The unprecedented northern power grid failure on July 30 and the North-eastern power grid failure on July 31 plunged 700 million Indians into darkness. This is an ominous warning of a deep crisis in our power sector. Strangely, though not surprisingly, this is being used as a pretext to advance the cause of nuclear power generation following the Indo-US nuclear deal.
The official explanation for the grid failure is that states have violated grid discipline and overdrawn power. This leads to a fall in transmission frequency, which causes such a collapse. Normally, in order to isolate and separate a particular section of the grid, which becomes vulnerable to such overdrawing, special protection systems — under frequency relays (UFRs) — are installed to prevent the frequency from dropping. Whether such UFRs were installed or they were ineffective needs to be examined. The UFRs are there in the southern grid and, hence, it did not collapse. Even the explanation of overdrawing by the states appears specious with the monsoon having set in and the peak demand on the grid actually coming down.
There are deeper reasons behind this crisis in our electricity sector. The main cause for such a mess is the Electricity Act of 2003 brought in by the BJP-led NDA government. This was, of course, eagerly taken forward by the UPA governments. This act legalises the separation of power generation from transmission and distribution. Foreign and private operators were granted several major concessions to augment power generation - fixed power purchase agreements at inflated prices (Enron being the prime example); captive coal mines (which resulted in the now Comptroller and Auditor General-exposed coal scam); removal of all import duties and easy loans from public sector banks. Some private players made a killing by entering this sector. But transmission remained entirely in the public sector while distribution also continues to be largely in the public sector.
In the name of promoting private investments in this sector, public investments have drastically fallen. All the Five Year Plans (FYP) in the era of liberalisation reforms saw lower levels of public investment in the power sector than what was invested in the seventh FYP. The net result is that transmission became vulnerable. Power once generated can’t be stored and has to be transmitted and distributed. If the transmission links suffer, then such collapses are inevitable. Even the US has concluded that the last New York grid collapse was due to lack of investments in transmission.
Instead of correcting this dangerous imbalance, UPA 2 is advancing nuclear power as the alternative. Thus, providing newer avenues for greater profits for foreign and Indian players. This is coming notwithstanding last year’s Fukushima disaster in Japan, which has raised legitimate questions on the safety of nuclear reactors. At home, all proposed sites for nuclear power installations have seen major protests by people — Kudankulam (Tamil Nadu), Jaitapur (Maharashtra), Kaiga (Karnataka), Kovvada (Andhra Pradesh), Haripur (West Bengal), Kumharia (Haryana) and Bhav Nagar (Gujarat).
Ignoring all these, the government is pressing ahead to give orders to foreign corporates for nuclear reactors. In order to entice them, rules have been framed under the Civil Nuclear Liability Act that absolve the supplier of any liability in the case of an accident. A statutory motion challenging these rules as being violative of the Act is pending before the Rajya Sabha for disposal in the current session.
On the day of the grid collapse in India, the CEO of General Electric, one of the world’s largest suppliers of nuclear power equipment, told Financial Times, “It’s just hard to justify nuclear, really hard.” Nuclear power is very expensive as compared to other forms of energy. The US shale gas revolution has sent natural gas prices down to a 10 year low. Analysts believe that this trend will spread globally. Over the last three years, there has been a 75% fall in the price of solar panels. Likewise, offshore wind turbine prices have steadily declined. Apart from exploring such alternatives, our government appears keen to advance nuclear power.
The power minister told Parliament on April 14 that we are currently producing 2,00,787 MW of power. Of this, nuclear power is 4,780 MW — i.e. less than 2.5%. Given the abundance of coal reserves in India, the Planning Commission estimates that thermal energy would dominate power generation. As far as hydroelectricity is concerned, as against the potential of 2.5 lakh MW, we have an installed capacity of 1.48 MW. The tapping of such huge hydro-potential will not only augment our energy capacities at half the cost of nuclear energy, but will also tame the rivers that are consuming the lives of thousands at this moment through recurring floods.
Nuclear energy is the most expensive energy option for India. Eminent scientists have estimated that the cost per mega-watt would be Rs. 11.1 crore from imported nuclear reactors. The prime minister has announced a target of 40,000 MW of nuclear power. If 30,000 MW of this were to come from foreign reactors, it will cost us R3,30,000 crore. The same amount of thermal energy would cost Rs. 1,20,000 crore. Using gas or hydral generation, the cost would be only R90,000 crore. By using the nuclear option for generating 30,000 MW, India would be spending anywhere beyond Rs. 2 lakh crore more than by using the available alternatives. Can we afford such an expensive option?
It is cruel to pursue such a course when the finance minister talks of cutting subsidies for the poor in the name of fiscal discipline. We are unable to provide food security to our people, but are willing to create newer avenues for profit maximisation. Can this be allowed?
Sitaram Yechury is CPI(M) politburo member and Rajya Sabha MP
The views expressed by the author are personal