India’s nuclear liability law is still its final answer

The U.S. and France want an amendment to the law’s draconian requirements, but Russia appears to have gotten a “get out jail free” card and China just doesn’t care.

ElephantIn 2008 the U.S. supported a move by India to be released from a three decade ban on sales of uranium to that country for its civilian nuclear reactors, which at that time had less than 5 GWe of capacity.  The Nuclear Suppliers Group, which feared the uranium would be used for India’s weapons program in a future war with Pakistan, was convinced to lift the ban. The return favor expected by the Bush Administration was that India would open its domestic markets to U.S. based nuclear vendors including Westinghouse and GE-Hitachi.

Fast forward two years later and what you see is India’s Parliament passing a nuclear liability law that placed impossible conditions on vendors of nuclear reactors, and their components, even years after they had been installed and operated by the Nuclear Power Corp. India Limited (NPCIL). Then Indian Prime Minister Singh made half-hearted efforts to repeal or blunt the effects of the law, but wound up with the predictable egg on his face when President Obama visited India in November 2011 and the law remained on the books.

Now in 2014 China and South Korea are seeking to make end runs around the law by telling India they are willing to sell reactors to New Delhi without any changes to it. China has reactors designs in the 600MW and 1100 MW range it says are ready for export. South Korea has already broken into international markets with the sale of four 1400 MW units to the United Arab Emirates.

No progress for U.S. or France

rhinos-with-lilac-breasted-rollerMeanwhile, the U.S. and India are still at loggerheads over the law despite a pending visit by Indian’s new PM Modi  to see President Obama this coming week. And Areva, which has a deal with India to build two 1600 MW units at Jaitapur, is still trying to get India to climb down from the law’s requirements when it comes to reactors supplied by state-owned firms.

This is exactly the approach the Russians have taken with India. According to a report in the Telegraph India for 9/11/14, Russia is reported to have reached a “breakthrough agreement” with India that admits Rosatom is a state-owned firm and therefore the agency of a sovereign power. Details of the agreement were not reported by the paper.

India has a domestic 700 MW heavy water reactor that it is building at several sites, and some analysts have suggested that the liability law is intended to protect that industry. However, domestics critics of the law include Indian firms that want to build reactor pressure vessels, steam generators, and turbines. They feel they cannot compete with Russia, China, or South Korea because as private firms a single liability finding could wipe them out.

The Indian government might use the arrangements with China, South Korea, and Russia as a form of negotiation pressure on Washington, but the realities of publicly traded firms are something diplomats can’t bargain away.

Kudankulam will have both reactors operating this Fall

The twin Russian built 1000 MW VVER nuclear reactors in India’s Tamil Nadu province will both be operating this Fall. The second plant is expected to start fission processes in November. The first plant will complete a planned maintenance shutdown this month and return to revenue service.

Both units were the subject of long standing protests while being built, which resulted in delays. Massive power blackouts affecting 650 million people across India in 2012 convinced local political leaders that having the electricity from the reactors would win votes.  NPCIL told them that that they could decide where half of all the power from the reactors would go in terms of customers. The first Kudankulam unit went critical in July 2013. Half of the juice from both units goes to users in Tamil Nadu, and the rest is wheeled to India’s regional electrical grid.

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