FOREIGN INVESTMENT IN NUCLEAR POWER – ECONOMY
News: India
said to mull allowing foreign investment in nuclear power
What's in the news?
● India is considering
overturning a ban on foreign investment in its nuclear power industry
and allowing greater participation by domestic private firms, two government
sources told Reuters, as part of a push for cleaner energy.
Key takeaways:
● The
measures have been recommended by a government panel, set up by think-tank Niti Aayog which is headed by Prime
Minister Narendra Modi.
Atomic Energy Act,1962:
● 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.
Changes recommended by the Panel:
● The
panel has recommended changes to the act and to India's foreign investment
policies so that both domestic and foreign private companies can complement
nuclear power generation by public Companies.
● The
government panel has also recommended
replacing old coal-based plants with Small Modular Reactors (SMRs), amid a
proposal to amend its electricity policy to not add any new coal-fired power
plants.
● India's
current nuclear power capacity is 6,780 MW and it is adding 21 more units with
a capacity of 7,000 MW by 2031.
● The
Department of Atomic Energy has said previously that several foreign companies
including Westinghouse Electric, GE-Hitachi, Electricite de France and Rosatom
were interested in participating in the country’s nuclear power projects as
technology partners, suppliers, contractors and service providers.
Why was the recent change recommended?
● The
aim is to reduce carbon emissions
and nuclear power is in focus because it can supply energy 24/7, unlike solar energy.
● The
emphasis was on private participation
through Small Modular Reactors (SMRs) to fast-track nuclear energy
generation, which accounts for 3% 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.
Go back to basics:
● India does not allow
foreign investment in the nuclear power sector.
● State-run Nuclear Power
Corp of India Ltd. (NPCIL) and Bharatiya Nabhikiya Vidyut Nigam are the only
two nuclear power generators in India.
● Thermal
power company NTPC and oil marketing firm Indian Oil Corp, both
government-controlled, have formed partnerships with NPCIL for nuclear power.
● The
country is a signatory to international conventions on nuclear safety and will
have to ensure that private companies comply with standards.
● India
imports uranium fuel for nuclear plants from Russia, Kazakhstan, Uzbekistan, France and Canada under bilateral
agreements.