India has signed a nuclear power contract with Areva, a French government-backed producer of nuclear reactors. The $10 billion deal will see Areva construct two 1,650MW power plants over the next few years.
The pact with Areva is a welcome development. It diversifies India’s nuclear technology sourcing basket away from the US. Washington may be irked that the first contract wasn’t awarded to a US company, especially because of former president George W. Bush’s heavy hand in pushing a nuclear agreement forward.
To be sure, to ignore US suitors such as General Electric or Westinghouse would be a snub. The deal with Areva, however, is considerably more favourable: The company will provide fuel cells for the lifetime of its plants, perhaps 60 years.
Despite Washington’s help in giving New Delhi a golden ticket to pass through the Nuclear Suppliers Group, India’s first responsibility should be towards sustainable growth of its power sector. This requires it to be delinked from its strategic nuclear weapon options.
It is currently not in India’s interest to sign an agreement with a US company. US-based companies are subject to section 123 of the US Atomic Energy Act, which is a bilateral agreement with India. If, for some reason, that fell through—say, if India compromised its status by testing nuclear weapons—it’s unclear if US firms would be forced to remove their equipment, and reactors, from India.
Nuclear Power Corp. of India operates 17 reactors in the country, but a considerable expansion of nuclear energy is in order. India currently relies mainly on foreign oil to produce its energy. This is environmentally disastrous in the long term and unsustainable because of the fluctuations in the oil market. And electricity production must be ramped up to meet an expected surge in demand.
While environmental activists have been up in arms about Areva’s plants, which they say are environmentally unsound, the nuclear energy will be considerably cleaner— in addition to being more efficient—than other oil-based practices.
That’s a good move, and India should continue to pursue nuclear agreements—with the most willing, and able, commercial partners.
The New Delhi deal with Areva: snub or success? Tell us at email@example.com