International sanctions were imposed on India after its peaceful nuclear test of 1974. The India-United States civil nuclear deal, which was signed in 2008, ended the restrictions on the import of uranium and of nuclear power plants, with some critical exceptions. The free import of natural uranium has enabled India to grow its nuclear programme. Negotiations with major western nuclear power plant suppliers were started but had to be given up as their plants were far too expensive.

Homegrown nuclear advantage

Sanctions forced India to innovate. Every part going into India’s nuclear plants was designed, developed, tested, and manufactured in India in patient partnerships between the Atomic Energy Commission (AEC) and Indian firms. The unit size of India’s nuclear power plants went up from 200 MW to 500 MW. Now, 700 MW units have been developed. Four units are under construction and another 10 are being developed. India now makes the cheapest nuclear power plants in the world, costing approximately $1,700 per Kw. The South Korean plants cost more, around $2,200 per Kw, the French over $5,500 per kw, and the U.S. $15,000 per Kw. Therefore, India has the potential to become a major exporter of nuclear power plants.

With such a clear cost advantage and self-reliance, reports of plans to import nuclear power plants and technology indicate insufficient awareness of India’s own capabilities and price competitiveness. The size of India’s potential market for nuclear energy is so large that it would be rational for international suppliers to do whatever it takes to get a substantial share of this market. But would that be the optimum choice for India if costs are much higher or if it creates a new stream of technological vulnerability?

At this time, India has further strengthened its leadership in technology as its 500 MW commercial fast breeder reactor is getting commissioned after overcoming many difficult challenges. Today, India makes Pressurised Heavy Water Reactors (PHWR), which use natural uranium as fuel. The Light Water Reactors (LWRs) use enriched uranium as fuel and are based on uranium enrichment technology which is more widely used in the world. India should try and develop its own LWRs, specially as the Nuclear Suppliers Group waiver permanently prohibits the transfer of enrichment and reprocessing technology to India. This should not be beyond India’s capabilities, given sufficient resources and a dedicated programme.

Scaling up, staying self-reliant

The government has decided that by 2047, India will develop 100 GW of nuclear power capacity. To achieve this, the sector has been opened up to new entrants from both the public and private sectors through enabling legislation that is well-crafted and investor-friendly. The price of nuclear power in India is now competitive vis-à-vis thermal power. The use of the proven, cost-competitive domestic technology by new entrants would be the ideal cost-effective way to scale up. A large programme has scale effects resulting in lower production costs. Further, new entrants could potentially reduce project execution costs and time. Bringing in technology streams and equipment which will give India far more expensive electricity should not merit serious consideration.

To meet the enormous dedicated power demands of artificial intelligence data centres, small modular reactors (SMRs) are being considered as a solution in the West. However, the designs remain under development, with commercial deployment yet to begin. The AEC has offered its technology for 200 MW nuclear plants to new entrants. Smaller unit sizes to suit emerging market needs can also be developed domestically in partnership between the AEC and Indian firms. The market for SMRs in India would be a bilateral contractual matter between the generator and buyer. From a regulatory perspective, there would be merit in taking the view that a foreign-designed SMR plant should have operated satisfactorily for a few years before being deployed in India. There would be little justification for an untested SMR being developed elsewhere being first deployed, experimentally, in India.

Ambition needs caution

Given the critical importance of ensuring the safety of nuclear power plants, it would be prudent that new players establish themselves before scaling up. India’s record on safety in its nuclear plants has been exemplary till now. This must be preserved going forward. This will be a major challenge amid rapid expansion and the entry of new players, given the prevailing industrial culture in India, where accidents at construction sites and operating industrial plants continue to occur.

A single nuclear mishap could trigger a strong public backlash, similar to the one experienced by the West after Chernobyl (1986), which led to nuclear power development coming to a virtual standstill in many western countries. It would, therefore, be prudent for new entrants to initially develop only a few plants and establish the rigorous internal safety culture required for nuclear facilities, subject to continuous external auditing. Scaling up can thereafter take place gradually, without needlessly risking safety. The goal of achieving 100 GW of capacity by 2047 could be achieved safely while also strengthening self-reliance within India and enabling the country to become a globally competitive player.

Meera Shankar is former Indian Ambassador to the United States; Ajay Shankar is Distinguished Fellow, TERI, and former Secretary, Department of Industrial Policy and Promotion (DIPP), Government of India