Mentor’s Comment:  Nuclear power is the fifth-largest source of electricity in India, following coal, gas, hydroelectricity, and wind power. As of November 2020, India has 22 nuclear reactors in operation across 8 nuclear power plants, with a total installed capacity of 7,380 MW. From 2020 to 21, nuclear power produced 43 TWh, contributing 3.11% of India’s total power generation. In today’s editorial, we will be introduced to the private investment in India’s nuclear power sector, which is expected to have significant implications for the safety and security of nuclear power plants.

_

Let’s learn!

Why in the News?

The government is negotiating with major firms, including Reliance Industries, Tata Power, Adani Power, and Vedanta, for investments of around $5.3 billion each.

• This initiative aims to enhance electricity generation from non-carbon-emitting sources, aligning with India’s ambitious goal of achieving 50% non-fossil fuel-based electric generation capacity by 2030, up from 42% currently.

What are the potential benefits of private investment in nuclear energy for India’s energy security?

• Increased Capacity: The government aims to add 11,000 megawatts (MW) of nuclear power generation capacity by 2040. By ramping up nuclear power, India can reduce its heavy reliance on coal, which constitutes over 50% of its installed capacity.
• Financial Investment and Infrastructure Development: The initiative seeks approximately $26 billion in private investments, which will facilitate the construction and operation of new nuclear plants. This financial boost is essential for meeting ambitious clean energy targets.
• Technological Advancements and Innovation: Private firms may bring innovative technologies and practices that can enhance efficiency and safety in nuclear operations. Collaborations could also foster research and development in areas such as Small Modular Reactors (SMRs), which offer potential cost savings and reduced construction times.
• Alignment with National Energy Goals: The investment aligns with India’s goal to achieve 50% non-fossil fuel-based electricity generation by 2030, aiding in the transition towards cleaner energy sources.
• Reduction in Carbon Emissions: Nuclear energy is a non-carbon-emitting source, which can significantly reduce greenhouse gas emissions. By ramping up, India can move closer to its goal of achieving 50% non-fossil fuel-based electricity generation by 2030.
• Conservation of Natural Resources: Nuclear power plants require less land per unit of electricity generated compared to solar or wind farms. This efficiency can help conserve land resources and minimize habitat disruption, particularly in densely populated regions.

How will the operational framework be structured between private companies and NPCIL?

• Roles and Responsibilities: Private Companies will be responsible for making investments in nuclear plants, acquiring necessary land and water resources, and undertaking construction activities outside the reactor complex.
  • The rights to build, operate, and manage the nuclear stations, including fuel management, will remain with NPCIL as per existing legal provisions.
• Revenue Generation: Private companies are expected to generate revenue from electricity sales once the plants are operational. This model allows private entities to benefit financially.
• Hybrid Model: This model aims to accelerate nuclear capacity expansion without requiring amendments to the Atomic Energy Act of 1962, although it does require final approval from the Department of Atomic Energy.
• Regulatory Compliance: The Atomic Energy Regulatory Board (AERB) will oversee safety and regulatory processes, maintaining stringent standards throughout construction and operation.
• Public-Private Partnerships: There is potential for forming public-private partnerships where NPCIL or a similar government body retains majority ownership (51%) of nuclear plants.

What challenges and regulatory considerations must be addressed for successful implementation?

• Safety and Environmental Concerns: There is significant public concern regarding the safety of nuclear power plants, as evidenced by protests against facilities like Kudankulam.
  • Increasing the frequency of inspections and enhancing emergency response protocols are recommended to ensure that safety standards are met consistently across all facilities.
• Investment Conditions and Restrictions: Current policies restrict direct foreign investment in nuclear energy, allowing only limited participation in equipment manufacturing.
• Infrastructure and Technological Development: The capital-intensive nature of nuclear projects requires a highly skilled workforce. Investments in training and capacity-building will be critical to ensure operational efficiency and safety.
• Lack of Institutional Independence: The AERB currently lacks sufficient independence, as it operates under the Department of Atomic Energy (DAE).
  • Secondly, the Atomic Energy Act of 1962 restricts private sector involvement in nuclear energy, granting the government exclusive rights to produce and manage nuclear power.
• Legal Uncertainties: The existence of the Civil Liability for Nuclear Damage Act (CLNDA) framework poses risks for investors, as the government retains the right to novate contracts related to nuclear operations.

How can India address these challenges?

• Legislative Reforms: The government should amend existing legislation to formally establish the AERB as an independent statutory authority, ensuring that regulatory decisions are made based on safety and technical considerations rather than political or administrative pressures.
• Establishment of a New Regulatory Authority: Reviving the Nuclear Safety Regulatory Authority Bill, to issue safety policies and regulations without interference from the DAE, thereby enhancing its credibility and operational effectiveness.
• Establishing a governance structure where the regulatory body operates independently would reduce conflicts of interest and improve regulatory oversight.
• Enhanced Oversight Mechanisms: Increasing parliamentary oversight over the AERB’s operations can enhance accountability. Unlike executive orders, which have limited scrutiny, statutory authorities are subject to more rigorous checks, including judicial inquiries for member removals, which can bolster independence.
• Adoption of Global Standards: Aligning with international best practices and standards set by organizations like the International Atomic Energy Agency (IAEA) can help strengthen regulatory frameworks.