Brahma Chellaney: India's nuclear industry deserves a place in the sun
New Delhi has chosen the right time to throw its reactor-builders a lifeline
The Indian government recently approved the construction of 10 commercial nuclear power reactors of indigenous design, initiating the largest nuclear building program in the world since the 2011 Fukushima disaster in Japan. The global nuclear power industry is still reeling from that calamity: Just three of Japan's 42 reactors are currently operating, while France -- the poster child for nuclear power -- plans to cut its reliance on atomic energy significantly.
New nuclear power has become increasingly uneconomical in the West, in part because of rapidly spiraling plant-construction costs, prompting the U.S. and France to push reactor exports aggressively, including to "nuclear newcomers" such as the cash-laden oil and gas sheikhdoms of the Arabian peninsula. Still, the bulk of the new reactors under construction or planned worldwide are located in just four countries -- China, Russia, South Korea and India.
The Indian decision to turn to a "fully homegrown initiative" reflects the continuing problems in implementing a 2005 agreement on nuclear power with the U.S. Nine years after the U.S. Congress ratified the landmark deal, commercialization is still not within sight.
India, duped by its own hype over the nuclear deal, had announced plans to import reactors costing tens of billions of dollars from two U.S.-based vendors, Westinghouse Electric and GE Hitachi Nuclear Energy, and France's state-owned Areva. The Indian plans helped motivate Toshiba to acquire Westinghouse -- a takeover that ultimately proved a huge blunder, plunging Toshiba into a grave financial crisis. Westinghouse filed for bankruptcy protection in March.
FADING PROMISE Having invested considerable political capital in the vaunted nuclear deal with the U.S., India today confronts an embarrassing situation: The nuclear power promise is fading globally before New Delhi has signed a single reactor contract as part of that deal. To save face, India, with one of the world's oldest nuclear energy programs, has embarked on a major expansion of domestically designed reactors.
The monumental nature of the decision to construct 10 reactors with 700 megawatts of capacity each is underscored by the fact that the total size of these units surpasses the current installed nuclear generating capacity in the country. India has 22 nuclear reactors in operation which produce 6,219MW of electricity. The 10 new reactors will be in addition to seven others already under construction which will have a combined capacity of 5,300MW.
The 10-reactor decision fits well with India's commitment under the Paris climate accord to reduce reliance on fossil fuels. India is committed to cutting the carbon intensity of its economy by about a third by 2030, including by generating 40% of its electricity from non-fossil fuels. The single-minded focus on carbon, however, threatens to exacerbate India's water crisis, given the water-guzzling nature of the energy sector, especially nuclear power.
Moreover, U.S. President Donald Trump's decision to exit the Paris accord has cast unflattering light on the onerous climate-related obligations India has taken on before it has provided electricity to all its citizens. According to a review of global trends by the Netherlands Environmental Assessment Agency, the U.S. produces eight times more carbon dioxide emissions than India on a per capita basis. Under current plans, India will link the last remaining 4,141 villages without power to its electricity grid in 2018, but 24-hour electricity will not be available nationwide to all communities until 2022.
India's decision to ramp up its nuclear power capacity may contribute little to meeting the 2022 goal, given that the time frame for domestic nuclear plant construction averages seven years. But it will yield major economic dividends, including boosting domestic industry and creating thousands of jobs. By providing $11 billion worth of likely manufacturing orders to Indian industry, the 10-reactor decision will help to transform the domestic nuclear industry, according to Prime Minister Narendra Modi.
By contrast, had India relied primarily on imports of Western reactors to accelerate new capacity additions, the financial costs would have been substantially higher, without tangible benefits accruing to domestic industry. India is already a top weapons importer. Reliance on Western reactors would have made it the world's largest importer of nuclear power plants -- a double whammy for Indian taxpayers, especially given that the country is the only major Asian economy that is import-dependent rather than export driven.
In this light, the travails of the nuclear deal with the U.S. may be a blessing in disguise for India. But for the serious financial woes of Westinghouse, GE Hitachi and Areva -- each of which was to build a cluster of reactors at a separate Indian park -- Indian taxpayers would have been potentially saddled with plants like Areva's reactor project in Finland, which is currently almost a decade behind schedule and billions of euros over budget.
RIGHTFUL PLACE To be sure, a dispute with Western suppliers over nuclear accident liability also put a brake on India's reactor-import plans. After India's 2010 legislation put off foreign reactor vendors by giving plant operators the right of recourse against equipment suppliers in the event of a nuclear accident resulting from substandard equipment or material, New Delhi established a nuclear insurance pool in 2016 to extend protection to suppliers. By then, however, the global nuclear power scene had fundamentally changed due to the impact of the Fukushima disaster.
Nuclear power may be on a downward trajectory globally, yet it has earned a rightful place in India's energy mix. The country's domestic nuclear power industry, without technological assistance from overseas, has done a good job in beating the mean global plant-construction time frame and in producing electricity at a price that is the envy of Western reactor vendors. As a result, power from domestic reactor models is competitive with cheap coal-fired electricity. By contrast, in the U.S., where five reactor closures have been announced since 2013, utilities are seeking greater state subsidies to keep other nuclear plants operating.
By expanding construction of its own reactor models, India is also laying the base for its emergence as a reactor exporter. Compared with the larger reactors of Westinghouse, GE Hitachi and Areva, India's midsize models are better suited for developing countries, considering their grid limitations.
India may still buy some Western reactors, but the latest decision clearly signals that its focus will be on building its own. It has taken 12 years for Indian hype over the nuclear deal to give way to sober realism. The inward turn reaffirms India's embrace of a zero-carbon power source and underscores its faith in the likely advent of commercially attractive reactors based not on uranium -- a resource it lacks -- but on thorium, which it has in plenty.
Brahma Chellaney is a geostrategist and the author of nine books, including the award-winning "Water, Peace, and War."