Syllabus
GS Paper 3 – Infrastructure – Energy, Ports, Roads, Airports, Railways etc.
Context
With the government proposing private involvement, the existing framework governing the nuclear energy sector needs to be assessed
Source
The Hindu| Editorial dated 1st October 2024
Having private participation in India’s nuclear energy
In July 2024, the Government of India announced an expansion of the nuclear energy sector, proposing private sector involvement for the development of Bharat Small Reactors (BSR) and Bharat Small Modular Reactors (BSMR) Small Modular Reactors (BSMR) . This initiative aims to support India’s commitment to decarbonisation and achieving 500 GW of non-fossil fuel-based energy by 2030.
However, India’s nuclear framework faces several legal and regulatory challenges, particularly regarding private sector involvement and liability laws.
Bharat Small Reactors (BSRs)
- Bharat Small Reactors are compact nuclear reactors designed for small-scale electricity generation, offering an alternative to large conventional nuclear plants.
- Technology: These reactors employ India’s well-established 220-megawatt Pressurized Heavy Water Reactor (PHWR) technology, which already powers 16 operational units across the country.
- Innovation: A key innovation is the inclusion of private sector participation in the development and deployment of these reactors, marking a historic shift in India’s nuclear energy policy.
Advantages of Bharat Small Reactors
- Flexible Siting: Can be installed in a variety of locations, including remote or inaccessible regions.
- Rapid Deployment: Quicker to construct and operationalize compared to larger nuclear facilities, enabling faster energy production.
- Cost-Effective: Likely to offer lower construction costs due to their smaller size and reduced time to completion.
Why Does India Need Bharat Small Reactors?
- Energy Accessibility: Perfect for providing reliable electricity to underserved and remote regions across India.
- Industrial Use: Ideal for functioning as captive power units for energy-intensive industries like cement and steel.
- Clean Energy Transition: Contributes to India’s goal of diversifying its energy mix by reducing dependence on thermal power, aligning with cleaner energy targets.
Existing Legal Framework
- Atomic Energy Act, 1962 (AEA)
- The AEA, 1962 gives the central government sole control over the production, development, and disposal of atomic energy, restricting private sector participation.
- Amendment to AEA
- The Atomic Energy (Amendment) Act, 1987 maintains that only the government can control nuclear energy operations, leaving limited room for private sector involvement in critical areas.
- Section 3(a) of AEA
- This section specifically prohibits private entities from engaging in nuclear R&D and technology development, restricting their role to engineering and construction.
Challenges for Private Sector Involvement
- Regulatory Uncertainty
- The Supreme Court’s dismissal of a petition challenging the AEA’s restrictions and ongoing challenges to the Civil Liability for Nuclear Damage Act (CLNDA) contribute to legal uncertainty for private investments.
- Pending Litigation on CLNDA
- A challenge to the constitutionality of the CLNDA has been pending for over 12 years, leaving uncertainty over liability provisions for private players.
- Constitutionality of Liability Laws
- Concerns about nuclear safety, absolute liability, and the polluter pays principle under the CLNDA have slowed down private sector participation.
- Investment Needs
- India’s nuclear energy infrastructure requires substantial investments, with the NITI Aayog reportestimating a need for $26 billion to expand capacity.
- High Capital and Skill Requirements
- The expansion of nuclear energy requires skilled construction resources and high-risk management, adding complexity to the involvement of private players.
Involvement of Private Entities
- Role of NITI Aayog and DAE Report
- A 2022 report by NITI Aayog and the Department of Atomic Energy highlighted the potential for private involvement in Small Modular Reactors (SMRs) through a conducive regulatory framework.
- Current Private Participation
- Private companies like Megha Engineering and Reliance have been involved in engineering, procurement, and construction (EPC) but not in nuclear R&D due to legal restrictions.
- Public-Private Partnerships (PPP)
- A possible model for private participation involves public-private partnerships where government bodies like NPCIL retain majority ownership while allowing private investment.
Structural and Regulatory Needs
- Reforming Atomic Energy Regulatory Board
- Strengthening the Atomic Energy Regulatory Board (AERB) by ensuring its independence could help build private sector confidence in nuclear investments.
- Nuclear Safety and Liability
- Addressing higher standards of liability is crucial due to the potential for catastrophic accidents, as seen in the Chernobyl and Fukushima disasters.
- Transparency and Accountability
- Public-private partnerships could ensure accountability under the Right to Information (RTI) Act , improving transparency while retaining government control.
Conclusion
India’s push to include private entities in its nuclear energy sector reflects its ambitious goals of decarbonisation and energy security. However, legal restrictions under the Atomic Energy Act, 1962, pending constitutional challenges to the CLNDA, and regulatory uncertainties present significant hurdles. A path forward may involve public-private partnerships, legal reforms, and clearer liability frameworks to ensure private sector confidence while maintaining robust oversight. These developments are crucial for India’s energy transition and will shape the future of nuclear energy in the country.
Related PYQ
With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy? [ UPSC Civil Services Exam – Mains 2018]
Practice Question
Discuss the challenges faced by India’s nuclear energy sector, especially in light of private sector participation, regulatory frameworks, and liability issues? [150 words]
Guidelines to Answer
- Introduction:
- Start by briefly introducing India’s nuclear energy sector and its significance in decarbonization and achieving COP26 targets.
- Mention the Union Budget 2024-25 and the push for private participation in nuclear energy, including the development of Bharat Small Reactors (BSR) and Bharat Small Modular Reactors (BSMR).
- Body:
- Discuss the Atomic Energy Act, 1962 (AEA) restrictions, limiting private sector involvement, and the pending legal challenges.
- Highlight the lack of independence in regulatory bodies like AERB and how unresolved Nuclear Safety Regulatory Authority Bill, 2011 adds complexity.
- Cite examples like Chernobyl and Fukushima to underline the importance of stringent safety standards and the higher liabilities that private entities would face.
- Conclusion:
- Conclude by suggesting a balanced approach, involving public-private partnerships with strict regulatory oversight, to promote private participation while ensuring safety, liability, and transparency.