by Suman Gupta
On Wednesday, March 2017, Toshiba's Westinghouse nuclear division filed for Chapter 11 bankrupcy protection.
Amit Bhandari, Fellow Energy and Environment Studies, discusses in detail the impact of this development on India. He will be available to comment and provide analysis on this.
The bankruptcy filing of Toshiba’s subsidiary Westinghouse may potentially save India from tying up tens of billions of dollars in expensive and wasteful assets.
Under the terms of the India-US nuclear agreement of 2008, Westinghouse was one of the four vendors short-listed to build nuclear power reactors in India – funded by Indian money. Westinghouse was to build six units of its AP 1000 design in Kovvada, Andhra Pradesh, for which it submitted a techno-commercial offer. But the bankruptcy filing will affect implementation of the project.
This is an opportunity for India - make the best use of this delay to reconsider the financial costs of imported nuclear power.
The six Westinghouse units in India can cost up to $50 billion – the equivalent of 2.3% of India’s GDP and is sufficient to equip every single Indian household with a 600-watt high-quality solar panel, enough to power lights, fans and a television in every single Indian household.
Besides, renewable energy – both solar and wind – has already overtaken nuclear power in India. India generates twice as much power from renewable sources as it does from nuclear energy, and this gap will only increase because renewable’s visible advantages:
i. It’s cheaper at Rs. 3.3 per unit vs Westinghouse’s estimated at over Rs. 10 per unit
ii. Faster to build, between 12-18 months vs. nuclear’s 14-15 years
Building renewable systems is also a more efficient use of India’s capital because these energy structures are built in modular form which means that as parts of the project are completed, they start generating electricity. A nuclear power reactor will not generate a single unit till it is 100% complete. Hence, tens of billions of expensive dollars will be tied up for over a decade before generating a rupee of return.
The India-US nuclear agreement was signed when nuclear power was the only major source of energy capable of replacing coal. This is no longer the case. Advances in renewable energy have created newer, safer possibilities - and the aftermath of Fukushima has pushed up the cost of nuclear power.
If India must go for nuclear energy, it must refuse to tie up tens of billions of dollars by importing nuclear power plants from Westinghouse, GE and Areva and instead use cheaper, reliable indigenously designed pressurized heavy water reactorss.