Smart Policy for Nuclear Electric Power in India

The Indian cabinet today approved a plan to build a massive 35 GW of nuclear power capacity using domestic nuclear technology and reactors. This is a very smart policy change as it will reduce the reliance on imported reactors and technology for building out India nuclear electric power capacity. Most of India’s 7 GW odd nuclear power capacity has come through using Russian and French technology. Till now, the country was relying on suppliers in the West for supplying this very expensive equipment. However, the country had made a very smart policy change in forcing domestic technology to be used.

Read about Nuclear Energy Advantages & Disadvantages

This will have multiple benefits as compared to using imported technology:

• Create high-end manufacturing jobs in the building out of reactors, turbines and boilers.
• Improve India’s technology base in nuclear power
• Reduce imports and foreign exchange savings
• Help in reducing India’s carbon emissions and meeting India’s global climate change targets
• Possibility of future exports as Indian manufactured products cost competitive

While nuclear power is not the best source of energy in my view, given the huge tail risks of nuclear power plant, India has decided to go ahead as it looks to diversify its energy mix. While solar power has touched new lows of INR 2.44/kWh or 4 cents in India, its intermittent nature means that India will have to add some baseload to balance the high amounts of solar energy flowing into the grid.

India plans to build around 7000 MW of nuclear power capacity over the next 8 years, which will require an investment of $11 billion or around INR 70,000 crores. This plan comes up even as nuclear energy all over the world faces a strong pushback with some countries completely banning nuclear power. Many of the large nuclear equipment companies such as Westinghouse and Areva have collapsed due to huge time and cost overruns. It remains to be seen how Indian companies such as Larsen and Toubro, Kirloskar Brother Limited and Godrej & Boyce are able to perform.

India is most probably going to use the tried and tested PHWR (Pressurized heavy-water reactor) technology for the reactors. India also seems to be learning from the solar industry experience, where almost 90% of the industry is dependent on imports from China and Asia, leaving the domestic manufacturing industry to fight for the crumbs.