If India sets out to build nuclear reactors that could generate 20,000 megawatts (MW) or 40,000 MW of electricity, this could be a large-scale effort, involving perhaps $40 billion of imported equipment. Eventually, this could be a way to “use foreign exchange reserves” to build infrastructure. But it is important to be sure that these big decisions are made wisely.

The nuclear energy agreement with the US commits India to separate military and civilian nuclear facilities, like nuclear weapon states do. India will provide the International Atomic Energy Agency with a list of civilian facilities and allow inspection of these facilities, placing them under safeguards. In return, India gets access to nuclear technology, equipment and fuel. The time it will take to achieve this gives us breathing space to address domestic issues. It is time for us to separate nuclear weapons work from the task of nuclear reactors as a tool for electricity generation.

Currently, nuclear power is generated by the Nuclear Power Corporation of India Ltd (NPCIL) under the Department of Atomic Energy. The Atomic Energy Regulatory Board deals with nuclear safety. Nuclear energy generation is similar to hydel generation in having high fixed costs and low marginal costs. French data for 2003 shows the cost of construction of a nuclear plant as being 30 per cent higher than that of a comparable coal-fired plant. NPCIL data — which probably do not show all costs associated with the Indian nuclear effort — suggest an apparent price of Rs 6 crore per MW for nuclear capacity.

A lot has been said about the role of nuclear energy in a world with high oil prices. However, the viability of nuclear power is not obvious. It depends on interest rates. At high interest rates and low oil prices, nuclear generation is not competitive. It is only if a generator can count on low interest rates and high oil prices, over the coming 25 years, that nuclear generation becomes commercially viable.

So far, India has run a special programme for nuclear power, where nuclear weapons and nuclear reactors were mixed up. But once it becomes a technology available to the power industry, our attitude, and its exotic status, needs to change. We need to start thinking of a nuclear plant that makes electricity as a factory, run on commercial principles.

The availability of the nuclear option should then be treated as another option for the electricity generation industry. Instead of a separate nuclear power programme that has to be pursued regardless of viability, nuclear generation should be a choice analysed by all power generation companies. Nuclear generation was once an end. Now nuclear generation should be treated as a means. It must be pursued when, and only when, it is cheaper than alternatives for electricity generation.

We might assume that government ownership ensures safety, but Chernobyl was state-owned. The last thing India needs is a nuclear accident. That will shut down our nuclear power programme for decades to come.

We must remember that industrial safety is a public good. The government must play a much more active role in ensuring safety if nuclear power is going to expand. Under the new agreements which may come about, international inspectors will be in Indian nuclear thermal plants, with a focus on non-proliferation issues. In addition, an Indian regulatory effort should focus on safety of fissile materials through the full fuel cycle, safety of the reactor, potential terrorist attacks, etc.

How can the nuclear industry in India be organised, with a separation of weapons and electricity generation? Currently, both civilian and military uses of nuclear power are under the Department of Atomic Energy. The following proposals would help improve focus, transparency and incentives.

One, the nuclear weapons effort should be shifted into the ministry of defence. It would make sense to identify the labs, personnel and facilities which are devoted to weapons, and move them into the defence establishment.

Two, the Atomic Energy Regulatory Board should be shifted to the ministry of power, to set safety standards and monitor civilian nuclear electricity generation, focusing on safety. Its task should be broadened to take full responsibility for the nuclear cycle, selling fuel to power utilities, and taking waste out of the utilities.

Three, an “Energy Research Mission”, under the ministry of power, needs to be set up, to fund R&D at universities into new generation technologies such as thorium-based and fusion-based reactors. So, existing DAE labs should either be shifted into the ministry of defence, for weapons work, or merged into various universities, for electricity work.

Four, at present Nuclear Power Corporation of India focuses on nuclear energy regardless of cost. A merger of NPCIL and NTPC would make a unified electricity generation company, which would make calculations about the role of coal versus uranium based purely on commercial considerations.

Five, the teams and factories in the DAE establishment which produce reactors should be sold to BHEL, so that BHEL becomes a unified company selling electricity generation equipment, ranging from hydel to coal to uranium based processes. BHEL should aspire to compete in the global market, selling the full range of equipment for electricity generation technologies.

In the last 50 years, India’s nuclear establishment has focused on building nuclear reactors as an end in themselves, without any concern for economic viability. If the India-US pact goes through, we would stand at a new frontier of commercial exploitation of nuclear electricity, which could have tremendous ramifications for India’s energy scenario, particularly if global warming becomes a major issue. But this requires that we must de-exoticise nuclear electricity generation. Our goal should be to bring hard-nosed commercial considerations to bear on nuclear electricity, as it does all over the world. Electricity generation companies should make choices between hydel, solar, diesel, coal, gas and uranium routes to electricity based purely on economic viability. This requires us to fully reorganise our nuclear establishment, separating out the three activities of weapons, R&D and electricity