Private Sector Participation in Nuclear Power

Syllabus: GS3/Energy

Context

• Nuclear Power Corporation of India Ltd (NPCIL) has invited requests for proposals (RFPs) from private players to set up Bharat Small Reactors (BSRs).

About

• It is the first formal move by the Union government to decentralise the country’s nuclear power sector.
• Proposals are made for setting up 220 MW Bharat Small Reactors (BSR) for captive use.
  • BSRs are Pressurised Heavy Water Reactors (PHWR) with an impeccable safety and excellent performance record.
  • BSRs can provide a sustainable solution for decarbonization of hard to abate industries.
• Background: Union Budget for FY 2024-25 proposed partnerships with the private sector for research and developing Bharat Small Reactors (BSR), Bharat Small Modular Reactors (BSMR) as well as newer nuclear energy technologies.
  • This announcement is aimed at India’s ambitious pursuit of the decarbonisation of energy generation and achieving 500 Gigawatts of non-fossil fuel-based energy generation in India by 2030.

Nuclear Energy

• Nuclear power is not renewable energy but it is a zero-emission clean energy source. 
• It generates power through fission, which is the process of splitting uranium atoms to produce energy. 
  • The heat released by fission is used to create steam that spins a turbine to generate electricity without the harmful by-products emitted by fossil fuels. 

Need for Private Players in Nuclear Sector

• Nuclear Capacity: India’s plans to increase its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32 and eventually 100 GW by 2047. 
• India’s Targets: To reduce the emission intensity of its GDP by 44% by 2030 from the 2005 level.
  • To achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
• Other Reasons: 
  • India is chasing nuclear energy as a source of power because it cannot reduce its emission intensity solely through renewable energy like solar, wind and hydro. 
  • Even if it does achieve its Nationally Determined Contribution (NDC) target only through renewable energy, the cost of power then would be very expensive.

Governance

• NPCIL: India’s nuclear sector is governed by the Atomic Energy Act, 1962, under which only government-owned entities such as NPCIL can generate and supply nuclear energy.
  • There has been no private sector involvement in India’s nuclear power sector so far.
• Conditions for Private Stakeholders: 
  • They have to find the land and incur the entire capex as well as opex including taxes. 
  • After completion of the plant, the asset will have to be transferred to NPCIL for operation.
  • The power plant will be given the status of captive generating plant and the private entity will have full right on the electricity generated from the plant. 
  • The firm will also be allowed to sell the power to other users.

Arguments in Favour of Private Sector Participation in Nuclear Power

• Improved Efficiency and Innovation: Private companies bring technological advancements, operational efficiency, and innovation, potentially reducing costs and improving safety standards.
• Increased Investment: Private players can attract more capital, helping to address the financial challenges of large nuclear projects.
• Faster Project Execution: Private entities, driven by competition and profit incentives, can complete nuclear projects faster and more effectively compared to government processes.
• Expertise and Global Standards: Private companies can bring global best practices, cutting-edge technology, and expertise to the nuclear industry, improving overall standards.
• Job Creation: The entry of private players can lead to increased employment opportunities in the nuclear sector, from construction to operations.

Arguments Against

• Safety and Security Risks: Private players may prioritize cost-cutting over rigorous safety measures, potentially risking catastrophic accidents.
• Lack of Transparency: Private companies may not be as transparent as public institutions, leading to a lack of accountability in the management of sensitive nuclear technologies.
• National Security Concerns: Involving private entities in nuclear power generation could raise concerns about the potential for foreign ownership, control, or influence over critical national infrastructure.
• Limited Regulatory Control: Ensuring strict regulatory oversight of private companies might be challenging, potentially leading to lapses in compliance with safety, environmental, and operational standards.
• Profit Motive Over Public Welfare: Private companies may prioritize profitability over public welfare, potentially compromising on environmental protections, worker safety, and the long-term sustainability of nuclear energy.

Way Ahead

• Clear Regulatory Framework: Establish a robust regulatory environment to ensure safety, compliance, and transparency, addressing concerns about accountability and national security.
• Public-Private Partnerships (PPPs): Promote partnerships where the government maintains oversight, while private players handle operations, innovation, and investment, ensuring a balance of interests.
• Gradual Implementation: Start with pilot projects and small-scale initiatives to test private sector involvement, ensuring risk management before large-scale implementation.

Source: BS