Sarma has focused on the procedural issues indicating the lack of transparency in this deal with France, my serious concerns are on many other associated aspects of nuclear power projects for the whole country. While there are legitimate concerns on the procedural issues followed/ignored in the case of imported reactors, the massive investment in all types of nuclear reactors in our country, including the domestic technologies, running to many hundreds and thousands of crores of Rupees in individual projects, should have raised very many questions of great concern not only to the present generation but also for the future generations. But sadly, there seems no rational debate at any level of our society, including among the honorable members of the Parliament, on such an issue of long term importance. There seems no discussion even among political parties or within elite public institutions.

Please permit me to elaborate further. I am an electrical engineer and a power sector professional with over 38 years of experience in different segments of electricity industry in India, New Zealand and Australia. Since 2004, I am associating myself with many civil society organizations to study the social, economic and environmental aspects of nuclear power plants w.r.t the deleterious impacts on our communities.

India has embarked on plans for a massive addition to its nuclear power capacity. The Parliament was informed by the concerned minister on 3rd January 2019 that 21 nuclear power reactors, with a total installed capacity of 15,700 MW was under implementation, envisaged for progressive completion by the year 2031. Whereas it looks unrealistic to plan to add 15,700 MW of nuclear power in the next 12 years as against 6,780 MW which was actually added in the last 60 odd years, what is even more astounding is the plan to take India’s total nuclear power capacity to 250,000 MW by 2075, as per an official plan by the department of atomic energy (DAE).

At a projected cost in the range of about Rs. 30 – 40 crores per MW of installed capacity, the planned additional capacity of 15,700 MW may entail a capital expenditure in the range of about Rs. 471,000 – 628,000 crores in the next 12 years. The long term expenditure planned for 250,000 MW of nuclear power capacity can be much more than the range of Rs. 7,500,000 – 10,000,000 crores till 2075, keeping in view the vast escalation of prices expected during this period.

Whereas this stupendous public financial expenditure can be seen as mind boggling, what is even more worrisome is the humongous overall cost to our society from the associated activities of a technology which has very many concerns to our communities from social, environmental and inter-generational perspectives also. The requirement of thousands of acres of land, millions of gallons of water per day, people’s displacement, radiation threats etc. are all well known, but putting Rupee value to such costs can drive home the point much more emphatically.

The official stance of the Indian authorities all along has been that the nuclear power plants are required for meeting the growing electricity demand of the people of this country, and it is also implied that producing electricity is the only objective of a nuclear power project. If the objective is only to produce electricity, there should be no reason as to why all the options available to our country to bridge the gap between supply and demand for electricity are not being considered objectively.

It is also a matter of grave concern to the civil society groups, who have been working for decades on various related issues, including the ongoing interaction with the project affected communities, that the concerned authorities have been persistently ignoring the request to provide effective clarification on very many associated policy level issues. The complete absence of any diligent analysis of the true costs and benefits of the nuclear power in effective comparison with other techno-economically viable options available to our country by the concerned authorities is the primary concern in this regard.

In this context, many provisions mentioned in the manual for conducting audit of environment and climate change with the title “Environment and Climate Change – Auditing Guidelines 2010”, as developed by the office of CAG has attracted my attention. It will not be incorrect to state here that every aspect of a nuclear power plant has one or the other environmental concern. The oft repeated advocacy on nuclear power from the perspective of Climate Change can be termed as empty rhetoric and is totally unsubstantiated, when various aspects of a nuclear fuel cycle are diligently studied.

It should not be acceptable for the people of this country that the nuclear power policy is being pursued at enormous societal costs without establishing the real need for the same through such diligent analysis of costs and benefits, and in realistic comparison of the same with other sources of electrical energy, at a time when it is a well known fact that there are many techno-economically feasible options which are also of much less societal cost to bridge the gap between supply and demand for electricity.

Whereas the true benefit from a nuclear power plant to our communities is the value that can be assigned to the MW of electrical power generated, the overall cost to our communities consist of many kinds of costs. Some of them can be listed as capital cost of the project, operational cost, costs associated with the safe keep of nuclear wastes for hundreds of years, reactor decommissioning costs, nuclear accident costs, environmental damages, losses in agricultural and other associated sectors, health costs etc.

In order to achieve the same objective, which is to close the gap between electricity demand and supply, each of very many options available to our country should be objectively compared with other options w.r.t to the total costs and benefits. Whereas such costs and benefits in the case of each such options will vary from location to location, a diligently arrived at comparison of all the credible options can provide a very good indicator of the most suitable option for a given location.

When we objectively take into account various technical, economic, social, and environmental, logistics, and inter-generational issues, the true relevance of nuclear power to India should emerge unequivocally. Such diligent analysis at the policy level is a must before the country can continue with the nuclear power policy.

May I urge the office of CAG to consider undertaking a diligent analysis of various direct and indirect costs and benefits associated with the proposed Jaitapur NPP (in collaboration with France) and the other one where Indian govt. has entered into agreement recently with US for setting up six more nuclear reactors (the site considered for this project of US collaboration is not known at this stage)?. A diligent analysis of all the costs and benefits associated with these two project sites can reveal the true extent of concerns to our country as reflected in the above mentioned communication by Dr. EAS Sarma, and as has been frequently raised by many individuals since the Fukushima nuclear reactor disaster in Japan in 2011.

Whereas, the capital costs associated with the imported reactors such as those at these two sites are known to be enormous, the overall costs to our society from even the indigenous reactors such as the Pressurised Heavy Water Reactors (PHWR) of capacity 700 MW each, as referred to in the minister’s statement to the Parliament on 3rd January 2019, cannot be much less.

As an indicator of the kind of issues involved in such a diligent costs and benefits analysis, a discussion paper on high level analysis of such costs and benefits for the proposed Jaitapur NPP scenario is enclosed for your kind consideration.

Also enclosed to this representation are: (i) my representation to the Chairman Atomic Energy Commission and the Secretary to the Department of Atomic Energy w.r.t the capacity expansion plan at Kaiga NPP in Karnataka; (ii) my detailed submission during the associated Public Hearing over the proposal for capacity expansion plan at Kaiga NPP. A cursory study of these three papers along with many references quoted in them will be able to provide your team a decent appreciation of the kind of serious issues the CSOs in India are concerned about.

In summary, may I state that if one or more unfortunate nuclear accidents of the type, which have devastated the impacted communities around Fukushima, Japan and Chernobyl, Ukraine (formerly in USSR), were to occur in the densely populated and the resource scarce country of ours, the damage to the overall welfare of the country can experience a setback of many decades. In this context, the quality of construction and the diligence in safety aspects are two major concerns in India’s nuclear engineering sector. The serious concerns expressed by Dr. A Gopalakrishnan, who was a former Chairman of AERB, and who is also known as a leading Indian expert in nuclear reactor engineering, on safety aspects of India’s nuclear reactors should be an eye opener for our decision makers. If desired so by CAG, I shall be happy to provide the relevant article in that regard and any additional information necessary.

Keeping in view the humongous costs associated with the large number of nuclear reactors being built/proposed, the long term implications of these projects on our communities, the global level rejection of nuclear power as a national level energy policy, and the absence of a rational debate on nuclear power policy at the societal level in our country, I would like to emphasise that our country is in urgent need of a diligent examination of all the associated issues by the apex auditing body of the country, and subsequently followed by effective discussions in the Parliament. Such a diligent analysis at a policy level has become an imperative before the country can continue to invest massive capital into the nuclear power sector.

I also earnestly hope that such an audit report by CAG will lead to effective discussions in the Parliament on the nuclear power policy, and that a credible energy policy for the country will emerge from such discussions.

It would be ideal if various CSOs, individuals and other stake holders concerned about such a policy are also effectively consulted in the associated activities.

Shankar Sharma
Power Policy Analyst
Anugraha, 5th Cross, 80 ft Road
Vijayanagar 1st stage, Sagara, Karnataka – 577 401




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