Thorium and India's Energy Security

Uranium as a thorn in India’s Foreign Policy

India’s  External Affairs Minister, S. M. Krishna is in Australia this week alongside India’s President attending the CHoGM. He has reiterated once again that Australia should sell uranium to India. But Australia has also said that India must sign the NPT.  This is one stance that India has a leg to stand on in the international arena;  but India  has done little to articulate the fact that the NPT is weaker than India's history and  code of non proliferation. 

Australia’s insistence on India signing the NPT is very imperious and spanks of rank racism, given Australia's main trading partner China has nuclear weapons, is a massive proliferator of war machinery world wide, abuses human rights and uses torture and harassment of state dissidents as  a tool of state policy and importantly threatens both Tibet and India with its nuclear arsenal and its veto vote in the UN.

Equally laughable is how India  has finally mastered the art if milking a cow, throwing away the milk and then going outside to beg for milk. 

The crux of the issue is India’s Energy Security. 

With2/3^rd of the world’s thorium it could develop an alternative programme to Uranium, but it has yet to get a viable prototype off the ground.  This absence of foresight is costing India dearly and hobbling India’s growth into the 21^st century.

Thorium as a viable alternative to India’s Energy Shortfall and Security.

Additionally, from a Climate Change Perspective, Governments worldwide are plumping for nuclear power rather than renewable energy to counter global warming.  However, (i) the huge potential for radioactive contamination and (ii) the fast vanishing supplies of high-quality uranium ore. Another alternative, albeit nuclear, was rejected by the European Commission in 1999 and 2000: a much safer way to produce nuclear energy called 'accelerator-driven system (ADS)' using a much less radioactive substance, Thorium.

·        Accelerator-driven systems

In an 'accelerator-driven system' (ADS), a very strong external beam of protons is needed to trigger and maintain the heat-generating reactions. If a reaction appears to be getting out of control, you simply switch the proton beam off. In an ADS, the chain reaction which can become an atomic bomb or melt down a conventional reactor, could only occur through utter negligence or sabotage by an insider. A fault or, for instance, a bomb, would halt the reaction instantly. On the other hand, a terrorist bomb on a conventional reactor could contaminate land and people for hundreds, may be thousands of miles. Professor Egil Lillestol* estimates that the technology would require only 550 million euros and 15 years to develop. One major remaining problem is how to safely contain the molten lead (highly corrosive) used in the ADS process.

Thorium Supply and Demand

There is three times as much thorium as uranium in the Earth's crust. It produces 250 times more energy than uranium. Thorium waste loses its radioactivity in hundreds of years rather than tens of thousands. So what's the problem? Australia has the  world's largest reserves of thorium, alongside  India, which is sitting on about a quarter, has already planned its transition to ADS-thorium reactors. Do the math, that would make Thorium based reactors heaven sent towards Energy Security and a Global shift away from Uranium. 

Global Reserves of Thorium:

http://www.world-nuclear.org/info/inf62.html

India Vs the Rest 20 years from Now:

Some analysts believe that the prime objection to global investment in ADS-thorium technology is more political than scientific. The countries which currently supply or process uranium like Australia ore are, understandably, not supportive. Nor are the countries which are still jealously guarding nuclear-uranium know-how. Those which have ADS-thorium know-how are also, to some degree, keeping it to themselves and working on different prototypes rather than pooling their expertise. Developing ADS-thorium technology within a relevant global warming timescale will demand (i) an acceptance that global power balance will shift from oil and uranium-owning nations to thorium-owning nations, and (ii) an unprecedented level of international cooperation and sharing.

Both China and Pakistan have little in the way of Thorium and could rely on 3rd parties to supply its requirements. That make make India a more strategic player in years to come.

That could leave India in  position of strength once the ADS-Thorium prototype is cracked by them. That would shift the entire power equation into India’s Thorium resevers, which today is estimated to be 60% of the world’s supply. Uranium exporting countries would do well to supply India’s requirement today to have an equitable position in Thorium sourced Energy tomorrow.

Clearing the Air with Greener Buildings

A recent article that focuses on manufacturing Ply-Board using renewable agri-waste that would reduce the carbon foot print of Buildings in Annexure 1 countries. Great potential for reducing GHG emmisions that villagers use as a fuel and the growing of Sorghum (more thatn 6 feet in Hieght) is a underated Carbon Sink as well.

http://docs.google.com/fileview?id=F.8389b216-0c9d-4d2f-966a-7033f94ecf85&hl=en

A Sub-Prime Crisis Divali Prayer for Sustainable Energy

Way Cool Greeting that I received this Divali.

I just cut and pasted it here.

I asked Lord Ganesh:
What ails Banking and Finance?
As far as the eye can see, we are all awash in bankruptcy.
From the origins of the subprime crisis is the US, now all havens are useless.
I went to my bank, but my banker said our balance sheet is a mess,
There is nothing Left with our Right,
And nothing Right with the Left.
With that death knell ringing in my ears,
I turned to for help from my friends,
Who said: we are in shock! This is the beginning of the end.
Help me Oh Lord, for the end is nigh,
I cannot see light at the end of this tunnel,
My sustenance must come from on High.

Lord Ganesh replied.
Son! It appears we have not learn the lesson,
From our days in the Asian contagion,
The prime lesson you have failed to learn,
One should never spend more than one earns,
With so much money, chasing just a few pennies,
This catastrophe made by all these bankers, were led by few Bernankes,
Blame it on these few, with all their hubris and illusionary gravy pails,
For all they had was a hammer, so everything became nails.
Even I don’t understand your Credit Derivatives, CDOs or Swaps,
Do not come to me for help in cash or any other sop.
To be kind, I cannot undo the knot that I did not bind,
To understand your sudden panic of financial health
May I humbly refer you to the Goddess of Wealth.

From Goddess Laxmi.

I turned to Goddess Laxmi, for Diwali is her time,
There She stood in all regal prime and splendor,
showering the world with all her cornucopia,
From her two hands flowed Kama and Artha.
But then in her beautiful voice she looked at me and said,
Don’t get carried away or you’ll be soon over your head,
Please don’t forget my other hands of Dharma and Moksha,
for without these arms of Righteousness and Liberation,
I fear human kind will go further into damnation.
Look around you she murmured so sweetly,
Spare a thought for the needy.
As you gorge yourselves with sweets and food, most of my resources are depleted by these
very same greedy.

To satisfy your wants,
you sell over-leveraged loans written by mysterious quants,
Is it small wonder then that you are drowning in a sea of groans,
Upto your eye-balls in credit card loans.
Even the Gods don’t begrudge small pleasures,
But this Divali, when you blow up your money,
Spare a thought for me, your mother Earth, for what its worth.
You can make a bigger bang with those fire works
but reduce the noise and smoke emissions,
Pool your fire crackers with your friends and other relations.
In all these years of depleting reserves, there is not much more left in assurances,
So you could consider investing in renewable energy and resources;

Do your selves some merit,
In the future generate some carbon credit.

Tapas
On hearing these words of dire warning,
The loud bang of the fire crackers accentuated Goddess Laxmi words of global warming,
To reduce my years of extreme excess,
I cut up my credit cards and planned a spending recess.
In the future to make my dollar go further, I hope to waste not, want not and put
expenditures on the back burner.
To those who don’t have a 3 square meals a day, Divali crakers and Laxmie have no
meaning as we all make hay,
In this hour of financial crisis as we try to avert bankruptcy,
Spare a thought to those who are our loadbearers and the real pillars of our society.
If you think these words ring true, do the earth a favour
By forwarding this divali greeting to your friends who genuinely labour.

The Coming Changes n India's Renewable Energy Landscape.

When an eye surgery that I was just about to undergo in India had to be rescheduled because of one of India famed power outages, I decided never to go back. I took my business to another country.
_______________________________________
India lacks Energy Security:
India’s lack of energy and power is the bane of India industrial growth story is well documented. Fundamentally, India lacks energy security. Every one touts non conventional energy as the answer. Even the surgeon who was in charge of my surgery claimed he was an expert. To prove it, he showed me his investment with a group of his peers who bought into a wind farm!
What accentuated my panic at the time of the surgery, was that I was coming out of consulting for two projects in India with two persons that had considerable pretentions in running a businesses in Renewable Energy; positioning both these projects to VCs and PE gave me a ring side view of the hype and practicable difficulties that investors should be wary of.

The questions that investors considered before backing out of a renewable energy projects are myriad, but some of them are:

Is alternative energy a real and viable alternative to plug the shortfall, or is it promoted only to monetize carbon credits?

If all these renewable energy technologies could be tapped to its fullest, can India meet its energy needs in the short to medium term? Are the targets realistic? Indeed, are renewable or alternative energy sources important? Is the focus on production misplaced? Is the focus in Carbon Credits diverting financial resources to realistic projects? Is it all muddy water?

DISSERATA:
TWO ISSUES NEED TO HIGHLIGTED THAT MANY FRET OVER BECAUSE IT IS NEVER ADDRESSED ALONGSIDE THE HYPE OF FUNDING RENEWABLE ENERY PROJECTS.
1. The losses in India power supply and distribution make India’s fascination with renewable or alternative energy disingenuous. A SMART GRID solution to address the leakage costs needs to be implemented first to achieve power for all.
2. If implemented aggressively, the Nuclear Agreement with NSG/US will change the renewable energy landscape.
1. IMPLEMENTING SMART GRID TECHNOLOGIES ARE A SOURCE OF RENEWABLE ENERGY.
Today over 25% of the total electrical energy generated in India is lost in transmission (8-12%) and distribution (18-20%). The electrical power deficit in the country is currently about 18-20%. The free distribution of power to groups as part of the political largesse is another topic that needs to be debated another time.

India’s grid is similar in design to the U.S.
As is the case in most of the world, the Indian national grid was not designed for high-capacity, long-distance power transfer. As is the case in the United States, India needs to interconnect regional grids. Although coal and hydro-electric potential has peaked in many parts of India, there are still several regions with excess capacity. Large wind potential and increasing wind capacity in the south and west also create a need for transmission infrastructure.
Unfortunately, like the United States, regions are generally sectionalized, with some asynchronous or HVDC links allowing for minimal power transfer. The biggest difference is that India’s transmission grid only reaches 80% of its population, while the transmission grid in the United States reaches over 99% of its population.

India’s grid is not financially secure.
According to its Ministry of Power, India’s transmission and distribution losses are among the highest in the world, averaging 25% of total electricity production, with some states as high as 62%. When non-technical losses such as energy theft are included in the total, average losses are as high as 50%. The financial loss has been estimated at 1.5-2.0 % of the national GDP, and is growing steadily. At an estimated GDP of a Trillion dollars in 2008, addressing these losses should be the first priority alongside discussions of energy security.

India’s power sector is still largely dominated by state utilities. Despite several attempted partnerships with foreign investors, few projects have actually been implemented. This lack of foreign investment limits utilities’ ability to raise needed capital for basic infrastructure.
This financial frailty, coupled with public ownership of utilities and the related bureaucratic slowness, has made it very difficult for investors to take interest in India’s grid. Despite these problems, prescient U.S. companies such as GE have done business in India for decades and are positioned to help India build the Smart Grid.

Without a SMART GRID in place first, India energy security plans have no meaning, and implementing a SMART GRID should be viewed as an investment in renewable energy technology in itself.

2. THE IMPACT OF THE US-INDIA 123 AGREEMENT ON ALTERNATIVE ENERGY.
With the exception of Hydro Electric and Coal, power from non conventional sources like wind and solar amount to barely 1% of the total power sources.

The water shed event has changed the landscape in was the unanimous lifting of sanction for Nuclear Trade by the NSG towards India following India’s parliament ratifying the 123 Agreement with India between July-September 2008. Cynical Indian power players have not factored this sudden development into their growth plans. These players have invested heavily in hydel, coal (thermal) and other forms of conventional energy and of course some non conventional energy like wind farm and solar.

Some analysts have listed some reasons to avoid non conventional sources of energy like solar, wind or bio fuels, (i) when the wind stops blowing and the sun does not shine, where do we get the power from? (ii) Further, the cost of power from these sources is 2 to 5 times the cost of power from conventional sources. Will bankrupt state utilities opt for these sources in their mix? (iii) Carbon credits justify the additionality argument that bolster the economic case for renewable. But India’s CDM market whilst quite large by the numbers of projects, each project is small and fragmented and promoters cannot/will not compete on price that China’s large projects bring to the Carbon markets.

This recent development of the 123 civil Nuclear Agreement with the US is having promoters and investors relook at India’s power games. The growth of Nuclear and could bury attempts by local entrepreneurs in wind and other non-conventional sources of energy unless. Renewable energy sources around 1% of the total production and this 1% will round down in the decimals in India’s new power calculus. I dare posit that the gradual shift to Nuclear may imply reduction or orphaning non conventional sources that we listed earlier

WILL URANIUM BE THE NEW CARBON? ©
Not so fast. India nuclear prowess in energy and nuclear weapon delivery is mature enough to be taken seriously by the US and other recognized nuclear power states. India’s record and standards of non proliferation are higher than what the NPT demands or what the US, France. China and others employ. To ask India to sign the NPT would require India falling to the standards of proliferating countries that sit comfortably in the UN Security Council. This is not said in jest. India only lacks is a steady source of Uranium and latest civil nuclear technologies.
But Nuclear Energy is not cheap and at current levels of costs and lack of high capacity evacuation lines make it un-bankable. But nuclear energy is totally clean. And that is why investors and India are eyeing Carbon credits to slingshot the additionality argument to justify its economics.

Some analyst indicated that one MW of nuclear energy could deliver upto 50,000 CERs!!! Critics may argue that this is stretching the argument and perhaps being specious. Really? If it displaces tones of C02 from coal fired thermal power and saves Billions of USD in ecological and environmental damages from large hydel (large hydel has very long gestation periods) this is not a stretch. At the current argument of 4,500 CER for new hydel per MW, the cost substitution for thermal and large hydel can be multiple times the investment in nuclear. India is currently (circa August 2008) around 150,000 MW deficient in power.

Let’s go with 10,000 CERs per MW for nuclear energy. If new Nuclear Energy in the next 10 years produces 25,000 MW of power per annum it could generate USD 2.5bn to 12.5Bn in CERs at € 10 per CER.

Still smarting from Australia’s insult by refusing to supply uranium till India signs the NPT, chatter indicates that India is now strategizing to link real trade with nuclear trade. The Indians are lining up loyal suppliers and this will take time.

Once the 123 Nuclear Agreement is ratified by the US Congress, the Economic interests and the Ecological argument will collide dramatically in India’s Civil Nuclear Power game. The Americans and the Indians will be in pole position to gain this bilateral advantage, through their Nuclear Engagement if they can combine Civil Nuclear Energy economics and Carbon Offsets into bankable structures that go beyond 2012.