Rajasthan nuclear power project delays expose gaps in vendor ecosystem

RAPP-8's commissioning delay has highlighted bottlenecks in India's nuclear vendor base as the country seeks to rapidly expand capacity and deepen localisation under the SHANTI Act

State-owned Nuclear Power Corporation of India Ltd (NPCIL) last month approached the Central Electricity Regulatory Commission (CERC) seeking another year-long extension of an existing permission to draw start-up power for pre-commissioning activities from the grid for its second 700 Megawatt (MW) Rajasthan Atomic Power Project (RAPP)-8 unit of the Rajasthan Atomic Power Station (RAPS) after missing its June 30, 2026 deadline.

 

While the power regulator has given its permission for the extension, the missed deadlines have exposed gaps in India's vendor ecosystem for building and commissioning nuclear power projects.

 

The RAPP-8 unit is based on Pressurised Heavy Water Reactor (PHWR) technology that was initially brought from Canada in 1960s but has since been fully indigenised over the last five decades. NPCIL says the delay was because RAPP-8 uses a first-of-a-kind technology, while Covid-19 pandemic-induced financial stress has led to limited availability of qualified vendors in India for nuclear grade reactor equipment and components.

 

"The degraded financial condition of vendors, including EPC Contractors, led to delays in procuring raw materials for manufacture and consequential non-realisation of revised target commissioning dates," NPCIL said in its submission to the CERC.

 

Experts tracking the nuclear energy sector broadly agree that while India has developed a robust domestic ecosystem for large PHWR reactors, there are still some specialised components that need to be imported.

 

"We currently have limited domestic base of equipment manufacturing capacity in nuclear in line with lower demand thus far. India will need to focus on scaling up nuclear power equipment manufacturing as the country ramps up annual pace of capacity addition to achieve the vision of 100 GW nuclear power capacity by 2027," said Anujesh Dwivedi, partner at Deloitte India.

 

He added that the investor interest is likely to gather momentum as market opens up and equipment manufacturers start getting certainty of order inflow. "This ecosystem development will be very similar to what happened in the thermal power equipment segment years ago where the initial push came from state-owned enterprises and eventually the private sector came in," he pointed out. "In solar power equipment, too, where the private sector has played a more significant role, the market has developed gradually, with increasing level of indigenisation in line with Approved List of Modules and Manufacturers (ALMM) requirements, as the annual pace of capacity addition has scaled up."

 

A key component of expanding the vendor base could be the legislation passed last year opening up the nuclear power sector to private participating and also removing a contentious liability clause for nuclear energy companies.

 

The new law, the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, overhauls India's nuclear sector by ending the government's monopoly on power generation, allowing private companies and joint ventures to build, own, and operate nuclear plants, aiming to mobilise capital and reach 100 Gigawatt (GW) of capacity by 2047.

 

"So far, the domestic ecosystem for nuclear power equipment and supply chain has been dominated by a handful of large players and a few smaller companies. While the existing players are anticipated to scale-up and cater to the increased demand coming from PHWR projects, development of domestic manufacturing for PWR technology may require technical collaboration with global players," Dwivedi said. India currently has 18 PHWRs in operation, including three of 700 MW capacity - two in Gujarat and Unit-7 of RAPS in Chittorgarh district in Rajasthan.

 

That interest from large global energy companies and countries with experience in advanced nuclear technology is already forthcoming. A delegation of about 20 top US nuclear energy executives visited India in May, meeting Indian ministers, officials, and executives from nuclear energy companies to explore how US and Indian firms can work together on key areas, including reactor technology.

 

“The SHANTI Act is a major step. Now the question is how US and Indian companies can partner on technology, fuel, manufacturing, supply chains, engineering, project delivery, and long-term services,” Maria Korsnick, president and chief executive officer (CEO) of Washington-based Nuclear Energy Institute (NEI), who led the delegation, told Business Standard at the time. She had said that the Act had changed the conversation and that US firms are willing to support India across the full nuclear life cycle, including various types of reactors as well as advanced fuel technologies.

 

The Central Electricity Authority (CEA), which is under the power ministry, had in April this year organised a workshop with the key stakeholders to deliberate upon the operationalisation of the SHANTI Act. The deliberations in the workshop - attended by senior officials from CEA, Department of Atomic Energy (DAE), NTPC, NPCIL and financial institutions - established localisation of the nuclear supply chain as a necessary condition for achieving target capital costs.

 

"PHWRs, with near-100 percent indigenous supply after 50 years of programme development, serve as both the benchmark and the reference case. For imported Pressurised Water Reactor (PWR) and Small Modular Reactor (SMR) technologies, a phased manufacturing programme is the recommended approach: beginning with low and medium complexity components and progressively qualifying Indian vendors for safety-grade and Class 1 nuclear equipment as the programme scales," the CEA had said in its report from the workshop.