India's energy future: Small modular reactors need strong policy backing

There is a new kid on the block — the small modular nuclear reactor or SMR — and it has the potential to overhaul India’s energy landscape.  However, the way things work, much needs to be done before India can roll out a comprehensive SMR-based power generation programme. 

 

But first, the context.  Going forward, India will need to double its electricity generation every eight to 10 years. While conventional renewable energy (RE) generation is now cheap, storage is not. Moreover, RE in the form of wind and solar is heavily impacted by seasonal and daily cycles, as well as weather-related unpredictability. Therefore, India has no choice but to diversify into other non-fossil generating sources. Diversification no doubt reduces the riskiness and volatility of power availability, but if done smartly, can also reduce the costs of power generation. Of the other energy sources, geothermal and tidal are too nascent, and biofuels are too costly.  Greater generation of nuclear power, therefore, makes eminent sense.  The fact that it is consistent and available 24x7 addresses the storage problem, further adding to its attractiveness. 

 

However, the problem with a large nuclear power plant is that it takes time to build — almost a decade to construct—needs a lot of land, and requires many precautions from the building stage onward.  Enter the sub-300Mw nuclear solution.  A combination of technological changes and rationalisation of regulations has made sub-300 Mw units a viable energy option.  With lower costs and size, the potential for a greater number of operational units has increased. This, in turn, has enabled nuclear power plant suppliers to innovate by modularising these units, building them elsewhere, and transporting them to the operational location.  If they do so, costs can go down further due to economies of scale.  Much more importantly, these units can now be put up in 3-4 years, as opposed to a decade that larger units take.  Furthermore, technological innovations have reduced the amount of land required for such units to reportedly between 10 and 20 acres, an area significantly smaller than that needed for a comparably sized coal-based thermal or solar plant.

 

 Most importantly, two additional features make them much more attractive than before — with passive safety features in their design, they are considered far safer, and being smaller, they have a lower nuclear exclusivity zone.  Passive safety essentially means in case of a mishap, safety features that are built in and operate without any external input or intervention are able to contain the problem.  Given these characteristics , they could also be easily placed in closed thermal power units, benefitting from the power distribution and other infrastructure already in place, further reducing setup time and costs.

 

And, therefore, there are three key advantages — Lesser space, earlier completion, and greater safety; and all of these translate to relatively low costs.  Given all these advantages, you would think India would have rapidly scaled up its nuclear power ambition through the SMR route.  But it has not — at least, not yet.

 

There are two broad routes that India can take: The first is to develop its own SMRs, and the second is to tie up with global suppliers.   First, consider the domestic option.  India has long been scaling up its domestic capabilities, and while recent focus has been on the 700 Mw capacity, it is the 220 Mw Pressurised Heavy Water Reactor (PHWR) where India has significant experience.  More importantly, if India could scale down viable options to below 100 Mw, many other industrial applications would also become feasible, further speeding up the country’s transition to a zero-carbon future.  A mission mode approach is required to make pre-existing Indian PHWR technology suitable for what the future requires. 

 

The greatest challenge is whether India’s incumbent nuclear establishment would be able to deliver in a timely manner.  If the past is any indication, delays are endemic in this space and waiting another decade will be detrimental.   Take the case of the 700 Mw reactor, for which an additional 10 units were planned in 2017 to be set up under the “fleet mode” approach, implying a reduced setup time of five years — an outcome that did not materialise as envisaged. Though India’s nuclear establishment has been quite successful with safety and operational efficiency parameters, unfortunately, the same cannot be said for its timeliness.  Historically, one could have blamed external sanctions to have constrained innovation and growth, but not in recent times.  In other words, it is now critical to allocate appropriate financial, technical and managerial resources to enhance the speed of innovation for India’s sub-220 Mw play. 

 

Next, consider the second route of embracing internationally available SMR technology. Firms from many countries, including those from Korea, the US, Russia, and several European nations, are reportedly interested in participating in this opportunity in India. At the same time, many private and public sector entities in India could also be interested, including industries such as steel plants, data centres, clean hydrogen producers, and, of course, for power generation. However, the Atomic Energy Act of 1962 only allows the Nuclear Power Corporation of India Limited (NPCIL) to operate nuclear power plants.  This will need to change, and other regulatory and enabling institutions will also need to be tweaked, improved and their ambit better defined. 

 

Crucially, the Civil Liability for Nuclear Damage (CLND) Act, 2010, will need to be changed to better align with the needs of smaller nuclear units. The law currently specifies a liability of Rs 1,500 crore on the operator. Given that SMRs are smaller units, this liability is significantly disproportional to their size and, therefore, not insurable.  Secondly, the larger problem with CLND is the potential for unlimited liability on suppliers, which has been a long-standing problem for nuclear equipment vendors.  Third, there are some reported ambiguities related to criminal liability that need to be addressed. 

 

The current nuclear establishment in India was set up under the public sector, and therefore a range of other regulatory and oversight mechanisms will need to be changed to address potential private sector participation.  These changes include enhancing the role of the Atomic Energy Regulatory Board (AERB), which needs to have regulatory authority over both private and public sector entities and should also be organisationally strengthened. Moreover, many safety practices would also need to be institutionalised with deep monitoring, regulatory and enforcement capacities, especially in the decommissioning and radioactive waste disposal domains.

 

Finally, the SMR is a great innovation and highly suitable for India, provided the right policy, organisational, regulatory, and oversight mechanisms are in place and open to domestic innovation while embracing global technology.  Both domestic innovation and international technology transfer routes are feasible, and fortunately, they are not mutually exclusive.

 

The author heads the Centre for Social and Economic Progress