Revitalizing India's Nuclear Energy Sector - The Need for Reform

Context:

Finance Minister Nirmala Sitharaman, in her recent budget speech, announced amendments to two key atomic Acts (the Atomic Energy Act, 1962 and the CLNDA, 2010) to revive India's nuclear energy sector.

This long-pending reform comes at a crucial time when the world is witnessing a nuclear energy resurgence.

India’s Declining Nuclear Prospects:

• India was among the early adopters of nuclear energy, establishing its first nuclear power plant in Tarapur (Maharashtra) in 1969.
• Despite early progress, India's nuclear power capacity has stagnated at around 8,200 MW, whereas China and South Korea have significantly expanded their nuclear energy programs.
• Successive governments have revised nuclear capacity targets but failed to meet them. The FM has now set a target of 1,00,000 MW by 2047, necessitating legal reforms.

Historical Challenges and External Constraints:

• India's nuclear progress was initially supported by Western collaborations in the 1950s.
• The introduction of the Nuclear Non-Proliferation Treaty (NPT) in 1970 restricted nuclear technology transfers, placing India at a disadvantage.
• India's 1974 nuclear test (code named Smiling Buddha) led to global sanctions and enhanced nuclear cooperation between China and Pakistan.
• The 1998 nuclear tests (code named Operation Shakti) redefined India as a nuclear-weapon state, paving the way for the India-US Civil Nuclear Agreement (2005-08).

Impact of the Civil Liability for Nuclear Damage Act (CLNDA), 2010:

• While the India-US nuclear deal created opportunities for civil nuclear cooperation, the CLNDA restricted foreign and private investment.
• Global norms require liability for nuclear accidents to rest with the plant operator. However, India's CLNDA holds suppliers accountable, discouraging private and foreign participation.
• The Modi government attempted to address this issue post-2014 but failed to attract significant investment.

Structural Issues in India's Nuclear Policy:

• The Atomic Energy Act, 1962, grants the government monopoly over nuclear energy development, limiting private sector participation and resulting in inadequate capital and slow expansion.
• It also prevents the creation of a nuclear ecosystem that can drive innovation, create economies of scale and develop networks of global collaboration to accelerate atomic power generation in India.
• Today, the Department of Atomic Energy (DAE) relies entirely on government funding.

Lessons from Space Sector Reforms:

• Private and public-sector companies such as Tata, Godrej, L&T, Walchandnagar and BHEL already supply critical nuclear components and could play a larger role in power plant construction.
• Today, they are in a position to take charge of building power plants on their own while relying on the DAE to provide some of the technologies.
• The liberalization of the space sector has spurred private investment and innovation.
• A similar approach in nuclear energy, with the DAE focusing on research and allowing private companies to build and operate nuclear plants, could accelerate growth.

Conclusion - The Path Forward:

• Science-and-technology monopolies have outlived their utility and have become a drag on the prospects for India’s technological transformation.
• Government agencies like the DAE, ISRO and DRDO should focus on research and cede the production of equipment and related industrial activity to the private sector.
• Amending the Atomic Energy Act, 1962 and the CLNDA, 2010 is crucial to unlocking India's nuclear potential.
• Encouraging private sector participation, ensuring investment-friendly liability laws, and leveraging global partnerships will be key to meeting India's 2047 nuclear energy targets.
• A reformed nuclear sector can significantly contribute to India's energy security and green transition.

Q1. What is the Nuclear Non-Proliferation Treaty (NPT)?

Ana. The NPT is an international agreement that aims to prevent the spread of nuclear weapons, while also promoting the peaceful use of nuclear energy and working towards nuclear disarmament.

Q2. What is the Atomic Energy Act, 1962?

Ans. It is an Act to provide for the development, control and use of atomic energy for the welfare of the people of India and for other peaceful purposes. 

Q3. What is the Civil Liability for Nuclear Damage Act (CLNDA), 2010?

Ans. It is an Indian law that establishes a legal framework to hold the operator of a nuclear installation strictly liable for any nuclear damage caused by a nuclear incident.

Q4. What is India’s installed nuclear energy capacity?

Ans. As of November 2024, India has 24 nuclear reactors in operation in 8 nuclear power plants, with a total installed capacity of 8,180 MW (~3% of total power generation).

Q5. What is the India-US Civil Nuclear Agreement?

Ans. The US-India Civil Nuclear Agreement, also known as the 123 Agreement, was signed in 2008. The agreement allows for cooperation between the two countries in the peaceful use of nuclear energy. 

Source:IE