Indian Nuclear Plans start to get traction after nuclear liability hurdle gets diluted

The Indian nuclear energy ambitions have not really fructified after a great deal was made out of the USA Indian nuclear agreement in 2009, in which India got exempted from the sanctions after the 1998 nuclear bomb tests. However despite the agreement, nuclear capacity has not really climbed up much in the last 5-6 years. This has been due to a number of factors which are listed below:

• NIMBY protests – Nuclear energy plants have got a bad press due to the antagonism from locals, who do not want a dangerous technology to be built near their homes. The recent nuclear power plant in Tamil Nadu faced massive protests, despite the government and the courts both clearing the plant. There was a protest in Maharashtra as well by locals, who did not want an Areva plant to be built in the state.
• Cost and time overruns – Nuclear plants are facing both time and cost overruns, which are resulting in countries looking at alternative sources. Solar Energy has become the dominant renewable energy source with reducing costs and increasing reach. Nuclear Energy takes almost 7-10 years to set up, as compared to the less than 12 months for a solar power plant. There are no issues in getting nuclear fuel and technology is also not a big problem. However, the massive cost of a nuclear plant is a big issue for the technology nowadays.
• Liability clause – The Indian government has to pass an onerous clause as part of the law, which included unlimited liability on nuclear reactor suppliers. This dissuaded most of the large nuclear equipment suppliers such as Toshiba, GE, Mitsubishi and Areva from investing in India. The current government has diluted the clause by forming a common insurance pool for nuclear disasters, which will persuade the nuclear players to invest in India.

The Indian government is looking to sign up with Westinghouse to buy 6 reactors (AP1000) to set up in Gujarat, while it is giving Russia a site in the southern part of India to set up a nuclear plant. India plans to have 63000 MW of nuclear power capacity by 2032, up from around 5.8 GW now. This is the second largest capacity expansion planned after China. However, the government has mostly focused on solar energy in the last couple of years. Wind, Nuclear and other forms of energy have got a short shrift from the government. This seems to be changing and nuclear should get some growth. Nuclear energy is good from the sense that it provides the balancing power needed for solar energy. Some of India’s companies such as L&T, Godrej etc. which had set up large manufacturing capacities are also facing losses as the nuclear growth does not come about.