Does nuclear power have a role in our climate change strategy

Source: The post is based on the article “Does nuclear power have a role in our climate change strategy?” published in the Livemint on 4th May 2023.

Syllabus: GS – 3: Energy.

Relevance: About developing nuclear energy.

News: The threat of climate change has prompted much-needed action to expand capacity in renewable energy (RE) generation. This includes not only wind and solar but also from nuclear.

What is Nuclear Energy, and What is the scenario of Nuclear Energy in India?

What are the advantages of nuclear power?

a) It neither emits CO2 nor creates air pollution, b) Unlike other RE which is intermittent, presenting challenges for grid management, nuclear power provides a steady supply.

What are the challenges in developing nuclear energy?

Firstly, safety and high costs are one of the big concerns. For instance,

-The Central Electricity Authority recently estimated the capital cost of nuclear power plants at 2.5 times that of coal-based plants.

Note: Coal-based power appears relatively cheaper if one disregards its high social costs on account of CO2 emissions and also air pollution. The International Monetary Fund recommends a minimum of $25 per tonne CO2 tax. This would raise the costs of coal-based power in India by at least 50%.

–Introducing storage batteries at grid scale would at least double the cost of RE in the foreseeable future. The storage costs will decline as grid-scale batteries get cheaper.

Secondly, nuclear power stations in India can only be run by public sector undertakings (PSUs). This gives Nuclear Power Corp of India Ltd (NPCIL) a monopoly and its record on meeting targets is poor.

What should be done to develop nuclear energy?

Increase the target: The UK, South Korea and even Japan—the site of the 2011 Fukushima accident—are planning to increase the share of nuclear power in their electricity mix. China is targeting a 10% share of nuclear power in its energy mix by 2035. So, India should scale up nuclear power beyond its current 3% share (6.8GW today) of total electricity in India. India’s current target is only to have 22.5GW capacity by 2031, this should be expanded to at least 10%.

Allow competition: India should end the monopoly of NPCIL and allow new entrants, with new capabilities and management cultures. This could help reduce implementation times and thereby also lower costs.

Recently, the government announced that National Thermal Power Corp (NTPC) and NPCIL will set up 4.2GW of combined nuclear power capacity at two sites in India by 2035. This is a welcome move. This should be expanded to private players also along with strong institutional arrangements and the establishment of independent regulatory authority.

Private participation depends largely on policy stability and regulatory transparency. Initially, the government might allow both NPCIL and NTPC to form Joint Ventures with private companies including foreign companies. This will allow us to explore the possible involvement of French and Japanese firms like South Korea partnered with US firms and commercialized small modular reactors (SMRs).

Increase access to credit and loans: Increasing nuclear capacity will require substantial additional financing from a combination of bilateral official credit and loans from sovereign wealth funds. This can be done through classifying nuclear power as “green”, or at least zero-carbon.

Amend the Civil Liability for Nuclear Damage Act, 2010: The Act is not in line with the current international practice where the liability is strictly limited to the operator and can be covered by insurance (or a public backstop). A review of this legislation is highly desirable before permitting the private players in the nuclear energy sector.

India needs a comprehensive rethink of domestic policy constraints that prevent India from participating fully in nuclear energy sector.