India Considers Allowing 49% Foreign Stakes in Nuclear Power Plants

Science (CSC) Science & Technology

30-Apr-25

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Context

India could allow foreign companies to take a stake of up to 49% in its nuclear power plants, to help achieve goals to cut carbon emissions.

Background

Traditionally, nuclear power plants in India have been owned and operated only by state-owned Nuclear Power Corporation of India Ltd (NPCIL) and its fully-owned subsidiary Bharatiya Nabhikiya Vidyut Nigam (BHAVINI).
To allow private sector participation government has proposed amendments to key legislations;
- Atomic Energy Act, 1962, a framework for nuclear energy development and regulation.
- Civil Liability for Nuclear Damage Act, 2010, ensuring compensation mechanisms for nuclear incidents.

What is Nuclear Energy?
– Nuclear energy is the energy released during nuclear reactions, either through fission (splitting of atomic nuclei) or fusion (merging of atomic nuclei).
– In nuclear fission, heavy atomic nuclei, such as those of uranium or plutonium, are split into lighter nuclei, releasing a large amount of energy.
1. This process is utilized in nuclear power plants to generate electricity.
Status of Nuclear power capacity in India
– The current installed nuclear power capacity in the country is 8,180 MW (2% of the total installed electricity capacity), spread across 24 nuclear power reactors.
– Capacity Expansion: 10 new reactors (totaling 8 GW) under construction across Gujarat, Rajasthan, Tamil Nadu, Haryana, Karnataka, and Madhya Pradesh.
1. Approval for a 6×1208 MW nuclear plant in Andhra Pradesh in collaboration with the USA.

Need for Foreign and Private Sector Involvement

Clean Energy Transition: India remains heavily dependent on coal, which accounts for over 70% of its electricity.
- Nuclear energy, being a stable and low-carbon source, is essential for reducing emissions without compromising baseload supply.
High Capital Costs: Nuclear projects require large upfront investments. Allowing foreign direct investment (FDI) would enable faster resource mobilization and technology transfer.
Post the 2008 Indo-US Civil Nuclear Agreement, India gained access to international nuclear markets. However, the expected commercial collaborations failed to materialize due to liability concerns.

Reform Proposals Under Consideration

FDI up to 49% in Nuclear Sector: The government is considering amending existing laws to allow foreign companies to hold stake in nuclear power ventures.
Atomic Energy Act, 1962: The proposed amendments would allow licensing of private players to construct, own, and operate nuclear power plants.
Easing Civil Liability for Nuclear Damage Act, 2010: It was enacted in the wake of the 1984 Bhopal Gas Tragedy, the Act imposes stringent liability on suppliers, which has deterred foreign participation.
- Under the proposed amendments, the operator’s right to claim compensation from the supplier would be capped to the contract value and be limited to a specified duration.
- The draft law also proposes a lower liability cap on small reactor operators at $58 million, but is unlikely to alter the cap for large reactor operators from the current level of $175 million.

Regulatory and Safety Oversight

The Atomic Energy Regulatory Board (AERB) and Department of Atomic Energy (DAE) will continue to supervise all activities.
Any relaxation in investment norms will be coupled with strict compliance to India’s safety protocols, aligned with the International Atomic Energy Agency (IAEA) guidelines.

Way Ahead

Clear Regulatory Framework: Establish a robust regulatory environment to ensure safety, compliance, and transparency, addressing concerns about accountability and national security.
Gradual Implementation: Start with pilot projects and small-scale initiatives to test private sector involvement, ensuring risk management before large-scale implementation.

Source: ET

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