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‘The nuclear liability law is an issue for every supplier, foreign or Indian’

After Chernobyl, Italy decided to stop nuclear power. After Fukushima, German Chancellor Merkel said German reactors would shut by 2020.

Sunil Jain: After Chernobyl, Italy decided to stop nuclear power. After Fukushima, German Chancellor Merkel said German reactors would shut by 2020. And you?re still telling us nuclear power is safe?

Germany and Italy are in a minority. Italy is the only country that discontinued nuclear power overnight. Germany had passed a law in 2001 to phase out nuclear power by 2020, but last year, Chancellor Merkel decided to extend the life of the existing nuclear plants by 8 to 14 years. After Fukushima, she lost a big local election and it was mostly about nuclear policy, so she decided to go back to the earlier policy. Everywhere else in Europe, everybody has taken the decision to go nuclear.

As in India, they are taking another look at safety against not just system failure and human error but also the possibility of the worst combination of external events?Fukushima, as you know, was a combination of the biggest earthquake followed by a tsunami.

Sunil Jain: By how much have you pared down your projections for nuclear power after Fukushima?

Today?s capacity is 375 GW in 440 reactors. Before Fukushima, our guess was this would reach around 700-740 GW by 2030. If you take into account the age of existing reactors and the possible life-extension, it meant that the market for new reactors was almost equivalent to the installed capacity today in terms of gigawatts. After Fukushima, we have lowered the target by a fourth. That does not mean that new/extra reactors will be cancelled, they will be delayed?700 will happen by 2035.

Amitabh Sinha: Is the Indian government more apprehensive post-Fukushima?

The government is asking for more stress tests, a very systematic examination of all the plants.

Amitabh Sinha: What will be the nature of these stress tests?

It will be a new safety examination of the in-depth resistance to a combination of the worst possible external events. The prime responsibility of safety is with the operator. The electricity producer will make studies to show what it will do if a combination of such and such events happen, what is its crisis management, and so on. The Atomic Energy Regulatory Board (AERB) will assess the answers in that case. It is not a test in the usual term. It is new safety assessment and tests against threats that were not fully examined before.

Rakesh Sinha: The Nuclear Suppliers? Group (NSG) has come out with new guidelines, far more stringent than before. Will it impact Areva?s plans for India?

The official communique of the French Embassy after the NSG guidelines says that France has an agreement from 2008 and a bilateral agreement between France and India and at this point, we do not see anything changing. But I am not a government representative. This is purely a governmental matter.

Rakesh Sinha: But these NSG guidelines are far more stringent than before.

NSG has a long evolution of what used to be called as the London Club created in 1974 and over the years, some of the directives have been amended. It?s a process that is continuing. But there was a specific waiver for India, which was agreed in 2008 after long discussions, which is continuing. I am not afraid of big trouble.

Subhomoy Bhattacharjee: How does nuclear power compare with others in terms of costs?

One thing good with nuclear power is that the only thing that will vary with time is the uranium prices. Uranium price accounts for less than 5% of the total generation cost. If you take a combined cycle gas turbine, the gas price is 70% of the cost?if gas prices double, you know what happens. Any comparison you do of costs depends on the assumptions made on how much coal costs will rise, on the cost of carbon credits, and so on. So you can get any answer if you don?t specify your assumptions. In 2010, there was a common review by the international energy agency and nuclear energy agency of OECD and every five years, they make an assessment of future generation costs. The review gives values for Europe, North America and Asia. For Asia, the margin for competitiveness of nuclear was the largest. In France, when we were building the second EPR, we got a cost of 55 Euros per megawatt power versus 70-80 Euros for gas turbine or a modern coal plant.

Raj Kamal Jha: How do you see the German decision to completely shut down nuclear reactors by 2020? What does it mean for Europe given that Germany is now at the heart of the resurgence economy?

It depends from state to state, from land to land. In Germany, Mrs Merkel, just having lost a local election and having to face a general election next year, took this decision to be re-elected. But it is kind of funny because in terms of environment, Germany is not a good example to follow. They are using coal and lignite as the biggest source of electricity. What are the consequences? Germany, being a net importer of electricity, will have to import more power from neighbours, which could be nuclear power and it could be more gas. If it is more gas, gas prices will go up, even in countries that never took the same decision. Germany will increase production of electricity from lignite because lignite is the domestic coal. I don?t think that many countries can afford to take such bad decisions.

Subhomoy Bhattacharjee: After Fukushima, how many countries did you have to talk to on the issue?

I spent a lot of time talking in France. But I have been talking in the UK with no problem at all. From our preliminary examination, there was nothing in the Fukushima accident which should lead us to shut down any nuclear facility in the UK. But of course, we will have to make a deeper investigation with the stress tests. I have been speaking in Hong Kong and India.

Amitabh Sinha: How many reactors do you (Areva) have worldwide?

Around a hundred.

Amitabh Sinha: Areva has presence in both India and China. What percentage of China?s energy requirements can nuclear power meet?

At present, the Chinese have embarked on a very ambitious nuclear programme, but they are more or less just starting. So they have 11 reactors presently in operation. But they have 27 under construction. So it is by far the biggest construction programme presently in the world.

Sunil Jain: By 2030, how much of power that you will produce will be from non nuclear?

Arthur de Montalembert: Right now, the share of renewables is relatively small compared to nuclear. It is a new field of investment for us. We are in a development mode and are growing very fast. Our current order book is beyond a billion Euros. In five years from now, in terms of generation, it will be very significant. Clearly, Areva has two strategic fields of activity?both are non-CO2 emitting.

Sunil Jain: Some months ago, Areva was talking about getting in some private equity players to invest. After Fukushima, how has that plan got affected?

It?s not been affected really. It is still part of the plan. Areva is mostly state owned?87%, of which 75% is owned by the French Atomic Energy Commission and the rest is in private investors? hands. French oil company Total owns 1% and the rest is on the stock exchange. Areva is listed now and the listing happened after Fukushima. The fundamentals are still here, there is still a need for energy, there is still a need to reduce carbon footprint. So there is lot of room for nuclear and renewables.

Sunil Jain: You claim your EPR is designed to resist many of the disasters we?ve seen. Please tell us about them.

EPR was designed in the ?90s, but it was not designed to take care of Fukushima. It was designed to take all the lessons from Three Mile Island accident. The lessons from Three Mile Island accident were incorporated in our latest series of N4 plant. After Chernobyl, EPR was designed to re-solidify the corium within the containment vessel. In the EPR, we have four independent emergency cooling systems, which are located in four different buildings so that no external aggression will put two out of service at the same time and it is four times 100% redundancy because one of the systems in one of the buildings is enough to keep the reactor on safe shut down. If there is a loss of power from the nearby sub-station, we shut down and move on to the secondary connection; if we lose the secondary connection, we move to the emergency diesel. There are four emergency diesel connections and each of them has enough power to keep the reactor under safe shutdown and the emergency diesels are split into two units in two separate buildings which are highly resistant buildings.

We have two different type of diesel generators since there could be a glitch, which would affect diesels of a similar type. All in all, we have six diesel generators and any single one is enough to keep the plant in safe shutdown. There is also a special location within the containment, which is the core spreading area, which is covered with refractory tiles; the heat from the corium when it reaches this area melts steel doors, which allows water, which is already present. This water flows only by gravity. In the end, we are pretty confident that it is a good system and is extensively tested.

Subhomoy Bhattacharjee: India uses FBTR ( in which sodium is used as a coolant.) Do you think sodium should not be used as a coolant?

The Fast Breeder programme started on the basis of French-Indian cooperation. Sodium definitely does have chemical risk of interaction with water, so you have to take this risk when you design the plant. The same is true of the Pressurised Water Reactors (PWRs). It has to be kept under pressure, so you have to design it against lots of pressure. It?s a difference between a pressure cooker and a frying pan. The risks are different?in the pressure cooker, you have to ensure that it does not explode; for the frying pan, you have to ensure that it does not catch fire. While a sodium-cool reactor is a frying pan and PWR is a pressure cooker, good designers should make them safe and it is possible to make them safe.

Sandip Das: For the 100 existing reactors, you use mostly sea water. In Jaitapur, there is a concern that fresh water sources will be used and people will not get water supply. What will be the impact on the fishermen community?

Arthur de Montalembert: You have to have high temperature at one end and low temperature at the other end, or else it will not work. So according to the site, it has to be a big river or the ocean for the cooling. If it is a big river, you have to take into account an additional heat stream to the river in order to protect the fish and the eco-system. If you are in sea water, you have different materials to take into account. But the issue of the sea heating is not a problem. It?s just a marginal issue. So you have solutions according to where you are located. Jaitapur is close to the sea, it is cooled by sea water. In France, nearly two-thirds of the reactors are near the river and one-third on the sea coast. In Jaitapur, as far as drinking water goes, the question will be best answered by NPCIL, which is the operator. As for the water heating, there is a rule of the ministry which says the difference between the released water and the sea-water should not exceed 5 degrees?it is 7 degrees in most countries?and this will obviously be adhered to.

Sudeep Paul: Do you see the liability law pushing up the cost of equipment and construction?

Arthur de Montalembert: We are still waiting for the details of the nuclear civil liability law. As long as we don?t know the details of how it will be implemented, it is very difficult to answer your question. We have to know what is the issue at hand. The international regime for civil nuclear liability channels responsibility on the operator. Therefore, in case of a nuclear accident, it is asserted in the law and you?ll find it in every international convention. On the other hand, the operator has the right of recourse through any supplier. The question is, how will it be implemented, actually, contractually. And that is not known yet. The other question is, how to ensure that such high liability risk can be covered. An insurance pool system has been put in place to take into account such risk for operators. It does not exist for suppliers. So far there is no way to cover that risk. And its cost could come on top of building the reactor. You will have to insure for the second time a risk that is already insured at the level of the operator. So you have a cost over another cost.

Sunil Jain: If India insists that the supplier has to be liable?

The issue is not of Indian operator and foreign supplier. It is an issue for each and every supplier, including Indian.

Sunil Jain: How much of Jaitapur will be Indian?

Arthur de Montalembert: I will say more than 50%.

Transcribed by Sarika Malhotra

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First published on: 31-07-2011 at 01:02 IST
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