Nuclear Power Is India’s Answer To Trump On Climate

At a Larsen & Toubro Ltd. factory in western India, that makes parts for nuclear power plants, business has been slow. Hoping to profit from government plans to build more reactors in a country where more than 200 million people lack access to electricity, the Mumbai-based construction company opened the plant in 2012. And L&T’s facility in Hazira is running at one-fifth of capacity and most of the projects have gone nowhere. “That’s not the best use of resources,” says Senior Vice President Y.S. Trivedi.

But L&T’s factory could soon be back humming. The two countries would work together to expand India’s largest nuclear power station, Indian Prime Minister Narendra Modi and Russian President Vladimir Putin agreed on June 1. with a combined output of 7,000 megawatts, roughly double the country’s current nuclear capacity, Modi’s cabinet approved a plan to add 10 Indian-made reactors in mid-May.

India sees nuclear power as a way to reduce dependence on coal-burning power plants, which supply almost 60 percent of its electricity because it is the world’s third-biggest producer of carbon emissions. At a time when the global effort is under attack from President Trump, Modi wants to position himself as a leader in the fight against climate change. Trump said the deal favored India and China in his June 1 announcement that the U.S. will withdraw from the Paris agreement. By saying “we will work and walk together with others to leave a gift for future generations,” Modi trumpeted India’s commitment to the 2015 accord a few days later, during a state visit to France.

Modi wants to use nuclear power to further his “Make in India” campaign and like Trump, Modi came into office promising to boost local manufacturing.

Built by built by companies such as L&T, state owned Nuclear Power Corp. of India Ltd. has designed almost all of the 22 reactors that India has. “Our domestically designed reactors are the core of our nuclear strategy,” says Atomic Energy Secretary Sekhar Basu. “The foreign reactors are add-ons.”

India is actually a laggard in nuclear technology, government boosterism aside. As punishment for testing a nuclear weapon in 1974, for more than three decades, world powers banned the country from importing nuclear fuel and technology for civilian purposes. NPCIL is still playing catch-up although the U.S. lifted the prohibition in 2006. Compared to designs from foreign companies, its reactors use older, simpler technology and have 30 percent less capacity.

This is not the first time that India is pushing for nuclear power. “Targets have been set, and they’ve always been missed,” says M.V. Ramana, professor at the Liu Institute for Global Issues at the University of British Columbia. “They’ve essentially built almost nothing.”

Holding companies liable in the event of a nuclear accident, according to a 2010 law, is one obstacle. It makes investing in India too risky, General Electric Co. Chief Executive Officer Jeffrey Immelt has said. It needs liability reform before proceeding on six Indian plants, Toshiba Corp., owner of reactor maker Westinghouse Electric Co., said in February. On hold for almost seven years is a €7 billion ($7.9 billion) project involving Areva SA of France.

(Adapted from Bloomberg)

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