India's nuclear euphoria: The hard economics policymakers ignore

By Shankar Sharma* 

There is a sort of newfound euphoria sweeping India with respect to nuclear power — and in particular, Small Modular Reactors (SMRs). In political speeches, policy documents, and newspaper editorials, the word "nuclear" has acquired a fresh, almost romantic glow, as though a technology once synonymous with catastrophe at Chernobyl and Fukushima has been quietly reinvented. 

To be sure, the challenges of climate change and India's growing electricity demand are real and urgent. But enthusiasm is not a substitute for analysis. A hard look at the global evidence, the domestic cost picture, and the practical hurdles of nuclear deployment raises questions that this national conversation urgently needs to confront.

Start with what nuclear power actually costs. According to Lazard's widely cited Levelized Cost of Energy (LCOE) analysis, a new nuclear plant costs approximately $151 per MWh (ranging from $112 to $189/MWh). Compare this with onshore wind at $43/MWh (range: $29–$56) and utility-scale solar PV at just $41/MWh (range: $36–$46). 

Nuclear is not merely more expensive — it is three to four times more expensive at the median than the renewable alternatives. For a developing country in which hundreds of millions of people still face energy poverty, this price differential is not an abstraction. It translates directly into unaffordable electricity tariffs and delayed industrial growth.

Crucially, these LCOE figures do not capture the full cost picture for nuclear. They exclude the multigenerational burden of nuclear waste storage — a cost that continues long after a plant ceases generating a single unit of electricity or earning a single rupee of revenue. In the United States alone, approximately $500 million is spent annually safeguarding the waste from roughly 100 civilian nuclear plants.

This liability does not disappear when plants are decommissioned; it persists for hundreds of thousands of years. India, in pursuing an ambitious nuclear programme, would be choosing to bequeath this burden to its grandchildren's grandchildren's grandchildren.

Proponents of SMRs argue that smaller, factory-assembled units will finally make nuclear competitive. The argument has intuitive appeal: if you can manufacture reactor components on a production line rather than on a remote construction site, surely costs must fall. 

But the global evidence so far does not support this optimism. SMRs are not losing the energy race on technology — they are losing on economics. The modular nature of SMRs does lower per-unit assembly costs, but the same modular nature means a smaller electricity output per unit — and nuclear economics is brutally sensitive to scale. A large reactor spreads enormous fixed costs across a much greater generating capacity.

An SMR concentrates those fixed costs over a smaller output, tending to push the per-unit cost of electricity upward, not downward. Early commercial experience in North America and Europe has borne this out: cost estimates for SMR projects have risen sharply from initial projections, and several projects have been cancelled or delayed indefinitely.

The domestic cost picture in India is equally sobering. According to a recent TERI (The Energy and Resources Institute) report, India will require between Rs 23–25 lakh crore to build 100 GW of nuclear capacity by 2047. That translates to a capital cost of approximately Rs 25 crore per MW of nuclear capacity — and this is before accounting for interest during construction, grid integration, decommissioning reserves, or waste management funds. Solar power combined with battery energy storage systems (BESS) is currently deployable in India at approximately Rs 10 crore per MW. That is one-quarter of the TERI nuclear estimate. 

The proposed Jaitapur Nuclear Power Plant in Maharashtra — six units of 1,650 MW each — was projected at a staggering Rs 40 crore per MW. Even if SMR technology delivers some reduction from those figures, there is no plausible scenario in which nuclear capital costs approach the cost of distributed solar-plus-storage. 

For every rupee of investment, solar delivers four times the generating capacity. Public funds that go into nuclear capacity cannot simultaneously go into schools, hospitals, rural electrification, or the distributed energy systems that can reach India's remotest households.

Nuclear projects also impose a range of additional costs and disruptions on the communities that host them — costs that rarely appear in official project appraisals. Land acquisition is the first flashpoint. Nuclear plants require substantial land parcels, and the exclusion zones mandated for safety create a much larger footprint than the plant itself. Communities within these zones face restrictions on agriculture, industry, and development. 

India's history of infrastructure land acquisition offers little comfort that affected families will be adequately compensated or rehabilitated. Water consumption is the second, often underappreciated, issue. Nuclear reactors require enormous volumes of cooling water. India, increasingly battered by heat waves and groundwater depletion, can ill afford to commit vast water resources to a single large installation. 

Even the probability of a radiation accident, however low, carries consequences that are catastrophic and essentially irreversible. Fukushima showed that even a country with sophisticated nuclear safety culture and regulatory infrastructure can be caught off-guard.

Large nuclear plants are also, by their nature, sited where land and water are available — not necessarily where demand is highest — requiring long transmission lines that add capital cost, increase grid losses, and create new vulnerabilities. And at Kudankulam in Tamil Nadu and at the proposed Jaitapur site in Maharashtra, local communities have organised sustained resistance to nuclear projects. These are not the protests of the uninformed; they reflect legitimate concerns about safety, displacement, water use, and the distribution of risks and benefits.

Nuclear advocates often argue that baseload power is essential to complement intermittent solar and wind, and that India's growing "evening demand ramp" — a rapid rise in consumption after sunset when solar generation ceases — makes the case for nuclear. 

But battery energy storage systems, pumped hydro, demand response programmes, and smart grid technologies are all capable of addressing this challenge at lower cost, with shorter deployment timelines, and without the safety and waste burdens of nuclear. The BESS market in India is developing rapidly, and costs are falling year after year as global manufacturing scale increases. 

Distributed solar-plus-storage, deployed at the consumer level, can reduce evening peak demand significantly while simultaneously improving energy access for rural and peri-urban households.

Perhaps the most important argument against the nuclear push is not that nuclear is bad in absolute terms, but that the resources it consumes could achieve far greater climate and development impact if deployed elsewhere. The Rs 25 lakh crore that TERI says will be needed for 100 GW of nuclear by 2047 could, at current solar-plus-storage costs, deliver roughly 250 GW of dispatchable clean energy — two and a half times the nuclear capacity, available years sooner, with no waste legacy, no radiation risk, and no multi-year construction delays.

What India's energy policy debate urgently needs is not enthusiasm, but honest accounting. The full lifecycle costs of nuclear — capital, fuel, operations, decommissioning, waste storage measured in geological time — must be placed alongside the costs of alternatives. The distributional impacts — who bears the risks, who bears the displacement, who pays the tariffs — must be openly debated. 

The opportunity costs — what else could be built with the same money — must be quantified and compared. Solar power plus battery storage is today cheaper, faster to deploy, scalable to any geography, and free of the multigenerational liabilities of nuclear waste. It can be deployed at rooftop scale to serve individual households, at community scale to serve villages, and at utility scale to serve cities and industries. 

It does not require large land acquisitions with safety exclusion zones. It does not need rivers for cooling. It does not concentrate catastrophic risk at a single geographic point. India deserves an energy future built on these realities. The euphoria around nuclear, however well-intentioned, is a distraction from the far more promising path that lies already before us.

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*Power & Climate Policy Analyst Shankar Sharma is a Power & Climate Policy Analyst based in Sagara, Karnataka