Fission statement

Obama and Modi want to sell nuclear power to India that is too dangerous and expensive even for US

Only two new nuclear plants are being built in the US and even they are way over budget.

The recent “breakthrough” in the nuclear talks between Indian Prime Minister Narendra Modi and US President Barack Obama has raised more questions than answers. The biggest question of them all is the issue of the liability nuclear equipment suppliers will have to face in case of a nuclear disaster. There is word that an insurance pool will be created to indemnify foreign suppliers and cover the liability. So let us look at this issue of the nuclear insurance pool more closely and then examine the nuclear industry in the US.

Last year, before the Russian corporation Rosatom and Nuclear Power Corporation of India finalised the framework agreement for building two additional reactors at Kudankulam, the Department of Atomic Energy claimed that the General Insurance Corporation had offered an insurance package to the Russians. However, a Right to Information application to the GIC revealed that no such offer had been made.

Unidentified officers at the Department of Atomic Energy subsequently told the press that GIC’s initiative had not worked out and that the Finance Ministry had been approached to help with the formation of the nuclear insurance pool. Over the course of over one year, seven RTI applications were filed, three to GIC and four to the Department of Atomic Energy, United India Insurance and Insurance Regulatory and Development Authority. The replies to each only added to the mystery of the nuclear insurance pool.

In an article dated 26 September, 2010, former IRDA Chairman J Hari Narayan said: “We are awaiting the Nuclear Bill becoming a law. Then we would provide the framework for providing insurance cover for nuclear accidents.” Four years later, in an RTI reply dated 8 September, 2014, the insurance regulator said, “IRDA as on date had not prepared any draft framework for providing insurance cover to Indian Nuclear Plants.”

The United India Insurance went a step further and stated in its RTI reply dated 12 September, 2014, that it had not provided any capital for the pool, nor had it received any communication from the GIC about the pool. It did however mention that the matter was in the development phase, as opposed to the claim in the media that the nuclear insurance pool was at an advanced stage.

Funding the pool

In a recent press briefing, Joint Secretary of Ministry of Corporate Affairs Amardeep Singh said that the GIC and other Indian nuclear insurance companies will raise Rs 750 crore ($125 million) for the insurance pool, while the remaining Rs 750 crore will come from the government. It is unclear how the government would fund this pool now given that it had declared its inability to do so earlier. Two options are considered as possibilities: providing catastrophe bonds or sovereign guarantee.

Catastrophe bonds, or cat bonds, are generally offered for a specific set of risks generally linked to natural disasters. There is little experience in this decade-old field to support a risk related to human error – an inherent risk in nuclear power plants.

As for sovereign guarantees, the reality is that it is not unlimited so providing it to one project would reduce the availability of funds for another project. Also, rule 3(3) of the Fiscal Responsibility and Budget Management Rules, 2004, limits the volume of sovereign guarantees undertaken in a financial year to 0.5% of the GDP. India’s GDP currently stands at $1.8 trillion – 0.5% of this would amount to a little over $9 billion. Providing sovereign guarantee to nuclear plants would reduce the volume, if needed, for other infrastructural development projects, such as the Japanese high-speed bullet train Shinkansen.

Whichever way the pool is funded, there is also the issue of the liability’s size. For the sake of comparison, let us look at the Fukushima nuclear accident in 2011, which has cost more than $100 billion. According to a Japanese National Diet report, that accident was caused by a fault in design. Since General Electric supplied those reactors, the fault therefore lies with the company. But, in the absence of supplier liability, the Japanese taxpayers have had to pay for the accident.

The proposed Indian nuclear insurance pool of Rs 1,500 crore ($250 million) would cover only about 0.3% of the cost of the Fukushima disaster. It is understood that Rs 1,500 crore is the limit set in the Nuclear Liability Act, but it is important to note that the Act was passed by the Parliament before the Fukushima accident. In the light of that tragedy, the government must relook at the limit.

Nuclear industry in US

The Indian government must also consider the fact that nuclear power in the US is on the decline. Nuclear-generated electricity today accounts for less of the US energy mix than it did before the highly-touted “nuclear renaissance”. As former chairwoman of the US Nuclear Regulatory Commission Allison Macfarlane, an Obama appointee, said last month: “The predicted nuclear renaissance did not materialise.” In fact, more new nuclear reactors have been cancelled in the US than are under construction. So, nuclear corporations want to sell to India those same reactors that are too expensive to find buyers in the US.

There are only two new nuclear plants (four reactors) under construction in the US. Both these are past schedule and each more than a billion dollars over budget. In South Carolina, the site of two Westinghouse AP1000s, these costs translate into a tenfold rate increase for local consumers. South Carolina ratepayers are now shelling out $500 more per year for electricity than they did five years ago merely to pay for the new nuclear plant. The current estimate for the two reactors is $11 billion ($1.2 billion over budget) and it is hard to believe costs will not rise. The cost for the same reactors across the South Carolina border, in Georgia, is already $14 billion ($2 million for every day of delay).

This abysmal track record mirrors the history of nuclear construction in the US. The first 75 nuclear reactors experienced $100 billion in cost overruns. And those cost increases occurred before the meltdown at the Three Mile Island caused nuclear construction to become even more cost prohibitive. The supposed nuclear renaissance was premised more on industry propaganda than progress in controlling nuclear power costs. No-one in the US is now ordering new nuclear reactors and those that have are likely experiencing buyer’s remorse.

Future is renewable energy

In the US, as in India, the future of electricity is not nuclear. It is renewable energy. Solar, especially rooftop solar, represents an existential threat to the monopolistic model of producing electricity via large base-load electric plants like nuclear reactors. As nuclear power plant costs continue to rise, the cost of solar power is dropping precipitously. According to a recent report of Deutsche Bank, solar power will be cost competitive in the US next year and in 80% of the rest of the world, including India, in 2017.

Obama and Modi should have focused their efforts on fostering the revolution that is occurring in renewable energy. It is better for their people, their pocketbooks and the planet. If Obama and Modi want to prevent the most catastrophic consequences of climate change, they need to support solutions that are fast and affordable. Nuclear power is neither.

Rather than bow to the demands of foreign corporations, India should stand firm. If nuclear power was as safe and green as its proponents contend, then India’s liability law should not have been an issue. But the truth is that it is not. One need only look to Japan to see that now, a few years after the Fukushima disaster, radiation from the triple meltdowns is still leaking into the Pacific Ocean. The only thing green about nuclear power is the foliage growing in the abandoned villages that surround Fukushima.

The authors work with the non-governmental environmental organisation Greenpeace.

We welcome your comments at letters@scroll.in.
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“My body instantly craves chai and samosa”

German expats talk about adapting to India, and the surprising similarities between the two cultures.

The cultural similarities between Germany and India are well known, especially with regards to the language. Linguists believe that Sanskrit and German share the same Indo-Germanic heritage of languages. A quick comparison indeed holds up theory - ratha in Sanskrit (chariot) is rad in German, aksha (axle) in Sanskrit is achse in German and so on. Germans have long held a fascination for Indology and Sanskrit. While Max Müller is still admired for his translation of ancient Indian scriptures, other German intellectuals such as Goethe, Herder and Schlegel were deeply influenced by Kalidasa. His poetry is said to have informed Goethe’s plays, and inspired Schlegel to eventually introduce formal Indology in Germany. Beyond the arts and academia, Indian influences even found their way into German fast food! Indians would recognise the famous German curry powder as a modification of the Indian masala mix. It’s most popular application is the currywurst - fried sausage covered in curried ketchup.

It is no wonder then that German travellers in India find a quite a lot in common between the two cultures, even today. Some, especially those who’ve settled here, even confess to Indian culture growing on them with time. Isabelle, like most travellers, first came to India to explore the country’s rich heritage. She returned the following year as an exchange student, and a couple of years later found herself working for an Indian consultancy firm. When asked what prompted her to stay on, Isabelle said, “I love the market dynamics here, working here is so much fun. Anywhere else would seem boring compared to India.” Having cofounded a company, she eventually realised her entrepreneurial dream here and now resides in Goa with her husband.

Isabelle says there are several aspects of life in India that remind her of home. “How we interact with our everyday life is similar in both Germany and India. Separate house slippers to wear at home, the celebration of food and festivals, the importance of friendship…” She feels Germany and India share the same spirit especially in terms of festivities. “We love food and we love celebrating food. There is an entire countdown to Christmas. Every day there is some dinner or get-together,” much like how Indians excitedly countdown to Navratri or Diwali. Franziska, who was born in India to German parents, adds that both the countries exhibit the same kind of passion for their favourite sport. “In India, they support cricket like anything while in Germany it would be football.”

Having lived in India for almost a decade, Isabelle has also noticed some broad similarities in the way children are brought up in the two countries. “We have a saying in South Germany ‘Schaffe Schaffe Hausle baue’ that loosely translates to ‘work, work, work and build a house’. I found that parents here have a similar outlook…to teach their children to work hard. They feel that they’ve fulfilled their duty only once the children have moved out or gotten married. Also, my mother never let me leave the house without a big breakfast. It’s the same here.” The importance given to the care of the family is one similarity that came up again and again in conversations with all German expats.

While most people wouldn’t draw parallels between German and Indian discipline (or lack thereof), Germans married to Indians have found a way to bridge the gap. Take for example, Ilka, who thinks that the famed differences of discipline between the two cultures actually works to her marital advantage. She sees the difference as Germans being highly planning-oriented; while Indians are more flexible in their approach. Ilka and her husband balance each other out in several ways. She says, like most Germans, she too tends to get stressed when her plans don’t work out, but her husband calms her down.

Consequently, Ilka feels India is “so full of life. The social life here is more happening; people smile at you, bond over food and are much more relaxed.” Isabelle, too, can attest to Indians’ friendliness. When asked about an Indian characteristic that makes her feel most at home, she quickly answers “humour.” “Whether it’s a taxi driver or someone I’m meeting professionally, I’ve learnt that it’s easy to lighten the mood here by just cracking a few jokes. Indians love to laugh,” she adds.

Indeed, these Germans-who-never-left as just diehard Indophiles are more Indian than you’d guess at first, having even developed some classic Indian skills with time. Ilka assures us that her husband can’t bargain as well as she does, and that she can even drape a saree on her own.

Isabelle, meanwhile, feels some amount of Indianness has seeped into her because “whenever its raining, my body instantly craves chai and samosa”.

Like the long-settled German expats in India, the German airline, Lufthansa, too has incorporated some quintessential aspects of Indian culture in its service. Recognising the centuries-old cultural affinity between the two countries, Lufthansa now provides a rich experience of Indian hospitality to all flyers on board its flights to and from India. You can expect a greeting of Namaste by an all-Indian crew, Indian food, and popular Indian in-flight entertainment options. And as the video shows, India’s culture and hospitality have been internalized by Lufthansa to the extent that they are More Indian Than You Think. To experience Lufthansa’s hospitality on your next trip abroad, click here.

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This article was produced by the Scroll marketing team on behalf of Lufthansa as part of their More Indian Than You Think initiative and not by the Scroll editorial team.