Enabling conditions for nuclear energy

Five areas of foundational policy work that would make possible nuclear power generation

- AJAY SHAH & AKSHAY JAITLY

In India we tend to assume that anything to do with outer space is done by governments. But some of the best global knowledge on space travel is in private firms like SpaceX. Once the private sector gets going, it brings energy and innovation of a quality that is not found in state organisations. And so it is with nuclear energy. Private firms now build the safest, lowest-cost and most innovative nuclear reactors of the world. At the time of the Indo-United States nuclear deal, it was clear the big generation plants that could be imported from France, Japan, and the United States had important attractions. In recent weeks, Google and Meta have placed orders for "small modular reactors" (SMRs), 50-Mw captive power plants, from private firms.

We do not wish to be central planners. Nor do we wish to be great leaders that will choose for India. Indian energy policy should create conditions where private firms may consider whether it is optimal for them to buy such equipment.

How might this be achieved? What elements of the policy environment are required so that this field can evolve sensibly? This is a field that contains market failure. The usual toolkit of public economics should be trotted out: To understand the market failure, and to envision policy pathways feasible under Indian conditions of state capability, which impose low costs upon the people. Alongside this, there is a need to remove restrictions that have no connection with market failure. The work programme for policymakers lies in five elements.

1. If a private person in India wishes to buy a nuclear reactor from a foreign vendor, there should be no import restriction or customs duties that interfere in the transaction, subject to security restrictions upon the operator.