India's Clean Energy Transition – Promotion Of Nuclear Energy

1. INTRODUCTION

1.1. India has undertaken several measures to curb green-house gas emissions, and the most strategic shift can be witnessed in government policies aimed at moving away from traditional fossil fuels towards low carbon energy solutions, primarily based on renewable energy.¹ These measures align with Indias's commitment under its updated Nationally Determined Contributions under the Paris Agreement, which inter-alia, require reduction of emission intensity of its Gross Domestic Product (GDP) by 45 percent by 2030 from the 2005 levels.²

1.2. Recently, a further policy shift has also taken place with increased emphasis on nuclear energy as part of the renewable energy mix.³ Unlike solar and wind energy, nuclear energy is not intermittent in nature.⁴ Further, in contrast to conventional fossil fuels, nuclear energy has an overall lower carbon footprint.⁵ The non-intermittent and low-carbon emission energy profile highlights nuclear energy as a compelling alternative to conventional fossil fuels - poised to play a crucial role in the clean energy transition.

2. POLICY FOR NUCLEAR ENERGY IN INDIA

2.1. Nuclear energy in India received a strategic push with the announcement of a national nuclear mission ("Nuclear Mission") in the Union Budget of 2025-2026. The Nuclear Mission aims to achieve a target of 100 GW of nuclear energy capacity by 2025-2026 by focusing on the development of Small Nuclear Reactors (called the Bharat Small Reactors i.e., "BSRs") and Small Modular Nuclear Reactors (called the Bharat Small Modular Reactors i.e., "BSMRs").⁶

2.2. The development of the BSRs is expected to be based on the already proven and operational 220 MW Pressurised Heavy Water Reactor design. The government aims to encourage the participation of the private sector for the accelerated development of BSRs, where the private player would be responsible for provision of land, cooling water and capital, while the Nuclear Power Corporation of India Limited (NPCIL) would be responsible for design, quality, operation and maintenance of such reactors.⁷

2.3 Further, the push by the government for the development of BSMRs is expected to accelerate the clean energy transition by introducing 'part-modularity' in nuclear energy generation facilities. Modularity refers to the ability to produce factory-made parts that can be transported with ease and assembled on site.⁸ This modularity can be expected to benefit nuclear energy generation facilities by: (i) standardising the reactor design and construction, (ii) introducing certainty in supply chain management, and (iii) reducing the capital outlay, for construction of nuclear reactors.⁹

3. KEY CHALLENGES TO THE PROMOTION OF NUCLEAR ENERGY

3.1. While the government has undertaken definitive steps for involvement of the private sector in the nuclear energy sector¹⁰, large scale deployment of small nuclear reactors with the participation of the private sector, as envisioned under the Nuclear Mission, suffers from the absence of a supportive regulatory environment.

3.2. For instance, Section 14 (1-A) of the Atomic Energy Act, 1962 ("AE Act") restricts the grant of licenses for the use of any plant for the production, development and use of atomic energy, to central government departments and government companies, thereby prohibiting the private investments into the nuclear energy sector.

3.3. Similarly, Section 20 of the AE Act provides that no patents can be granted for inventions which in the opinion of the government relate to the production, control, use or disposal of atomic energy or ensuring of safety in atomic energy operations, disincentivising private participation in research and development related activities in the nuclear energy space.

3.4. Additionally, the ambiguities under the Civil Liability for Nuclear Damage Act, 2010 ("Civil Liability Act") has been a cause of concern for the international suppliers while engaging with the Indian nuclear energy sector.¹¹ This hesitation of international suppliers specifically stems from Section 17 of the Civil Liability Act which provides that in the event of a nuclear accident, the operator of the nuclear installation (after paying compensation under Section 6 of the Civil Liability Act) shall have a right to recourse, where – (a) such right to recourse has been provided under a contract in writing; (b) the nuclear incident has resulted as a consequence of an act of the supplier or his employees, which includes supply of equipment or material with patent and latent defects or sub-standard services; (c) the nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage.¹²

3.5. While the government has argued that the provisions of the Civil Liability Act are in strict conformity with the Convention on Supplementary Compensation for Nuclear Damage ("CNSC"), stakeholders have pointed out that Section 17(b) – which provides the operator a recourse to the supplier in the event the supplied equipment suffers from defects or in the event of substandard services – does not align with the CNSC – exposing the international suppliers with liabilities which are considered unconventional from an international standpoint.

3.6 The government has maintained that Section 17(b) is only enabling in nature, and is to be read along with Section 17(a), which implies that the suppliers would only be responsible for the defects in the supplied equipment/ services, if the same has been captured under the relevant supply/service contract.¹³

3.7 Apart from the absence of a supportive regulatory environment, construction of nuclear energy facilities also suffers from social resistance on account of scepticism by local communities where such nuclear energy generation facilities are proposed to be constructed. Local communities are concerned with the safety risks and environmental impacts associated with the development of nuclear energy generation facilities.¹⁴

3.8 Further, given that India currently is dependent on importing uranium from other countries to fuel its nuclear reactors,¹⁵ the long-term success of the Nuclear Mission remains dependent upon international relations and geo-political situations. While strategic measures, such as – the National Critical Mineral Mission with focus on boosting domestic production, recycling, and developing trade and market for critical minerals – have been introduced, their long-term impact remains to be evaluated.¹⁶

4. WAY FORWARD AND CONCLUSION

4.1 To ensure the success of the Nuclear Mission, the focus would need to shift to a multi-pronged approach to address the above concerns. This includes development of a supportive regulatory environment, aligned with the internationally accepted standards and strategic amendments to nuclear energy related laws, to promote private participation in the nuclear energy sector. Further, local communities should be sensitised through sustained outreach programs – focused on the benefits and safety profile of nuclear energy generation facilities. Lastly, the initiatives focused on the indigenisation of nuclear supply chain will have to be undertaken to secure the Nuclear Mission against unforeseeable geo-political dynamism. The bill proposing the necessary amendments to the existing nuclear energy framework is expected to be tabled in Parliament during the upcoming monsoon session.

Footnotes

1 India's Renewable Energy Capacity Hits New Milestone: Renewable Energy now constitutes more than 46.3% of total capacity, Press Information Bureau. Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2073038

2 India achieves two targets of Nationally Determined Contribution well ahead of time, Press Information Bureau. Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1987752

3 Nuclear Power in Union Budget 2025-26, Press Information Bureau. Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=2099244.

4 Nuclear Power is the Most Reliable Energy Source and It's Not Even Close, US Department of Energy. Available at: https://www.energy.gov/ne/articles/nuclear-power-most-reliable-energy-source-and-its-not-even-close.

5 Coal and Gas are Far More Harmful than Nuclear Energy, NASA Goddard Institute for Space Studies. Available at: https://www.giss.nasa.gov/research/briefs/archive/2013_kharecha_02/.

6 Nuclear Power in Union Budget 2025-26, Press Information Bureau. Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=2099244.

7 Nuclear Power in Union Budget 2025-26, Press Information Bureau. Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=2099244.

8 A Report on the Role of Small Modular Reactors in the Energy Transition, NITI Aayog. Available at: https://www.niti.gov.in/sites/default/files/2023-05/The-Role-of-Small-Modular-Reactors-in-the-Energy-Transition-05162023.pdf.

9 Table 3.3: Comparison of SMRs and Large Reactors (LRs), A Report on the Role of Small Modular Reactors in the Energy Transition, NITI Aayog. Available at: https://www.niti.gov.in/sites/default/files/2023-05/The-Role-of-Small-Modular-Reactors-in-the-Energy-Transition 05162023.pdf .

10 NPCIL Invites Proposals for Setting Up 220 MW Bharat Small Reactors (BSR) for Captive Use, Press Information Bureau. Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=2089048.

11 Frequently Asked Questions and Answers on Civil Liability for Nuclear Damage Act 2010 and related issues, Ministry of External Affairs, Government of India. Available at: https://www.mea.gov.in/pressreleases.htm?dtl/24766/Frequently_Asked_Questions_and_Answers_on_Civil_Liability_for_Nuclear_Damage_Act_2010_and_related_issues .

12 Section 17, Civil Liability for Nuclear Damage Act, 2010.

13 Frequently Asked Questions and Answers on Civil Liability for Nuclear Damage Act 2010 and related issues, Ministry of External Affairs, Government of India. Available at: https://www.mea.gov.in/pressreleases.htm?dtl/24766/Frequently_Asked_Questions_and_Answers_on_Civil_Liability_for_Nuclear_Damage_Act_2010_and_related_issues .

14 Protest Against Jaitapur Nuclear Power Plant, Press Information Bureau. Available at: https://pib.gov.in/newsite/PrintRelease.aspx?relid=93573.

15 The Future of Nuclear Energy in India, Observer Research Foundation. Available at: https://www.orfonline.org/research/the-future-of nuclear-energy-in-india.

16 National Critical Mineral Mission – Powering India's Clean Energy Future, Press Information Bureau. Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2120525 .

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