|Far from Chernobyl|
|Tuesday, 15 March 2011 00:00|
Given the uncertainty over the extent of the damage to and by the Japanese nuclear plants, it’s not surprising that both large insurance firms Munich Re and Hannover Re have been downgraded by various analysts. Indeed, Malaysia, which was planning to set up nuclear power plants, has now announced it will wait and study the Japanese nuclear accident before taking a final decision on whether to go ahead or not. In India, the head of the Nuclear Power Corporation of India Ltd (NPCIL) told Bloomberg the earthquake-induced accident was a setback to India’s plans to increase its nuclear power capacity 13-fold, and would force a review of the safety of existing plants as well as the regulations for proposed plants. Not surprisingly, shares of French nuclear supplier Areva fell more than 10%, the highest fall in the last two years—Japan accounted for a tenth of Areva sales last year, and lawmakers in many countries have called for reviews of nuclear safety norms. Wait-and-watch is a good idea since, as experts point out, each day without a major release of radiation is an indicator of a good outcome, more so since there is a possibility of another earthquake hitting Japan, though of lower intensity. Monday’s hydrogen blast in one of the units, experts say, was to be expected, but as Japan’s chief cabinet secretary Yukio Edano has said, the inner containment vessel holding the nuclear rods was intact, suggesting the damage would be contained.
While the lessons from Japan will continue to be studied, it’s important to keep in mind that there are technological solutions to each problem that crops up. After 9/11, some nuclear suppliers are designing plants to withstand an aircraft crashing into the dome; Areva claims its latest generation of plants have a special area to collect the residue in case of a 3-Mile type accident where the core melts; Areva’s latest reactors also have an extra inner-lining of steel across the reactor to ensure, in case of a blast, as in Chernobyl, it gets contained within the dome. The costs of such changes will be high, and certainly the protocols established will need to be changed to take into account all new possibilities. Instead of knee-jerk reactions to the Japanese crisis, it would be more mature to study the new developments, examine how the nuclear industry plans to react to them, and perhaps raise the bar on the new standards plants must adhere to. Much will almost certainly be made in India, in time to come, about suppliers’ liability. Any increase in liability levels will have to be weighed against whether it keeps major players from entering the business. What is more important is to ensure the nuclear regulator has enough expertise and teeth to ensure plants run according to exacting standards.