The Nuclear Power Corporation of India (NPCL) announced a sharp drop of 31% in its net profits for the fiscal year ending March 2008. Apart from technical problems at four plants, the main reason cited for the decline in profit is a shortage of uranium, used to fuel the power plants. In fact, power production fell from 18,000 MU in 2006-07 to 16,960 MU in 2007-08 on account of insufficient uranium supplies. This is the situation even when three additional reactors, 17 rather than 14, were in operation last fiscal. According to reports, the average plan load factor (PLF) was down to 60% from 90% the previous year. The 220 mw plants were producing only 150-160 mw to cope with the shortage of fuel supply.
There are only two options with regard to sourcing more fuel?imports and discovering new uranium mines inside the country. Imports continue to be ruled out in the absence of progress on the Indo-US nuclear deal. As has been said ad nauseam, till India gets the deal done, no member of the Nuclear Suppliers Group (NSG) will sell uranium to it. There are reports of trying to source uranium from countries like Niger that are not part of the NSG, but such supply is uncertain and the blunt truth is that there are very few uranium-rich countries outside the NSG. The supply situation in India is bleak as well. The lone uranium processing mill in Jaduguda, Jharkhand, is facing ?teething? problems. There has been little progress on the exploitation of new reserves on account of difficulties in securing environmental clearances. There is also the problem of difficult terrain for mining in places like Meghalaya where reserves are located. The government certainly needs to do more to exploit uranium reserves in India. There is also the issue of royalties. States have been, and continue to be, unhappy about the how they are compensated for being hosts of valuable mineral resources. Frankly, every aspect of the civilian nuclear power programme looks like a mess. This, when thermal power poses carbon footprint questions and when India is under increasing pressure to agree to binding cuts on emissions. The politics of the nuclear deal being more complex than the deal itself, it is really hard to be optimistic about NPCL?s next annual results.