GS Paper: GS2

Mentor’s Comment

The Government has opened India’s nuclear sector to public and private entrants, targeting 100 GW of nuclear capacity by 2047. This expansion has revived the debate on whether India should scale up using its own cost-competitive, indigenously developed reactor technology or turn to costlier foreign technology and untested small modular reactors (SMRs).

Why did India’s nuclear programme become self-reliant instead of import-dependent?

1. Sanctions after 1974: International sanctions followed India’s peaceful nuclear test of 1974, cutting off external technology and material supply.
2. Partial opening in 2008: The India-United States civil nuclear deal ended restrictions on uranium and nuclear plant imports, but retained critical exceptions.
3. Failed import route: Negotiations with major western nuclear plant suppliers were abandoned because their plants were far too expensive.
4. AEC-industry partnership model: Every component of India’s nuclear plants was designed, developed, tested, and manufactured domestically through partnerships between the Atomic Energy Commission (AEC) and Indian firms.
5. Capacity growth: Unit size rose from 220 MW to 500 MW, and 700 MW units are now operational; four units are under construction and ten more are being developed.
6. Cost leadership: India’s nuclear plants now cost approximately $1,700 per kW, the cheapest in the world.

Does India’s technological self-reliance weaken the case for importing foreign nuclear technology?

1. Import proposals reflect a knowledge gap: Reports of plans to import nuclear power plants and technology indicate insufficient awareness of India’s own capabilities and price competitiveness.
2. Market size does not equal optimal choice: India’s large potential nuclear market gives foreign suppliers a strong incentive to compete for a share of it, but supplier interest is not the same as national interest.
3. Cost risk of importing: Importing technology at costs far higher than India’s domestic $1,700 per kW benchmark would erode the existing cost advantage.
4. Technological vulnerability risk: Reliance on imported technology could create a new stream of dependence on foreign suppliers, reversing decades of self-reliance built after 1974.

What technological path can deepen India’s self-reliance further?

1. Fast Breeder Reactor (FBR) milestone: India’s 500 MW commercial fast breeder reactor is nearing commissioning after overcoming significant technical challenges.
2. Current mainstay technology: India presently builds Pressurised Heavy Water Reactors (PHWR), which use natural uranium as fuel.
3. Global mainstream technology: Light Water Reactors (LWR) use enriched uranium and are based on uranium enrichment technology, which is more widely used internationally than the PHWR route.
4. Nuclear Suppliers Group (NSG) waiver constraint: NSG waiver was the 2008 exemption permitting India nuclear trade despite being outside the Non-Proliferation Treaty. This waiver permanently prohibits the transfer of enrichment and reprocessing technology to India.
5. Case for indigenous LWR development: India should build its own LWR capability given adequate resources and a dedicated programme, rather than depend on a technology transfer route that is permanently closed.

What is India’s institutional plan to scale nuclear capacity to 100 GW by 2047?

1. 2047 target: The Government has decided that India will develop 100 GW of nuclear power capacity by 2047.
2. Sector opened to new entrants: Both public and private sector players can now enter nuclear power generation.
3. Enabling legislation: The Government has enacted legislation to open the sector that is described as well-crafted and investor-friendly.
4. AEC technology-sharing for new entrants: The AEC has offered its 200 MW nuclear plant technology to new entrants.
5. Smaller unit development: Smaller reactor unit sizes suited to emerging market needs can also be developed domestically through AEC-Indian firm partnerships.
6. SMR market structure: Small Modular Reactors (SMRs): compact nuclear reactors, typically under 300 MW, designed for faster deployment than conventional plants. The Indian SMR market would function as a bilateral contractual matter between generator and buyer.

Is scaling through domestic technology more feasible than importing small modular reactors?

1. Price competitiveness achieved: Nuclear power in India is now price-competitive against thermal power.
2. Scale economies favour domestic technology: A large domestic programme has scale effects that lower production costs further as it expands.
3. Execution gains from new entrants: New entrants using proven domestic technology could reduce project execution costs and time.
4. Imported technology raises costs: Bringing in foreign technology streams and equipment that produce far more expensive electricity does not merit serious consideration.
5. SMRs remain unproven globally: Western SMR designs remain under development, with commercial deployment yet to begin, despite being proposed as a solution for the power demands of artificial intelligence data centres.
6. Regulatory caution on foreign SMRs: A foreign-designed SMR should have operated satisfactorily for a few years elsewhere before deployment in India; there is little justification for deploying an untested SMR in India experimentally.

What do international cost and safety examples show for India’s nuclear expansion?

1. South Korea (cost benchmark): South Korean nuclear plants cost around $2,200 per kW, higher than India’s $1,700 per kW despite South Korea’s mature nuclear industry.
2. France (mature-economy cost escalation): French nuclear plants cost over $5,500 per kW, reflecting higher costs even in a country with a long-established nuclear programme.
3. United States (highest-cost comparator): US nuclear plants cost $15,000 per kW, the highest among the countries compared, underlining India’s relative cost advantage.
4. Chernobyl, USSR (1986) (safety-incident precedent): A single nuclear accident at Chernobyl triggered strong public backlash across the West, bringing nuclear power development to a virtual standstill in many western countries for decades. This is the specific precedent cited as the safety risk India’s new entrants must guard against.

Why must India’s nuclear expansion prioritise safety culture over speed?

1. Exemplary record at stake: India’s record on nuclear plant safety has been exemplary till now, and this must be preserved as expansion proceeds.
2. Industrial safety culture risk: Rapid expansion and the entry of new players is a major challenge given India’s prevailing industrial culture, where accidents at construction sites and operating industrial plants continue to occur.
3. Backlash risk from a single mishap: A single nuclear mishap could trigger a strong public backlash similar to the post-Chernobyl reaction in the West, capable of stalling India’s nuclear programme.
4. Recommended sequencing for new entrants: New entrants should initially develop only a few plants and establish a rigorous internal safety culture, subject to continuous external auditing, before scaling up.
5. Gradual scaling preserves both goals: Scaling up can then take place gradually, without needlessly risking safety, while still working toward the 100 GW target by 2047.

Conclusion

India’s cost and technological self-reliance in nuclear power, built through decades of AEC-industry partnership after the 1974 sanctions, gives it little reason to import costlier foreign reactor technology or untested SMRs as it opens the sector to new entrants. The unresolved question is whether India’s weak general industrial safety culture can be reformed fast enough to match the pace of an expansion aiming for 100 GW by 2047; the article’s recommendation is that new entrants build a proven internal safety culture on a few plants first, scaling gradually rather than aggressively, so that self-reliance and safety are not sacrificed for speed.