Cabinet clears nuclear energy Bill to open sector to private participation

The Union Cabinet chaired by Prime Minister Narendra Modi on Friday approved the nuclear energy Bill that seeks to introduce legislative amendments for opening up the civil nuclear power sector for private participation, according to sources.

 

The Bill is likely to pave the way for amending two existing legislations — the Atomic Energy Act 1962, and the Civil Liability for Nuclear Damage (CLND) Act 2010 — tweaking the clauses that are believed to be deterring private companies, including foreign technology and equipment suppliers, from participating in the sector.

 

This is part of the government’s efforts for reaching 100 Gigawatt (Gw) nuclear power capacity by 2047. The legislative amendments will also facilitate the implementation of the Nuclear Energy Mission announced by Finance Minister Nirmala Sitharaman in her Budget speech in February.

 

The Sustainable Harnessing and Advancement of Nuclear Energy (SHANTI) Bill was listed as part of the legislative agenda of the ongoing Parliament session. Union Minister Jitendra Singh had said in Parliament last week that the Bill is at an advanced stage of drafting, and that final comments from ministries are being incorporated.

 

The Atomic Energy Act does not allow participation of private sector or even state governments while substantial technical and financial resources will be required for accelerated deployment of 100 Gw of nuclear capacity by 2047, a high-level panel had said in its report in June.

 

While private sector participation is expected to bring in capital and efficiency in construction required for setting up nuclear power plants, suppliers and potential operators are currently apprehensive about the provisions of the CLND Act due to uncertainty about extent of

liability. 

 

The panel had also recommended allowing any company, rather than only a central government-owned firm, to operate nuclear plants and handle fuel cycle activities under licence. It had also suggested the government should distance itself from the process of tariff regulation of nuclear projects.

 

For the changes in the CLND Act, the government has been looking at recommendations on capping the liability of the supplier, apart from changing the definition of a supplier to focus exclusively on providers of critical equipment. Apart from setting up of plants and generation of power, the legislative changes could also open up areas like exploration and mining of critical minerals, and fuel fabrication.

 

Experts say it is critical for India to align civil nuclear liability for operators and suppliers with international standards to attract global technology providers as well as private investors.

 

Currently, the tariff for nuclear power is governed by the Department of Atomic Energy (DAE) in consultation with the Central Electricity Authority (CEA). “However, private sector participation will necessitate governance by an independent regulator (such as Central Electricity Regulatory Commission, or CERC), enabling the possibility of competitive determination of tariffs," said Anujesh Dwivedi, partner, Deloitte India.

 

He also said that involving the private sector in research and development (R&D) of nuclear technologies — such as the development of Small Modular Reactors (SMRs) — by allowing the creation of intellectual property rights would be a progressive step and in line with the approach adopted by several developed countries. 

Decoding the Bill  

• The draft legislation seeks to amend the Atomic Energy Act 1962 and the Civil Liability for Nuclear Damage (CLND) Act 2010 
• Private firms and foreign equipment and tech suppliers are currently apprehensive about certain provisions of the two Acts 
• Key areas of concern include uncertainty about extent of liability, tariff regulation and the definition of a supplier    
• The proposed legislation will ultimately help India achieve 100 Gw nuclear power capacity by 2047 and implement the Nuclear Energy Mission