A Niti Ayog panel has recommended that the government consider lifting its ban on foreign investment in its nuclear power industry. The news agency Reuters, citing two government sources, reported that as a part of the cleaner energy push, the government is considering overturning a ban on foreign investment in its atomic sector and allowing greater participation by domestic private firms.
The recommendation came from a government panel, set up by the think-tank Niti Aayog. Under India's Atomic Energy Act 1962, the government plays a central role in developing and running nuclear power stations. Domestic private companies are allowed to participate as "junior equity partners" by supplying components and helping build them.
The consolidated FDI Policy of puts atomic energy on the list of prohibited sectors. However, there is no restriction on FDI in the nuclear industry for manufacturing equipment and providing other supplies for nuclear power plants and related other facilities.
According to the report, Niti Ayog's panel has recommended changes in both the act so that both domestic and foreign private companies can complement nuclear power generation by public companies.
The aim is to reduce carbon emissions and nuclear is in focus because it can supply energy 24/7, unlike solar energy, the officials told Reuters.
The report noted that the Department of Atomic Energy has earlier said that various foreign companies such as Westinghouse Electric, GE-Hitachi, Electricite de France, and Rosatom have expressed interest in becoming involved in India's nuclear power projects as technology partners, suppliers, contractors, and service providers.
The officials told Reuters that the emphasis is on private participation through small modular reactors (SMRs) to fast-track nuclear energy generation. Currently, it accounts for only 3 per cent of India's total power production.
Factory-built and ready-to-shift, each SMR produces up to 300 megawatts (MW) and requires less capital, time, and land than conventional reactors. They can also safely be deployed in populated areas, the officials said.
In India, Nuclear Power Corporation of India Ltd. (NPCIL) and Bharatiya Nabhikiya Vidyut Nigam are the only two companies responsible for generating nuclear power. However, government-controlled companies such as Thermal power company NTPC and oil marketing firm Indian Oil Corp have partnered with NPCIL to participate in nuclear power.
Last year in December, Minister of State in the Department of Space and Department of Atomic Energy Jitendra Singh said the share of nuclear power in the total electricity generation in the country was about 3.1 per cent in 2020-21.
“The net-zero targets are expected to be met through a combination of various clean energy sources, including nuclear power. In this context, the present nuclear power capacity of 6,780 MW is planned to be increased to 22,480 MW by 2031 on progressive completion of projects under construction and accorded sanction. More nuclear power reactors are planned in future,” Singh had said.
In the same month, the atomic energy department held closed-door consultations with domestic and global industry players who showed significant interest, one of the officials said.
"With the right policy push, we see private sector taking up significant deployment in the country," said the official.
The recommendations will next be submitted to Modi's office, said the officials. Adding that the panel has also recommended replacing old coal-based plants with SMRs, amid a proposal to amend its electricity policy to not add any new coal-fired power plants.
As a signatory to international conventions on nuclear safety, India will need to ensure that private companies adhere to the established standards. The country currently imports uranium fuel for its nuclear plants from Russia, Kazakhstan, Uzbekistan, France, and Canada through bilateral agreements.