Despite high upfront costs and delays, India prioritizes long-term scaling and energy independence — contrasting with the more fragmented, market-driven U.S. approach.
In April 2026, a new 500 MW sodium-cooled reactor in Kalpakkam, India, attained criticality. The reactor maintained a nuclear chain reaction — which is a pretty big step for any new nuclear plant. There are a number of things that struck us about this news. The haters and skeptics will point out that this unit began construction in 2004 with a 2010 expected completion date. No cost escalation figures were provided by the Indian government. But the real question here is why a molten salt reactor? It’s not a new technology. President Jimmy Carter canceled construction of one, the Clinch River Project, in 1973. And at least twelve countries have built variants of this design. The US version was built and operated in Oak Ridge, TN.
The answer to the why is thorium. In terms of natural resources, India is uranium-poor but abundant in thorium resources. And the government said as much in the press release discussing the new reactor. So we see this choice of nuclear technology as being in large measure motivated by ready access to domestically sourced thorium. In terms of the energy trilemma, a thorium-based nuclear cycle is 1) sustainable (no carbon emissions), 2) affords security of supply, 3) we’ll punt on affordability. So, two out of three ain’t bad. But it was also the way the Indian government went about it. The design is entirely domestic, coming from the Indira Gandhi Center for Atomic Research, which is funded by the government’s Department of Atomic Energy. More broadly, the Indian nuclear program resembles that of Korea or France in terms of its policy thoroughness and application of government expertise. There are six discrete steps or functions in every nuclear program: mining, refining, project design, construction, operations, and waste remediation, and the Indians seem to be taking all of them seriously. By way of contrast, the US abandoned all federal efforts to create a nuclear waste repository early in the Obama administration, and our energy administrators haven’t thought about it seriously since. Although, in all fairness, the Indians haven’t picked a site for long-term geological storage of nuclear waste either.
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The other thing that is so unusual, at least to Americans, is that the Indian government actually has a long-term energy plan. It plans to build 18 standard design reactors, a decent sized fleet. So the relatively high cost of the first unit is fairly meaningless. The key is the average cost of the fleet. But also the plan involves a huge commitment of capital — 18 new reactors on top of 8 currently under construction. This implies spending hundreds of billions of dollars and that spending properly belongs on the government’s balance sheet. Only the USians would build two new reactors in Georgia, on a private utility’s balance sheet, at very high cost and with the highest cost of capital possible, and then abandon the nuclear effort because it was too expensive. (But at least the shareholders of the Southern Company did well, bless their hearts.)
The government clearly has a well thought out long term plan. India recognized at the outset that it needed three different reactor designs for the program. First, a uranium – fueled pressurized heavy water reactor to produce plutonium. Second, to take the plutonium to create a thorium-plutonium fuel for fast, breeder reactors. And finally, reprocess breeder reactor fuels for a thorium-uranium fuel cycle for the countries’ fleet of next-generation reactors. And this is all so that India can utilize plentiful thorium. Here we call these HALEU fuels, “high assay, low enriched uranium” which blends thorium and uranium.
In a stark contrast with the US, India celebrated this feat of engineering expertise publicly at the highest levels. Prime Minister Modi stated that this facility “reflects the depth of our scientific capability and the strength of our engineering enterprise”. This is the way politicians in the US used to speak about grand public accomplishments like the space program. But for all this build-out, nuclear power will still account for less than five percent of India’s power generation mix. To us, that sounds about right. Nuclear power, in our view, has always been a ward of the state, and any attempt to privatize it has just resulted in various convoluted subsidy schemes such as insurance relief and loan guarantees. It’s also interesting to see long-term state planning applied in India. We don’t do much of that in the US. And it shows.
