The Indian government is set to invite private firms to invest approximately $26 billion in the nuclear energy sector, aiming to bolster electricity production from low-carbon sources. This initiative marks a significant departure as it’s the first time the government seeks private investment in nuclear power. This crucial non-carbon-emitting energy source currently contributes less than two percent to India’s electricity generation.
According to a report, the government engages with at least five private firms, including industry giants like Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd. The investment is projected to be around ₹44,000 crore each, signaling a significant push towards achieving India’s goal of having 50 percent of its installed electric generation capacity sourced from non-fossil fuels by 2030, up from the current 42 percent.
The government will invite private firms to invest about $26 billion in in the nuclear energy sector.
It is in talks with five private firms including Reliance Industries, Tata Power, Adani Power & Vedanta Ltd to invest around ₹44,000 crore eachhttps://t.co/gPaAYhLWZF
— Lakshmisha K S (@lakshmishaks) February 20, 2024
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India Aims To Harness Nuclear Energy With Private Investment
The Department of Atomic Energy and state-run Nuclear Power Corp of India Ltd (NPCIL) has been actively engaging with private companies over the past year to finalize the investment plan. As per the report, the proposed investment aims to add 11,000 megawatts (MW) of new nuclear power generation capacity by 2040.
NPCIL operates India’s existing fleet of nuclear power plants with a capacity of 7,500 MW and has already committed investments for an additional 1,300 MW. Under the investment plan, private companies will finance the construction of nuclear plants, acquire land and water, and undertake construction activities outside the reactor complex.
Despite the private investments, the rights to build, operate, and manage the stations and fuel management will remain with NPCIL in compliance with existing laws. The private firms are anticipated to generate revenue from electricity sales, while NPCIL will oversee project operations for a fee.
This investment initiative does not require amendments to India’s Atomic Energy Act of 1962 but requires final approval from the Department of Atomic Energy. Although Indian law prohibits private companies from establishing nuclear power plants, they can supply components and equipment and engage in construction contracts for activities outside the reactors.
India has faced challenges in meeting its nuclear power capacity addition targets due to difficulties in procuring atomic fuel supplies. However, a 2010 agreement with the United States to supply reprocessed nuclear fuel has eased some constraints. Despite these efforts, India’s atomic compensation laws have posed obstacles in negotiations with foreign power plant builders like General Electric and Westinghouse. This led to deferring nuclear power addition targets from 2020 to 2030.
