VZCZCXRO8042
PP RUEHAST RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHBI #0341/01 2330951
ZNR UUUUU ZZH
P R 210951Z AUG 09
FM AMCONSUL MUMBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 7404
INFO RUEHNE/AMEMBASSY NEW DELHI 8630
RUEHBI/AMCONSUL MUMBAI 2630
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHAAA/NSC WASHINGTON DC
RUEHUNV/USMISSION UNVIE VIENNA 0042

UNCLAS SECTION 01 OF 04 MUMBAI 000341 
 
SENSITIVE 
SIPDIS 
 
USDOE FOR SHANE JOHNSON, TOM CUTLER, AND COURTNEY GILLESPIE 
STATE FOR EEB/ESC/IEC  DAVID HENRY 
NSC FOR ANISH GOEL 
UNVIE FOR GEOFF PYATT 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP EINV EFIN ECON PREL IN
SUBJECT: INDIA'S SECRETARY FOR ATOMIC ENERGY DEFENDS NUCLEAR FUEL 
REPROCESSING AND RECYCLING AT SEMINAR IN MUMBAI 
 
MUMBAI 00000341  001.2 OF 004 
 
 
Summary:  1. (U) In a recent speech in Mumbai, Anil Kakodkar, 
Secretary of the Department of Atomic Energy and Chairman of the 
Atomic Energy Commission, justified India's decision to 
reprocess and re-cycle spent nuclear fuel at a seminar in 
Mumbai.  Using the twin arguments of climate change mitigation 
and sustainability, Kakodkar advocated that nuclear energy 
should constitute a prominent portion of India's total energy 
mix, and that reprocessing technology to re-use spent nuclear 
fuel was essential to unleashing the full potential of nuclear 
energy.  If India is not allowed to re-process spent nuclear 
fuel from imported reactors, Kakodkar warned that 1.2 billion 
tons of coal may have to be imported annually to cover India's 
energy gap.  Audience members expressed skepticism about 
Kakodkar's calls for more nuclear energy, and extolled the 
importance of renewable energy sources instead.  Their fears and 
comments, though in some cases misinformed, reveal that many in 
India are more enthusiastic about the potential of 
less-expensive and easier to deploy renewable energy options -- 
even if many of these plans remain on paper -- than nuclear 
energy for India's future and the fight against climate change. 
End Summary. 
 
 
 
Per Capita Energy Consumption in India Inadequate and 
Unsustainable 
 
---------------------------- 
 
 
 
¶2. (U) At an August 4 seminar in Mumbai, Anil Kakodkar, the 
Secretary of the Department of Atomic Energy (DAE) and the 
Chairman of the Atomic Energy Commission, argued that the 
expansion of nuclear power production in India offered the best 
opportunity to meet India's growing energy needs and to mitigate 
carbon emissions-led climate change.  Kakodkar predicted that 
India's per capita energy consumption of 700 KWh per person per 
year would grow tenfold in the coming decades, which domestic 
energy resources were woefully inadequate to meet.  He argued 
that nuclear energy was non-polluting, sustainable, and released 
more energy per kilogram of fuel than coal. 
 
 
 
¶3. (U) In India, nuclear energy comprises three percent of total 
energy generation capacity and is projected to account for 7 
percent of the energy mix by 2020.  DAE anticipates that nuclear 
energy capacity in India could rise to 20 percent of the total 
energy generation capacity by 2050 under the three-stage nuclear 
energy program that includes the recycling of spent nuclear 
fuel, compared to 16-17 percent of the total energy generation 
capacity globally.  Kakodkar conjectured that 3,000-4,000 new 
reactors of varying capacities would have to be commissioned 
across the world if nuclear energy was to constitute 50 percent 
of the global total energy capacity.  Due to sheer volumes, all 
of these new reactors, both in India and abroad, would have to 
be located near high population densities, and consequently, 
would require more advanced safety features. 
 
 
 
Private Participation Inevitable, but under NPCIL Control 
 
--------------------- 
 
 
 
¶4. (U) Kakodkar acknowledged that India's sole nuclear energy 
operator, the Nuclear Power Corporation of India (NPCIL), 
although cash-rich, would not be able to independently finance 
and develop the large number of reactors envisioned to ensure 
energy security for India.  The NPCIL would have to partner with 
other Indian companies through joint ventures (JV), he admitted. 
 However, NPCIL would hold the majority stake in every JV at 
least for some time, he said.  Kakodkar pointed to the case of 
the ill-fated Dabhol Power Project built by a consortium of U.S. 
companies led by the Enron Corporation.  He explained that a 
 
MUMBAI 00000341  002.2 OF 004 
 
 
nuclear power plant, once commissioned, has to function even if 
it is not producing energy; it cannot be closed or shut like 
Dabhol was by Enron.  For these reasons, he explained, a 
partnership with NPCIL is in the best interests for the country. 
 The private sector should take advantage of the company's years 
of experience and expertise of building India's nuclear energy 
capacity.  (Note: Kakodkar did not specify whether foreign 
companies would be allowed to partner with NPCIL.  However, even 
foreign participation in nuclear energy generation does not 
solve the larger problem of insufficient trained personnel to 
operate the large number of reactors being planned, a problem 
Indian nuclear energy planners have recognized.  End Note). 
 
 
 
Spent Fuel Reprocessing Only Sustainable Long-Term Alternative 
 
----------------------- 
 
 
 
¶5. (U) Kakodkar pointed to a DAE study of India's energy 
resources which estimated that domestic coal resources would 
last for 130 years based on current energy consumption patterns. 
 Coal would last for barely 11 years at the energy consumption 
level projected in 2050.  Hydrocarbons would run out even 
earlier, and uranium would also be radically depleted, he said. 
Kakodkar noted that India's uranium reserves were limited and 
inadequate to fuel the type of nuclear energy program envisioned 
in the country.  For this reason, he emphasized, India has 
pursued a three stage nuclear energy program which involves the 
reprocessing and recycling of spent nuclear fuel.  Under this 
program, nuclear fuel powering 10,000 MW of energy capacity can 
theoretically be re-used multiple times to generate up to 
200,000-500,000 MW of energy, he said. 
 
 
 
¶6. (U) Kakodkar admitted that there are proliferation concerns 
related to the reprocessing and recycling of nuclear fuel, but 
argued that India's limited uranium reserves prevented the 
country from accepting a policy of zero recycling of spent 
nuclear fuel.  He pointed to India's achievement in successfully 
developing research-scale fast breeder reactor (FBR) technology 
that marked the second stage of India's three stage nuclear 
energy program.  The third stage of the nuclear energy program 
envisions unleashing huge quantities of energy through thorium 
reactors.  India has among the world's largest reserves of 
thorium that, even at projected 2050 energy consumption levels, 
is sufficient to last for two centuries. 
 
 
 
¶7. (U) The DAE projects India's energy requirement to be around 
1,300 GW by 2050, assuming a per capita consumption level of 
5,000 KWh per person per year.  According to the DAE study, the 
country would face an energy deficit of 400 GW even after 
tapping all conventional and renewable sources of energy, 
including that unleashed from India's three stage indigenous 
nuclear energy program.  In 2050, bridging this deficit would 
imply importing 1.2 billion tons of coal each year.  Kakodkar 
explained that the purpose of international civil nuclear 
co-operation is "to take advantage of every possible 
additionality over and above the domestic three stage nuclear 
energy program."  Imported nuclear reactors could help augment 
the domestic nuclear energy capacity but will not alone bridge 
the energy deficit.  However, if imported reactors are included 
in India's three stage program so that spent fuel from the 
imported reactor could be re-cycled and reused in the FBRs, then 
the additional energy unleashed could significantly narrow the 
energy gap to 170 GW, Kakodkar maintained.  This would decrease 
annual imports of coal to 0.7 billion tons. 
 
 
 
¶8. (U) The projected energy deficit could also be bridged 
through energy imports.  However, Kakodkar claimed that 
importing energy resources, whether coal or uranium, requires 
 
MUMBAI 00000341  003.2 OF 004 
 
 
huge sums of capital.  On the other hand, he argued that the 
three stage program would allow India to tap every available 
indigenous energy source to meet its energy requirements rather 
than rely on importing energy resources which will become more 
scarce and valuable over time.  For these reasons, Kakodkar 
emphasized, India has to adopt a three stage nuclear energy 
program which involves the reprocessing and recycling of spent 
nuclear fuel for multiple re-use in nuclear reactors.  This 
would enable nuclear energy capacity to rise to 300 GW by 2050. 
The nuclear energy mix would be comprised of indigenously 
developed pressurized heavy water reactors (PHWRs) of 220 MW, 
540 MW, and 700 MW capacities, boiling water reactors, imported 
light water reactors (LWRs), and fast breeder reactors (FBRs). 
 
 
 
¶9. (U) The DAE's vision is to construct four FBRs of 500 MW 
capacity each by 2020.  A prototype 500 MW FBR is currently 
under construction and is expected to be commissioned by 
end-2010.  A critical facility of the third stage Advanced Heavy 
Water Reactor (AHWR) was commissioned last year, and 
construction of a prototype 300 MW AHWR will soon begin. 
According to Kakodkar, the AHWR, which produces 68 percent of 
its power from thorium, is being designed with a three day grace 
period in case of a nuclear accident to enable the operator to 
implement counter-measures.  This is currently not available in 
any nuclear reactor, he said.  The design life of the AHWR is 
planned for 100 years, well beyond the 60-year lifespan of other 
reactors.  (Note: U.S. reactors are licensed for 60 years, but 
anticipated to have a longer, undefined lifespan.  End Note). 
Kakodkar acknowledged that the AHWRs were still "many years" 
away from successful commercial-scale commissioning.  He 
explained that fissile material (uranium-233) inventory has to 
be built in the second stage to enable the third stage of the 
nuclear power program to take off. 
 
 
 
India's Comparative Cost Advantage in Building Reactors Should 
Translate to More Local Content for Imported Reactors 
 
--------------------------------------------- -- 
 
 
 
¶10. (U) According to Kakodkar, Indian nuclear power facilities 
measure more favorably in terms of cost as compared to 
international nuclear energy facilities.  Nuclear reactor 
facilities can be constructed at a cost of $1,700 per KWh in 
India, as compared to $2,000-2,500 per KWh internationally, and 
can be built in the same amount of time, he claimed.  Kakodkar 
stressed India's relative cost competitiveness as the reason LWR 
technology imported into India should use "progressively 
localized content."  Without tapping India's nuclear equipment 
manufacturing supply chain, imported reactors will not be cost 
competitive, he argued.  The DAE is itself working towards 
reducing the capital cost of FBRs to bring down cost, he added. 
 
 
 
¶11. (U) Kakodkar also touted India's capability of building and 
operating pressurized heavy water reactors (PHWRs) comparable to 
international standards and said that the country was 
considering exporting its new prototype 700 MW PHWR reactor once 
it was successfully commissioned.  Kakodkar also pointed to the 
export opportunities for Indian service providers for equipment 
supply and plant life service management to extend the life of 
ageing nuclear power plants. 
 
 
 
Audience Prefers Renewables To Nuclear Energy 
 
----------------------- 
 
 
 
¶12. (U) In a question and answer session following the talk, 
 
MUMBAI 00000341  004.2 OF 004 
 
 
audience members expressed skepticism over Kakodkar's plans, and 
accused the DAE of emulating the U.S. energy landscape at the 
expense of renewable energy solutions.  Kakodkar stated that the 
U.S.-India Civil Nuclear Energy Cooperation Agreement made it 
possible for India to target an increasing share of nuclear 
energy capacity in its total energy mix.  Kakodkar agreed that 
India had to make full and complete use of any and all renewable 
energy solutions, but argued that renewable energy could account 
only for a fraction of India's growing energy requirements.  He 
also addressed audience concern that technical or equipment 
failures -- particularly from foreign companies -- could lead to 
nuclear accidents by assuring that modern nuclear plants have 
extensive safety features that would prevent a Chernobyl-like 
event.  He also explained that nuclear energy-fuelled 
electricity was no different from coal-fired thermal power, and 
residents therefore had no reason to fear radiation exposure 
from electricity supply from nuclear power plants.  Finally, 
responding to accusations that India was emulating the U.S., 
Kakodkar pointed out that India (and the DAE) was an "ardent 
custodian of the three stage nuclear energy program" which it 
would have abandoned if it wanted to copy the U.S.  He insisted 
that the world would soon emulate India's approach based on 
utilizing reprocessed fuel.  France was already reprocessing 
nuclear fuel and Russia was also considering the proposal, he 
said.  According to Kakodkar, even the U.S., which was initially 
vehemently opposed to nuclear fuel reprocessing, may decide to 
adopt this practice, which reduces the quantity of nuclear waste 
and mitigates the problem of climate change. 
 
 
 
Comment: 
 
------- 
 
 
 
¶13. (SBU) Kakodkar, the self-appointed guardian of India's three 
stage nuclear energy program, used his speaking engagement as an 
opportunity to push forward the case for reprocessing and 
reusing domestic and imported nuclear fuel in both domestic and 
imported reactors.  He did not address India's hope to acquire 
cutting edge enrichment and reprocessing (ENR) technology to 
augment its indigenous technology.  As with most other 
Government of India-run research and development programs, the 
expansion of nuclear energy capacity in India has been slow and 
plodding.  The DAE believes that a five-fold augmentation in 
nuclear energy capacity in another 10-odd years is possible now 
that the country has access to hitherto-denied imported nuclear 
fuel and reactors.  However, given the slow pace of nuclear 
energy development and government's monopoly over nuclear energy 
research and operations, it is doubtful that the DAE's ambitious 
nuclear energy expansion program will proceed as projected.  As 
more coal plants come on line, India would have to develop 
nuclear power plants at a rate far exceeding any past 
performance to meet its 7 percent goal by 2020, unlikely with 
the government's existing monopoly and steep learning curve for 
private sector participation, not to mention the inevitable and 
unexpected regulatory and political hurdles.  Moreover, his 
well-articulated arguments failed to resound with a prominent, 
mainly non-technical audience, who, apart from his colleagues at 
DAE and NPCIL, comprised of businessmen, academics, journalists, 
and NGOs, skeptical of the potential for nuclear power 
development in India, where a passion for renewable energy has 
taken hold.  For them, renewable energy rather than nuclear 
energy remains a more attractive solution to energy security and 
climate change in India.  End Comment. 
FOLMSBEE