India’s nuclear sector reforms amend the CLNDA and Atomic Energy Act, allowing private and foreign operators with capped supplier liability. Aiming for 100 GW by 2047, the changes permit private investments, foreign equity, and lower liability for small reactors, boosting efficiency and capacity to meet rising energy demands.
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Picture Courtesy: INDIAN EXPRESS
India plans major nuclear sector reforms by allowing private and foreign players with limited liability to boost energy production.
The government plans to introduce two amendments to the laws governing the atomic energy sector; the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) and the Atomic Energy Act, 1962, with the aim to open the nuclear sector to private and foreign operators while addressing liability concerns that have deterred investment.
The step aligns with India’s ambitious goal of reaching 100 gigawatts (GW) of nuclear energy capacity by 2047, a twelvefold increase from the current 8,180 MW.
The CLNDA was enacted in 2010, it establishes a framework to compensate victims of nuclear accidents and allocates liability. However, its provisions have discouraged foreign and private investment due to strict supplier liability clauses.
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The CLNDA’s supplier liability clause, influenced by the 1984 Bhopal gas tragedy, holds suppliers accountable for accidents caused by defective equipment or substandard services. This provision, unique to India, conflicts with global standards where operators bear primary responsibility. |
Highlights of the Proposed amendments
Capping Supplier Liability => Limit the financial liability of equipment vendors in case of a nuclear accident to the original contract value. For example, if a supplier’s contract is of value $100 million, then their liability will not exceed this amount, regardless of the accident’s scale.
Introducing a Time Limit => Specific timeframe during which suppliers can be held liable. A defined liability period aligns with international norms, such as the Convention on Supplementary Compensation for Nuclear Damage (CSC), which emphasizes operator liability over suppliers.
Lower Liability for Small Modular Reactors (SMRs) => The draft law suggests a reduced liability cap of $58 million for operators of small reactors, while maintaining the $175 million cap for large reactor operators. This encourages investment in SMRs, which are compact, cost-effective, and scalable nuclear reactors.
The Act restricts nuclear power generation to state-owned entities like the Nuclear Power Corporation of India Limited (NPCIL) and NTPC Ltd.
Highlights of the Proposed amendments
Allowing Private Operators => The government plans to permit private companies to operate nuclear power plants, with potential investments of $5.14 billion each.
Foreign Equity Participation => Allow foreign companies to hold minority shares in upcoming nuclear projects, promoting technology transfer and international collaboration. Currently, foreign direct investment (FDI) in nuclear power generation is prohibited.
Opening the nuclear sector to private players enhances efficiency, attracts capital, and accelerates project implementation. Currently, NPCIL operates all 22 nuclear reactors in India, contributing 8,180 MW to the energy mix (about 3% of India’s electricity).
Allowing private operators can help scale up capacity to meet the 100 GW target by 2047, especially as energy demand is projected to increase four to five times by then.
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PRACTICE QUESTION Q. Nuclear energy is often seen as a climate-friendly alternative. However, what are the major environmental and safety concerns associated with this revival? 150 words |
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