Implications of risk perceptions for long term future of nuclear energy in India: a sensitivity analysis around nuclear energy cost within an integrated assessment modeling framework

Abstract

Nuclear energy for power generation is expected to be a vital pillar of India's energy policy as well as emission mitigation strategy. However, there are divergent views from various quarters about the risk and liability associated with nuclear power plants. Risk mitigation through alternative measures increases the capital and operational costs of nuclear power. We undertake a cost sensitivity analysis within an integrated assessment modelling framework, for nuclear power generation and present its implications for India's energy and climate policy in the long run. We find that nuclear energy is competitive when risk induced costs are low under non-climate intervention (i.e. BAU) scenarios. However, even in BAU, nuclear energy deployment is seriously curtailed under higher risk induced costs. Consequently, fossil energy takes higher share, thus increasing the emissions substantially. Interestingly, nuclear liability off sets climate liability under climate policy scenarios. We find that nuclear energy is competitive, in the long-run, even under high risk induced costs if global climate stabilization policies corresponding to global 2 degree C stabilization target are pursued. Reaching emission mitigation targets however becomes much more expensive as a result of higher nuclear energy costs. Our results suggest need for credible risk assessment and more effective communication to reduce the risk perception gap between supporters and skeptics of nuclear energy to delineate an optimal role for nuclear technology in the Indian energy system.