Govt. to Allow Private Operators in Nuclear Energy Sector

General Studies Paper-3

Context: The government is likely to move two crucial amendments in the laws governing the country’s atomic energy sector in the upcoming monsoon session of Parliament.

Legal Reforms Underway

• Easing Nuclear Liability Law (Civil Liability for Nuclear Damage Act, 2010): Its objective is to limit the liability of equipment vendors in case of a nuclear accident. Key Proposed Changes:
  • Monetary Cap: Liability may be capped to the original contract value.
  • Time Limit: Introduce a statute of limitations for how long liability applies.
  • Amendment to the Atomic Energy Act, 1962: Its objective is to allow private and foreign players to enter nuclear power generation.
  • Current Restriction: Only state-owned entities like NPCIL and NTPC Ltd can operate nuclear plants.
  • Proposed Change: Permit minority equity participation by foreign/private entities in upcoming projects.

Need for the Changes

• NPCIL: India’s nuclear sector is governed by the Atomic Energy Act, 1962, under which only government-owned entities such as NPCIL can generate and supply nuclear energy.
  • There has been no private sector involvement in India’s nuclear power sector so far.
• Foreign companies like GE-Hitachi, Westinghouse, and Framatome have avoided India due to open-ended liability concerns.
  • Amending this is crucial to attract foreign investment and technology.
• These moves aim to unlock the potential of the Indo-US Civil Nuclear Agreement, signed nearly two decades ago.
  • India intends to package these reforms as part of a wider trade and investment framework with the U.S., potentially leading to a trade pact.

Recent U.S. Regulatory Breakthrough

• Recently, the U.S. Department of Energy granted Holtec International a specific authorisation (SA IN2023-001) under 10CFR810.
  • Implication: Holtec can now transfer unclassified SMR technology to Indian partners like Tata Consulting Engineers and L&T.
  • This clears the path for design and manufacturing of small modular reactors (SMRs) in India.
• Significance: Positions India to co-develop and manufacture nuclear components domestically.

India’s Need to Increase its Nuclear Capacity:

• Nuclear Capacity: India’s plans to increase its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32 and eventually 100 GW by 2047.
• Energy Demand Growth: India’s electricity demand is expected to increase 4-5 times by 2047, and nuclear power will help meet base-load demand alongside renewables.
• India’s Targets: To reduce the emission intensity of its GDP by 44% by 2030 from the 2005 level.
  • To achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
• Roadmap for 100 GW: A roadmap is being developed with stakeholders, and while challenges remain, achieving the 100 GW target is seen as both ambitious and achievable

Conclusion

• These developments reflect a historic shift in India’s nuclear policy. By addressing legal and regulatory obstacles, India is poised to:
  • Unlock foreign investment and advanced technology.
  • Expand its clean energy portfolio through nuclear power.
  • Reinforce strategic alignment with the U.S. under the civil nuclear framework.