Nuclear ecosystem’s big risk is safe fuel supply, not finance

The SHANTI Act is a vital step forward, but the real work now moves to building the ecosystems around new nuclear power technologies

Nuclear power divides people. While some environmentalists value its zero-carbon energy, others worry about its safety, weapons potential, and waste-management risks, not to mention cost, especially when renewable energy is getting cheaper. But many countries are eyeing it for the same reason India is: energy security. NITI Aayog’s net-zero study projected a cost-effective greener pathway would need ~100 GW of nuclear power by 2047, a more than 10x growth from now.

To truly scale nuclear power, India’s planning will have to think beyond just liability towards a more holistic view of risk. (Shutterstock)

Read all stories from Rahul Tongia

Many supporters of nuclear power projects in India have held the Civil Liability for Nuclear Damage Act, 2010, responsible for making it difficult for India to attract foreign entrants. Now, India has signed the SHANTI Act, 2025, which caps the liability for nuclear power system developers, specifically removing the automatic liability for equipment suppliers. This is vital since the operator could be Indian but equipment would invariably come from abroad.

Traditionally, India’s nuclear power programme was domestically based, with a three-phase plan going from natural uranium — in Pressurised Heavy Water Reactors (PHWRs) — to plutonium in fast breeder reactors, to thorium-based reactors over time. To accelerate the installed capacity of nuclear power, India opened up its sector to international collaboration, including under the A123 deal signed with the US in 2008. It was a period of hope, but few global partnerships materialised — Russia being a notable exception, with work on the Kudankulam plant predating the A123 deal.

The SHANTI Act is a welcome move, but will it suffice? To truly scale nuclear power, India’s planning will have to think beyond just liability towards a more holistic view of risk.

Global experience, especially with international collaborations, shows that the real risks for nuclear power beyond accidents span cost overruns to never getting built. With that lens, we need to look at other dimensions.

Finance is the easiest to scope. Is the global supplier bringing in capital? At what rate? In rupees? Is the project set up to be paid in fixed Rs/kWh electricity or is it a capex play (leaving operations as a risk)?

For India, details about fuel and fuel cycles matter more. But when it comes to nuclear power plants, India chose PHWR technology, which is not what most countries use. India lacks enrichment facilities to convert natural uranium, which can only be directly used PHWRs. Enrich a little Lightly Enriched Uranium (LEU) and it’s usable in light water reactors (LWRs), but enrich much more and you can make a bomb.

Thus, for typical reactors based on LEU, India would need a secure supply for fuel. This is before considering the question of what happens to spent fuel. Will the supplier be willing to take it back?

Established infrastructure players such as Tatas, Adani, National Thermal Power Corporation have expressed interest in nuclear power. They would all need to build contracts around not just nuclear technology (hardware) but also assured fuel supply. India is in a position to ask for not just fuel but even LEU production facilities as part of a package deal. India can ameliorate global concerns by placing such facilities and linked reactors open to external inspections. Such facilities would take time. Is that worth it? Given the scale of nuclear power planned, it should be, and initially, LEU fuel can be imported.

If one is making a wish list, new fuel cycles, especially based on thorium, which India has in abundance, are worth developing. Not only does this address fuel security, such fuel cycles can also lead to lower spent fuel nuclear waste problems.

Let’s say that the entire deal is worked out as a package. A mix of entities come together and offer technology, finance, and LEU fuel. And the plant gets built and starts running. The question remains: How sure are we that fuel would be available for a lifespan of 50+ years? How does a country manage the risk of geopolitical considerations trumping commercial ones? These aspects aren’t independent — technology transfer can be both commercial and strategic, where the intellectual property owner doesn’t want the buyer to end up becoming a competitor.

Ultimately, the SHANTI Act is a vital step forward, but the real work now moves to building the ecosystems around new nuclear power technologies. India will have to take explicit calls on the interplay between costs, security, and environmental concerns — the inevitable “energy trilemma” facing policy-makers worldwide.

Rahul Tongia is senior fellow, Centre for Social and Economic Progress (CSEP), a not-for-profit think tank. The views expressed are personal

(This piece is part of this fortnight's debate, titled “What is the real constraint on India's nuclear ambition?" The opposing side of the debate can be accessed here)