Private Investments in India's Nuclear Energy | 26 Feb 2024

Source: TH

Why in News?

India is set to revolutionise its nuclear energy sector by inviting private companies to invest approximately USD 26 billion, marking a significant shift in its energy policy.

• This move aims to boost electricity generation from non-carbon-emitting sources and aligns with India's ambitious targets for renewable energy adoption.

How does Private Investment Initiative Align with India's Energy Goals?

• India aims to increase its non-fossil fuels-based electric generation capacity to 50% by 2030, up from the current 42%.
• The infusion of private investment in nuclear power generation will contribute significantly to achieving this target, bolstering the country's transition to cleaner energy sources.
  • The government is negotiating with leading firms such as Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd. for investments of about Rs 440 billion ($5.3 billion) each in the nuclear energy sector.
• The government aims to add 11,000 megawatts (MW) of new nuclear power generation capacity by 2040 through this investment.
• This initiative is expected to diversify India's energy mix, reduce dependence on fossil fuels, and enhance energy security in the long run.

How will the Investment Plan be Implemented?

• Private companies will be responsible for making investments in nuclear plants, acquiring land, and water, and undertaking construction activities.
• However, the rights to build, operate, and manage the nuclear stations, as well as fuel management, will remain with the state-run Nuclear Power Corporation of India Ltd. (NPCIL) as per legal provisions.
• Private companies are anticipated to generate revenue from electricity sales, while NPCIL will operate the projects for a fee.

What are the Key Highlights of India’s Nuclear Power Sector?

• Current Energy Landscape:
  • India's total installed power capacity presently stands at 428 GW, expected to double to 810 GW by 2030.
    • Nuclear power contributes approx 3% to India’s energy mix.
• Current Nuclear Power Scenario:
  • India operates 22 nuclear power reactors with a total capacity of 6.8 GW, contributing approximately 3% to the nation's energy mix.
  • An additional 11 nuclear power plants are under construction, aiming to add 8,700 MW of capacity.
    • This includes a Prototype Fast Breeder Reactor (PFBR) and four Pressurized Water Reactors (PWRs) based on Russian technology.
  • The government has also sanctioned ten indigenous Pressurized Heavy Water Reactors (PHWRs) of 700 MW each, aiming for significant capacity expansion by 2031.

• Key Players and Regulatory Environment:
  • Key Players:
    • The Department of Atomic Energy (DAE), the Nuclear Power Corporation of India (NPCIL), and the National Thermal Power Corporation (NTPC) are the key organizations that play a pivotal role in the nuclear energy sector in India.
      • All three are under the control of the Union government.
      • NPCIL is the owner and operator of all nuclear power plants (except the PFBR variants, owned by The Indira Gandhi Centre for Atomic Research (IGCAR), DEA) and the primary contact for all nuclear business in India.
      • NTPC is a major producer of electricity from coal and accounts for 70GW capacity and is seeking to adopt nuclear reactors as part of its strategy to phase out old coal plants.
  • Regulatory Oversight:
    • The Atomic Energy Regulatory Board (AERB) oversees nuclear safety and regulatory processes, including site selection, construction, operation, and decommissioning.
      • AERB's responsibilities extend to nuclear applications in various sectors.
• Nuclear Liability and Insurance:
  • India ratified the Convention on Supplementary Compensation for Nuclear Damage (CSC) in 2016, establishing a global compensation regime for nuclear accidents.
  • The Civil Liability for Nuclear Damage Act (CLND), 2010, sets liabilities for operators and mandates insurance to cover potential damages.
  • The Indian Nuclear Insurance Pool (INIP), backed by General Insurance Corporation of India (GIC-Re) and other insurers, provides USD 15 billion in coverage to protect suppliers against liability claims.
• Challenges:
  • Safety and Security Standards:
    • India’s nuclear power plants have been criticized for their low safety and security standards, especially in the event of natural or man-made disasters.
    • They have also been accused of radioactive contamination, climate change and leakage, which affected the health of the workers, and environment.
      • For example, the Kudankulam Nuclear Power Plant in Tamil Nadu and the Kaiga Nuclear Power Plant in Karnataka faced these issues.
  • Nuclear Waste Management:
    • India has not developed a comprehensive and long-term plan for managing and disposing of its nuclear waste. It also lacks adequate storage and transportation facilities for its radioactive materials.
  • Land Acquisition:
    • Securing land for nuclear power plants poses significant hurdles, leading to delays in projects such as Kudankulam (Tamil Nadu) and Kovvada (Andhra Pradesh).
  • Lack of Public Funding:
    • Unlike fossil fuels and renewables, nuclear power has not received substantial subsidies, making it less competitive in the energy market.
• Opportunities for Expansion:
  • India aims to increase nuclear power's share from 3% to 9-10% of its energy mix.
  • The nuclear sector offers opportunities for foreign and private companies, especially in non-nuclear parts of power plants and in the construction and services sector.
  • Small Modular Reactors (SMRs) present a promising avenue for cost-saving and reducing construction time, with the potential for technology sharing and partnerships.
  • Nuclear energy could support the production of green hydrogen and the decarbonization of the transportation sector, providing a clean power source for electric vehicles and hydrogen fuel cells.
  • With the phasing out of old coal plants, nuclear power will play a crucial role in meeting India's rising energy demands and achieving its clean energy goals.