India should keep all its nuclear power options in play

Artificial intelligence is power-hungry, and India’s AI ambitions add to the usual demand for electricity associated with economic growth and rising standards of living in a country whose usage per head is only a little more than one-third the global average and one-fifth China’s.

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India is eyeing small modular reactors (SMRs), which promise superior safety at lower cost in comparison with the custom-built reactors we’re accustomed to. SMRs benefit from the efficiency of mass production based on standardized parts. As their components would be factory-built in large numbers and despatched to project sites for relatively quick assembly, these modules will enable rapid capacity addition. While most designs and projects are still works in progress, Russia has an operational one, floating on a barge, and China expects to commission one in 2026.

The idea of FDI in nuclear energy has raised concern on two counts. One is the likely dilution of India’s 2010 law on damages in case of a nuclear accident. The International Atomic Energy Agency (IAEA) supports the Vienna Convention on Civil Liability for Nuclear Damage, which puts the onus for compensation on the plant’s operator. The Indian law, however, places liability on suppliers of equipment as well. This has been a deal-breaker for most global suppliers.

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The IAEA also backs a supplementary convention, under which signed-up countries pool public funds for compensation if the money from operators falls short. But access to such funds is conditional on the national law on compensation being in line with the Vienna Convention. Indian laws must be aligned with this global template before foreign companies can help us scale up nuclear power generation.

While keeping commercial suppliers of equipment on the hook for failures might seem just, its practical purpose is dubious. The fallout of a meltdown could be so severe that it would need the state to compensate victims after the operator and its suppliers are driven to bankruptcy. Also, advances in the financial sector that redistribute risk, such as ‘catastrophe bonds,’ are making the question of picking up the tab easier to grapple with.

The second concern is over private ownership of such risky assets. All new nuclear plants in India are to be placed under IAEA inspections and safeguards as part of a nuclear deal with the US that the Manmohan Singh government staked its survival on to secure. Operational safety and compliance with non-proliferation goals would be supervised by the IAEA as much as India’s own nuclear watchdog. This is adequate.

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Our quest for SMRs, though, must not cloud the fate of our indigenous thorium-based nuclear power programme designed for fuel self-sufficiency. The prototype fast-breeder reactor at Kalpakkam uses a fuel mix that ‘breeds’ more fuel than is consumed. The process creates uranium from thorium, which is available in ilmenite sands on India’s coast, particularly in Kerala and Tamil Nadu. For India’s strategic autonomy in this field, this initiative must proceed apace. 

As a new era of nuclear projects dawns across the world, access to fuel is a key enabler. The security of fuel supplies and safety of spent-fuel disposal are critical aspects too. We must keep all bases covered.