Syllabus: GS3/Energy
Context
- The US Department of Energy (DoE) has granted final approval for a US company to design and build nuclear power plants in India.
About
- The India-US civil nuclear agreement was signed in 2007 but took 20 years of negotiations, legal clearances, and regulatory approvals to reach this stage.
- India had insisted on local design and manufacturing of nuclear plants, which the US has now agreed to.
- Amendments to the Atomic Energy Act 1962 also have to be initiated to enable private companies to enter nuclear generation as operators, which is currently restricted to only state-owned companies.
Highlights of the Deal
- Regulatory Approval: The DoE approved Holtec International’s proposal as an American Company, allowing it to transfer SMR technology to three Indian firms: Larsen & Toubro, Tata Consulting Engineers, and Holtec Asia.
- SMR Technology: US and Indian firms will jointly manufacture Small Modular Reactors (SMRs) and co-produce all parts.
- US Condition: The US has placed a condition that the jointly-designed nuclear plants cannot be transferred to other entities or countries without prior written consent.
Significance
- Diplomatic Achievement: The deal strengthens US-India relations and gives India access to advanced PWR (Pressurized Water Reactor) technology, previously limited to government corporations.
- China Competition: The agreement comes as China expands its Small Modular Reactor (SMR) plans, with India and China competing for leadership in the Global South with affordable nuclear technology.
- Private Sector: The deal is also being seen as a major win for India’s private sector, which will gain specialisation and expertise in designing and manufacturing nuclear power plants.
| Small Modular Reactors (SMR) – These are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors. – SMRs, which can produce a large amount of low-carbon electricity, are: 1. Small – physically a fraction of the size of a conventional nuclear power reactor. 2. Modular – making it possible for systems and components to be factory-assembled and transported as a unit to a location for installation. 3. Reactors – harnessing nuclear fission to generate heat to produce energy. – Significance: Advanced SMRs offer many advantages, such as relatively small physical footprints, reduced capital investment, ability to be sited in locations not possible for larger nuclear plants, and provisions for incremental power additions. 1. SMRs also offer distinct safeguards, security and nonproliferation advantages. |
Need for Private Players in Nuclear Sector
- Nuclear Capacity: India’s plans to increase its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32 and eventually 100 GW by 2047.
- Energy Demand Growth: India’s electricity demand is expected to increase 4-5 times by 2047, and nuclear power will help meet base-load demand alongside renewables.
- India’s Targets: To reduce the emission intensity of its GDP by 44% by 2030 from the 2005 level.
- To achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
- Roadmap for 100 GW: A roadmap is being developed with stakeholders, and while challenges remain, achieving the 100 GW target is seen as both ambitious and achievable
Governance
- Recently, Nuclear Power Corporation of India Ltd (NPCIL) has invited requests for proposals (RFPs) from private players to set up Bharat Small Reactors (BSRs).
- NPCIL: India’s nuclear sector is governed by the Atomic Energy Act, 1962, under which only government-owned entities such as NPCIL can generate and supply nuclear energy.
- There has been no private sector involvement in India’s nuclear power sector so far.
Arguments in Favour of Private Sector Participation in Nuclear Power
- Improved Efficiency and Innovation: Private companies bring technological advancements, operational efficiency, and innovation, reducing costs and improving safety standards.
- Increased Investment: Private players attract more capital, helping to address the financial challenges of large nuclear projects.
- Faster Project Execution: Driven by competition and profit incentives, they can complete nuclear projects faster and more effectively compared to government processes.
- Expertise and Global Standards: Private companies will bring global best practices, cutting-edge technology, and expertise to the nuclear industry, improving overall standards.
- Job Creation: It will lead to increased employment opportunities in the nuclear sector, from construction to operations.
Arguments Against
- Safety and Security Risks: Private players prioritize cost-cutting over rigorous safety measures, potentially risking catastrophic accidents.
- Lack of Transparency: They may not be as transparent as public institutions, leading to a lack of accountability in the management of sensitive nuclear technologies.
- National Security Concerns: Involving private entities in nuclear power generation raises concerns about the potential for foreign ownership, control, or influence over critical national infrastructure.
- Limited Regulatory Control: Ensuring strict regulatory oversight of private companies might be challenging, potentially leading to lapses in compliance with safety, environmental, and operational standards.
- Profit Motive Over Public Welfare: Private companies prioritize profitability over public welfare, potentially compromising on environmental protections, worker safety, and the long-term sustainability of nuclear energy.
Way Ahead
- Clear Regulatory Framework: Establish a robust regulatory environment to ensure safety, compliance, and transparency, addressing concerns about accountability and national security.
- Public-Private Partnerships (PPPs): Promote partnerships where the government maintains oversight, while private players handle operations, innovation, and investment, ensuring a balance of interests.
- Gradual Implementation: Start with pilot projects and small-scale initiatives to test private sector involvement, ensuring risk management before large-scale implementation.
Source: IE
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