Australia India nuclear power deal and Pakistan


The power issue is at the center stage of debate. Almost every country is shaping up its energy policy to meet its growing power needs. So are Pakistan and India. Australia and India have agreed in principle on nuclear energy co-operation deal. And if everything goes as planned, Australia would begin exporting uranium to India in less than two year time. Australia has got 40 per cent of the world uranium deposits and is gearing up its exploration to capitalize on the growing Asian energy market. On other hand the nuclear capable Pakistan, faced with acute power shortage, is watching all this from sidelines with a pinch of salt and with no clear-cut roadmap in hand to handle the crises.

India, the rising economic power, has outlined an ambitious plan to increase its power generation from nuclear energy to 25% by 2050. Currently both India and Pakistan are producing about 3 per cent of their total electricity from nuclear reactors. The rest comes from thermal, hydel and other renewable energy sources. By the year 2020, India has planned to increase its nuclear power production to 20,000 mw (9%), which would be equivalent to the total power generation production of Pakistan.

Luck smiled on India when the 46 members Nuclear Suppliers Group waived sanctions against it in September 2008. The US played a vital role in it. Since then India despite not being a signatory to non-proliferation treaty never looked back and signed a series of nuclear pacts with host of countries including US, France, UK, Canada, South Korea, Kazakhstan, Australia, Japan etc. Previously Russia was the major supplier of nuclear fuel to India. India has taken a firm decision and is flying high. And the decision is to go big for nuclear energy irrespective of the concerns being showed by some of its quarters against the harmful effects of nuclear energy. Under the treaty signed with US in 2008, India is now allowed to commence nuclear trade with other countries.

Pakistan, a country of 180 million people and confronted with prolong blackouts ranging from 10 to 18 hours a day, is increasingly singled out on nuclear energy front. Like India, Pakistan is also not a signatory to NPT. Yet the world nuclear powers except China are not ready to apply same yardstick to Islamabad. Of all the nuclear and uranium rich countries, China is the only one actively supporting Pakistan civil nuclear reactors. The rest are selling uranium fuel to Pakistan’s immediate nuclear neighbors India and China but discriminating it for one reason or another. Pakistan has, however, been desperately trying to secure a civil nuclear energy deal with US, France, Japan, or Australia on the patron of India. But it has not been successful so far and only relying on its time tested friend China. The Atomic Energy Commission of Pakistan has envisaged increasing its power production from nuclear reactors to 8500 mw by 2025 by building three more power plants.

Internally the current power crisis in Pakistan is rooted in its institutional policy failure. Pakistan is endowed with diverse natural resources including water, coal, wind, solar etc. But thanks to the successive military and civil governments these resources remain undeveloped. Islamabad has always been pre-occupied with volatile issues like Afghan war, terrorism, Kashmir etc. As a result like other social sector’s issues including education, health, unemployment, inflation etc. the energy sector has never been its priority. Resultantly plunging the country into hours-long power outage. It is, however, a stark reality that when you turn the switch on you need power. Power for your factories, offices and houses. Without power the economy doesn’t move and the life comes to a grinding halt.

The resource rich Pakistan, which source 31 per cent electricity from cheap hydropower plants, did not capitalize on its water resources. Initial feasibility studies conducted by different engineering firms of both public and private sectors have identified a series of sites for small, medium and large water reservoirs on Indus, Kabul, Neelum, Swat and Chitral rivers with the potential of 45,000 mw capacity. But thanks to the Punjab dominated WAPDA, a main electricity body of the government, it remained stuck to the building of Kalabagh dam reservoir, a highly controversial project opposed by rest of the three provinces of Sindh, KP and Baluchistan. Wapda has blinded itself to other mega projects during the past three decades and deprived the country of producing cheap sources of electricity. The past two governments of PML-N also toed the WAPPDA line and mainly focused on developing consensus on Kalabagh. The PML-N, coming to power for third term last month amid severe power crises, looks like to have moved on from the controversial dam and is showing signs to go for other hydel projects and switch over the thermal projects to coal from fuel.

Pakistan generates almost 60 per cent power from thermal projects that are plagued with corruption. Most of these costly projects were developed in the past two governments of PPP. A major chunk of Pakistan imported oil fuels is being consumed by these thermal projects, trapping the country in a quagmire of $5 billion circular debt. It is considered a white elephant on the national economy. The present PML-N government has always been a strong opponent of the thermal projects. The Past two military governments, ruling Pakistan for almost 17 years, completely neglected the power sector. Pakistan has also got huge reserves of coal in Sindh and Baluchistan, which are yet to be exploited. Currently it is producing less than 1 per cent power from coal, which is almost equal to none. It has also started sourcing electricity from wind turbines and solar. But it is considered too little too late.

Given the poor financial situation of Pakistan, it can not afford to sustain its power production on fuel in the long run. Countries like Australia and India generates 80 per cent and 60 per cent of their power from coal respectively. The other cheap sources for power are hydel, nuclear and wind turbines. Although, the initial project cost of these is higher but the operating cost is regarded much cheaper. Putting the environmental concerns aside, the nuclear power energy is further considered cheaper in term of running cost. France at the moment produces 80 per cent of its electricity through nuclear plants followed by US 20 per cent.

Australia that possesses almost one third of the world uranium deposits does not produce any electricity from nuclear energy. It was planning to build a nuclear power plant on NSW border region few years back. But it was mainly dropped due to the Fukushima earthquake incident in mar 2011 at Japan. Japan is now back on board and has reportedly dropped its plans of abandoning the nuclear energy plants. The debate is again gaining momentum and there is a strong lobby that Australia instead of exporting raw uranium should start selling nuclear energy to Asian market.

The Uranium exploration story in Australia is a unique one. Its investment has gone from $20 million in 2003-04 to $200 million in 2013. It exports 9000 tons a year (19 % of global exports) and projects the nuclear deposits could last for 177 years in its national energy policy. Presently the uranium exploration is allowed only in western Australia, South Australia and Northern region. A ban is still in place in the mainland states – NSW (Sydney), Victoria (Melbourne) and Queensland (Brisbane). Australian uranium is used in civilian nuclear power reactors in US, Japan, France, Britain, Finland, South Korea, China, Belgium, Spain, Canada and Taiwan. Australia has also got three-time lower cost than other countries.

There are 65 nuclear reactors under construction the world over. Two third of these are in Asia. And the existing power generating units require 66000 tons uranium against the 55000 tons global production. Australia is mobilizing all its resources to meet the shortfall and growing future needs of the world market. Australia does not want to lag behind and is taking steps to enhance its export from 19 per cent to its full capacity of 40 per cent in the coming years. It is well aware of the significance of the growing Asian energy market mainly driven by the booming economies of China and India.

What the future holds for Islamabad on nuclear energy horizon side is not yet known. But the PML government, which has just assumed power needs to come out of slumber, firm up an aggressive energy policy and set its short and long terms goals right. India had linked its case to China and managed to convince the world for nuclear energy deals without signing NPT. Pakistan needs to add some more weights to its case that it should not be subjected to discriminatory treatment as both its nuclear neighbors India and China are being supplied uranium. Pakistan has already behaved responsibly for long and the AQ khan case should be treated as past and closed transaction. Pakistan cannot be blamed on AQ khan network forever and denied the civil energy deal.

At the same time Pakistan should also take all out efforts to establish its writ on its territory specially Pak –Afghan border. No country in the world could tolerate a state with in a state from rogue elements and the same applies to Pakistan too. At the moment Australia and India are working on steps to put enough safeguards in place that the uranium it would export is exclusively used for power generation purpose and is not diverted for any other purposes. The same will apply to Pakistan whenever it comes on board in future. But the route to Australian uranium market comes through US. Once America is on board, the rest will follow.

Minagul Naeem is Centreline and DNA correspondent in Australia. He can be reached Email: [email protected]