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Indian Express
3 days ago
- Business
- Indian Express
Work underway for changes in two key laws, can open up civil nuclear sector
Legislative groundwork is underway for multiple amendments to two overarching laws governing the country's atomic energy sector. The changes will align them with legal provisions globally, address festering investor concerns and set the stage for opening up India's civil nuclear sector. The first is the easing of provisions in India's nuclear liability law. Called the Civil Liability for Nuclear Damage Act, 2010 (CLNDA), it sought to create a mechanism for compensating victims from damages caused by a nuclear accident, and allocating liability and specifying procedures for compensation. But it was subsequently cited as an impediment by foreign equipment vendors such as US-based Westinghouse Electric and French nuclear company Framatome. This was on the grounds that this legislation channelised operators' liability to suppliers through a provision called the right of recourse of the operator — an operator of a nuclear plant would typically be a company such as the state-owned Nuclear Power Corporation of India Ltd (NPCIL) while the suppliers could include foreign reactor manufacturers such as Westinghouse or Framatome, but also domestic equipment suppliers such as L&T or Walchandnagar Industries. Foreign vendors, both involved in the nuclear island and the conventional parts of an atomic power project, cited this specific provision of the operators' 'right of recourse' as a reason for worries about investing in India's nuclear sector due to fear of incurring future liability in the event of a nuclear accident. A set of around 11 legal amendments are now being worked out for the CLNDA, of which two are key. One is an amendment aimed at diluting a specific provision – Section 17 (b) of the CLNDA, which is seen to be at odds with similar nuclear liability legislations enacted worldwide. According to Section 17 of the CLNDA, the operator of the nuclear installation, after paying the compensation for nuclear damage, shall have the right to recourse where – (a) such right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services; and (c) the nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage. Provision (b) is the one that is a specific insertion in the Indian context and is cited as an impediment by foreign vendors, none of whom have invested in a single project in India since the legislation came into force. This is a cause for worry for Indian sub-vendors too, since the term 'supplier' is seen to be too broad in scope. 'There are multiple amendments (now) being worked out. The most important include bringing Section 17 on par with international benchmarks. The other is to clarify the definition of a supplier and address the concerns raised by domestic nuclear equipment manufacturers that sub-suppliers are also deemed to be included in the current definition, given that there is no distinction of the terms supplier in the current legislation,' a senior government official involved in the deliberations said. Smaller Indian vendors are learnt to have raised this as an issue. The official said that in any case, nuclear projects in India have to go through a vetting by the country's atomic regulator AERB, which is sufficiently empowered to ask for the right of recourse to be expressly provided for in a contract in writing while clearing all future contracts. There are also deliberations on capping the liability of equipment vendors, both in terms of limiting the monetary exposure to the original value of the contract and a possible time frame limitation on when this liability would apply. While this was being targeted for the upcoming monsoon session of Parliament, the official indicated that this might get spilled over to the next session given the tight timelines. The second major amendment in the works is aimed at enabling private companies to enter nuclear power plant operations in India, and could also set the stage for foreign companies to potentially take a minority equity exposure in upcoming nuclear power projects. Hitherto, atomic energy has been one of India's most closed sectors. The set of legal amendments are being seen as a reform push that could help leverage the commercial potential of the Indo-US civil nuclear deal, nearly two decades after it was inked. New Delhi is also keen to package this as part of a broader trade and investment outreach with Washington DC, which could eventually culminate with a trade pact that is currently under negotiation. Amendments to the second key legislation – the Atomic Energy Act, 1962 – are being initiated to enable private companies, and possibly even foreign players at a later stage, to enter nuclear generation as operators, which is currently restricted to only state-owned companies such as NPCIL or NTPC Ltd. The government has committed to getting both these legislations passed, including an explicit assurance to this effect made in the Union Budget presented earlier this year, even though the legislative route for at least one of the two proposed Bills would be an arduous one. The amendments in the CLNDA would effectively bring India's nuclear liability legislative framework in line with the provisions of the 1997 Convention on Supplementary Compensation for Nuclear Damage (CSC), which sought to establish a worldwide liability regime. Under this, a country that is a party to either the 1963 Vienna Convention or the 1960 Paris Convention could automatically become a party to the CSC, while a country that was not a party to either of these conventions could also become a party to the CSC if its national law on nuclear liability were to be in compliance with the provision of the CSC and its annexures. India, not being a party to the Vienna or the Paris Conventions, signed the CSC on October 29, 2010 on the basis of its national law namely the CLND Act and ratified it on February 4, 2016, thereby becoming a 'State Party' to the CSC. The tweaks now proposed in the CLND Act would align it further with the CSC provisions, officials indicated. Also, on the definition of the 'supplier', and whether it is always assumed to be a foreign company, there is now a move to clarify this aspect contained in Rule 24 of the CLND Rules, which says that 'supplier' shall include a person who: (i) manufactures and supplies, either directly or through an agent, a system, equipment or component or builds a structure on the basis of functional specification; or (ii) provides build to print or detailed design specifications to a vendor for manufacturing a system, equipment or component or building a structure and is responsible to the operator for design and quality assurance; or (iii) provides quality assurance or design services. While the interpretation of this formulation is that 'the system designer and technology owner' is the supplier, there is lack of clarity on whether the terms supplier includes only say a reactor provider such as Westinghouse, or even a small electrical package provider that bagged a tender for Rs 1 crore for a nuclear project. This clarification of the term supplier would also be done in the proposed amendments, the official said. 'There is an economic necessity for these amendments to be done,' the official said, indicating the amendments are now likely to spill over beyond the monsoon session. The big challenge would be to build the political consensus to push the two major legislative amendments through. All this comes less than three months after the US Department of Energy (DoE) accorded an unprecedented regulatory clearance to Holtec International, based in Camden, New Jersey, that potentially sets it on course to leverage the commercial potential of the Indo-US civil nuclear deal. The March 26 approval from DoE effectively cleared Holtec International's application for specific authorisation with respect to the DoE's restrictive regulation that is referred to as '10CFR810'. This specific authorisation (SA IN2023-001) now conditionally permitted Holtec to transfer 'unclassified small modular reactor technology' (SMRs) to its regional subsidiary Holtec Asia, as well as Tata Consulting Engineers Ltd, and Larsen & Toubro Ltd in India. The issue of getting a specific '10CFR810' authorisation (Part 810 of Title 10, Code of Federal Regulations of the US Atomic Energy Act of 1954) had been a big regulatory hurdle for New Delhi. This is because the regulation, while giving American companies such as Holtec the ability to export equipment to countries such as India under some strict safeguards, explicitly barred them from manufacturing any nuclear equipment or performing any nuclear design work in India. This provision was a non-starter from New Delhi's perspective, which wanted to participate in manufacturing the SMRs and co-produce the nuclear components for its domestic needs. With Washington DC having eased out the regulatory hurdle in the form of the 810 authorisation, the ball is now in New Delhi's court to push through the two legislations at its end. Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More
The Hindu
05-06-2025
- Business
- The Hindu
Should India amend its nuclear energy laws?
Discussions are ongoing in India to amend the nuclear liability framework, regulated by the Civil Liability for Nuclear Damages Act (CLNDA), 2010, and the Atomic Energy Act (AEA), 1962, to allow private companies to build and operate nuclear energy-generation facilities. This move is part of a broader strategy to expand India's nuclear energy capacity from the current 8 GW to 100 GW by 2047, aligning with the country's clean energy goals. Should India amend its nuclear energy laws? Ashley Tellis and D. Raghunandan discuss the question in a conversation moderated by Kunal Shankar. Edited excerpts: Do you support the proposed amendments to India's nuclear energy laws? Ashley Tellis: If India has set for itself a goal of expanding nuclear energy, it cannot reach that goal without expanding its domestic capacity. If we are talking of a timeline that is, say, 20 years, we must supplement those indigenous capabilities with foreign participation. This is where there is a roadblock. Current Indian law prevents foreign participation. The imagined future when we negotiated the U.S.-India civil nuclear deal in 2008 was that foreign companies would participate in India's nuclear renaissance. That dream has been frustrated by the legal evolution in the liability regime in India since 2000. So I would cheer the Prime Minister on, with respect to getting these amendments done. D. Raghunandan: The idea of amending the law to attract foreign investment to expand nuclear power generation capacity in India is based on two flawed arguments or assumptions. The first is that the roadblock to expansion of nuclear power is one of investment. The second is that no major nuclear supplier country has shown domestic capacity expansion at the rate at which we assume India will expand. We have not seen that happen in the U.S. or France. Britain does not have much capacity anyway; Japan is on a slow track. Only China, perhaps, has the capacity to expand at scale and I don't see major Chinese investment coming into India. Ashley Tellis: The Indian nuclear liability law is a genuine impediment to foreign participation in the sector. Companies from France, Japan, and the U.S. have said they cannot enter the market if the current law stands. Russia is an interesting case because Rosatom is a parastatal. Even Rosatom refused to accept India's liability law. India indemnified Rosatom through a contractual agreement reached in 2008 before the liability law was passed. After 2010, that is not an option available to the government because to indemnify through a private contract would violate parliamentary intention. This law affects Indian industry as well. The Department of Atomic Energy (DEA) had NPCIL (Nuclear Power Corporation of India Ltd) indemnify Indian private suppliers through contractual agreements. The problem started at Kovvada; after the civil liability legislation was passed, domestic suppliers refused to supply components. So NPCIL, through contractual agreements, waived liability using a rationale that if there is a failure in components made to their specifications, it is NPCIL's fault, a logic that is suspect and never tested in court. Raghu is right: the U.S. is driving this pressure, partly for political and economic reasons. If we want foreign participation, we have to amend the law. Regarding supply-side capacity, whether we have it now is suspect. But this investment in India is over a long horizon. Western nuclear suppliers are responsive to market signals and will build up capacity if demand presents itself. One of the reservations with private companies' participation has been about technology transfer, particularly as this is considered a strategic space with attendant security risks. Even if India were to amend the AEA, would the level of technology transfer that took place under agreements in the past between Russia and India take place in future? Particularly in the case of the Small Modular Reactors (SMRs) that appear to be gaining ground as a safer alternative to large nuclear reactors? Ashley Tellis: This is a commercial question. If your suppliers are private entities, their technology transfer decisions will be based on profitability. Governments don't have powers to force a private entity to transfer technology. The U.S. will have a role through its licensing process for what technology transfer is permitted. For example, the U.S. permitted Westinghouse to transfer certain reactor design technologies to China, a decision Westinghouse probably rues because the AP1000 technology was cloned by the Chinese. My expectation is that India will seek technology transfer and will probably get some, consistent with company profitability and what the U.S. government will want to protect for national security or proliferation reasons. Even Rosatom has not done a complete transfer of VVER-1000 technology to India; they have allowed India to build sub-components but maintain proprietary control over many elements, especially in the hot section, related to advanced materials and chemistry. This will not be a showstopper. Newer companies involved in SMRs are actually more enthusiastic about technology transfer than old majors because it is an economic decision to access the market, get economies of scale, and increase profit. This will not be a serious problem. The bigger problems are high capital costs and how much money will India be able to invest. D. Raghunandan: A lot of this debate is based on hypotheticals and we cannot frame policies based on those. For 15 years, India has been chasing technology transfer and investment in defence, increasing FDI from 25% to 100%, yet no major foreign company invested or transferred technology because it's not in their interest. So I am not convinced that new futuristic technologies such as SMRs, which India does not possess, will transform the nuclear energy landscape if they come to India. The argument often comes down to making smaller 200 MW or even 60-70 MW reactors instead of 500 MW ones. In its last Budget, India earmarked money for five small reactors based on the pressurised heavy water cycle that it is familiar with. The question is attracting investment to scale this up. Dr. Tellis, considering India is a developing country with other commitments, for these newer SMR suppliers, would it not be fair to seek compensation [if things go wrong] because it's an untested technology? Ashley Tellis: No, I don't think so. The Convention on Supplementary Compensation (CSC) is an international effort to create an environment conducive for expanding nuclear power production and understanding its inherent risks. The CSC's purpose in a nuclear accident is not to litigate who is responsible, but to rush compensation to those affected. It has three key principles: first, all liability is channeled to the operator. Second, a pre-accident fund is created (the Convention has a three-tiered fund). Third, supplier liability is permitted if it's through contract or if there are issues of wilful misconduct; there isn't an overarching principle of supplier liability because of the fear of litigation delays. This model assumes an environment with adequate design review and a neutral regulatory authority not linked to the operator or supplier. If a real nuclear accident occurs, the sovereign on whose territory it occurs is the ultimate guarantor of protection. The question was how to create a regime allowing them to pick from a readily available pool of money, hence the insurance pool systems. Regarding SMRs, the problem is not design immaturity. Many SMRs have very advanced passive designs. The real problem SMRs will face is economic: capital costs are still extremely high. We don't know if the SMR cost will be disproportionately smaller. A big assumption with SMRs is that they will be manufactured through an assembly line process in a factory and components transported and assembled on site. I have greater faith in the SMR technology than in the assembly line model of manufacturing just yet. Listen to the conversation in The Hindu Parley podcast
Hindustan Times
29-05-2025
- Business
- Hindustan Times
A new legal architecture for nuclear power sector
Prime Minister (PM) Narendra Modi's new emphasis on nuclear power is in line with renewed global interest in this clean and stable source of electricity, which also supports India's quest for energy sovereignty, independence and security. According to the International Energy Agency (IEA), demand for electricity is growing at twice the rate of other forms of energy — and six times faster in the developing world — due to urbanisation, prosperity, transportation, air conditioning and the exponential growth in demand from data centres. Globally, nuclear power contributes to 9% of power generated, second behind hydropower as a source of non-fossil fuel. According to IEA, 63 reactors with a capacity of 70 GW are under construction — 25 are of Chinese design and 23 of Russian design. After decades of standstill, countries like France and the US are resuming capacity addition. There is new excitement on the prospects of Small Modular Reactors (SMRs). SMRs have many advantages — shorter construction time, lower risk of cost and time overruns, better grid stability, manageable project costs, a payback period of 10-15 years, which is half that of large nuclear reactors, and amenability to project financing and refinancing. The US and China lead SMR development, with technology expected to mature by early 2030s. India is an early starter with high competence in all aspects of nuclear energy. However, growth, driven by indigenised technology and public monopoly, is sluggish. Nuclear power accounts for only 3% of electricity generated in India. The target set in 2007 for 63,000 MWe by 2032 has been replaced by the target of 100,000 MWe by 2047. That goal is unattainable in the current institutional and regulatory environment. The NSG exemption in 2008 and bilateral agreements opened access to international uranium sources, but progress on international nuclear technology and reactors to supplement domestic ones have been hampered by regulatory issues, especially the Civil Liability for Nuclear Damage Act (CLNDA) 2010, which has also led domestic suppliers to seek indemnities from the operator, NPCIL. The government's intention to amend the Atomic Energy Act 1962 (AEA) and the CLNDA are timely and welcome. Comprehensive and unambiguous legislative changes can open up additional sources of investment in a highly capital-intensive sector, create a broader pool of developers and operators and accelerate industrialisation. Foreign participation can go beyond equipment supplies. The distributed market structure and wider industrial base associated with SMRs, in particular, require legal and regulatory changes. India's nuclear liability regime diverges significantly from international norms, particularly the Convention on Supplementary Compensation for Nuclear Damage (CSC). The CLNDA, a well-meaning law intended to protect victims, has ended up discouraging supplier engagement. Neither the CLNDA rules, whose provisions on capping liability could be struck down as excessive delegation, nor the clarifications and assurances offered by the government through FAQs, which are not legally binding, have assured foreign or domestic suppliers. A comprehensive amendment, rather than piecemeal fixes, is required. The amendment could either delete Section 17(b) to remove fault-based supplier liability, in line with CSC, or incorporate the relevant provisions of the CLND rules and FAQs to provide statutory caps on liability and claims periods. In addition, Section 46 would have to be amended to clearly bar all civil liability claims outside the CLNDA framework, while preserving the application of criminal liability. Amendments to Sections 5 and 9 would clarify that claims may only be made in accordance with CLNDA. The clarification in FAQ that the primary reactor vendor or technology provider would be deemed to be the supplier needs to be incorporated. Complex decisions will be required to determine activities to be opened to the private sector in nuclear power as well as the level of private ownership and foreign shareholding, if any. The simplest proposition is for NPCIL or a government company to build, operate and control plants funded by the private sector; or, outsource the construction of reactors and power plants to the private sector, with status quo in every other aspect. However, the latter should be permitted to invest in, own and operate nuclear power plants, including reactors and power plants, under a strict licensing regime that addresses national security, proliferation and safety concerns, oversight needs and international obligations. Indian companies could be allowed full ownership and foreign ones up to 49%. For both large and SMR reactors, we would need standardisation, industrialisation and economies of scale. At the initial stages at least, the government will have to retain full control of the complete nuclear fuel cycle. Globally, too, there are few actors involved in this process. There would, thus, be a separation between ownership and management of nuclear power plants, on the one hand, and of the fuel cycle on the other. Nuclear power generators would be treated on par with other power companies with administrative supervision by the ministry of power, while control of the nuclear fuel cycle would rest with the department of atomic energy. This framework would entail amending Section 3 of the AEA to redefine atomic energy activities as universally licensable, allowing private companies to participate under central government oversight; amending Section 14 to allow up to 100% private ownership, including by companies with foreign investment, subject to security clearance; reforming Section 20 to permit intellectual property ownership for civilian nuclear research and development. Indian and other startups developing SMRs, for instance, should be allowed to retain and commercialise their technology; and, reforming Section 22 to place the regulation of electricity tariffs and trading under the Electricity Regulatory Commissions governed by the Electricity Act, 2003. Further, permitting foreign investment would require amendments to FEMA and FDI policy and rules. Private sector entry and large-scale deployment of SMRs would need a more independent and empowered AERB. Assured availability of human resources, finance, and fuel will be essential for growth. India's private sector and startup community can meet the stringent requirements of the nuclear power sector through research, innovation, advanced engineering, investments and responsible and safe project management. Comprehensive and clear reforms will unlock foreign capital and participation. Nuclear power will have to be an integral component of an energy strategy needed to achieve the goal of Viksit Bharat while ensuring clean energy transition and energy access and equity for all. Akshay Jaitly is a founding partner of Trilegal and Jawed Ashraf is a retired Indian ambassador. The views expressed are personal. Get 360° coverage—from daily headlines to 100 year archives.
News18
02-05-2025
- Business
- News18
Modi Bets On Nuclear: Why India Is At The Cusp Of A Power Revolution
Last Updated: There is a clear and determined effort by Prime Minister Narendra Modi's government to make nuclear power a central pillar of India's sustainable and secure energy future India is navigating a complex energy landscape, driven by the twin demands of fuelling rapid economic expansion and meeting ambitious climate goals. In response, the Narendra Modi government is making a significant strategic pivot, doubling down on nuclear power with a clear and bold target: boosting capacity from just under 9 GW today to an impressive 100 GW by 2047. The goal is for this capacity addition to enable India to achieve the net-zero emissions target by 2070, apart from guaranteeing long-term energy independence. For years, a key bottleneck hindering faster nuclear growth, particularly involving international partners, has been India's distinct liability framework. The Civil Liability for Nuclear Damage Act (CLNDA) of 2010, specifically its provision allowing legal claims against equipment suppliers in the event of an incident, created significant hesitation among global nuclear vendors. This perceived risk, diverging from international norms that typically channel liability solely to the plant operator, effectively stalled major collaborations envisioned under pacts like the US-India Civil Nuclear Agreement, even though they were hailed as landmark breakthroughs. Recognising this impediment, a crucial shift is now in the works. The Union government is actively considering amendments aimed at capping supplier liability, potentially bringing India's legal regime more in line with global standards. This move, possibly slated for discussion in Parliament's upcoming monsoon session, is widely seen as essential groundwork to unlock the foreign investment and technology needed for the massive planned scale-up. It signals a pragmatic approach designed to make India a more attractive destination for leading nuclear firms. Beyond legal reforms, a broader opening of the sector seems imminent. There is talk of permitting foreign companies to take equity stakes, potentially up to 49 per cent, in domestic nuclear power projects. Major international players like Westinghouse, GE-Hitachi, France's EDF, and Russia's Rosatom are the kind of partners India hopes to attract more substantially. Concurrently, a significant development is the reported interest from India's own corporate heavyweights. Giants such as Reliance Industries, Tata Power, Adani Group, and Vedanta are exploring potential investments totalling billions, suggesting a new phase where private domestic capital could play a major role alongside state-owned enterprises and foreign partners. This push is underpinned by a multi-pronged strategic blueprint being championed by the Ministry of Power. Key elements involve not just tweaking the CLNDA but also potentially amending the overarching Atomic Energy Act. This will formally enable broader private and state-sector participation beyond the traditional domain of central public sector undertakings. Understanding the need for public buy-in, efforts are also being planned to enhance awareness campaigns, focusing on the safety and environmental benefits of modern nuclear power. After all, the last thing India wants is for its nuclear ambitions to be stymied by uninformed activists or vested interest groups. Spreading awareness about the benefits of nuclear power among the larger population, therefore, is essential. On the practical side, the strategy includes clever infrastructure planning, such as exploring the repurposing of land at retired thermal power stations for new nuclear units, which could significantly cut down on land acquisition hurdles, costs and timelines. Streamlining the often complex and lengthy regulatory approval processes is another critical focus area. To make nuclear power economically competitive, financial incentives like tax concessions and favourable long-term financing options are being considered. Technologically, the approach encourages diversification. While foreign technology and investors are welcome, there is also a strong emphasis on promoting indigenous manufacturing through the 'Make in India' initiative and fostering competitive bidding processes. Securing a reliable and diverse supply of uranium fuel, alongside expanding the domestic vendor base for specialised components, is also vital for ensuring the long-term sustainability and security of the refurbished nuclear programme. Looking towards next-generation technology, India is now focussing on Small Modular Reactors (SMRs). SMRs represent an emerging technology advanced nuclear reactors with a capacity of up to 300 MW(e) per unit, approximately one-third of traditional reactors. Capable of producing substantial low-carbon electricity, they are characterised by their small physical size, modular design for factory assembly and transport, and the use of nuclear fission to generate heat for energy production. SMRs are localised, cost effective and bypass the risk of devastating accidents as they are meant to provide power in scenarios where extensively large facilities are unnecessary or locations lack the infrastructure to accommodate sizable units Due to their compact size, simplicity, and advanced technology, small modular reactors (SMRs) offer enhanced safety and reduced fuel demands. SMR-based power plants may need less frequent refuelling, occurring every three to seven years, in contrast to the one to two years typical for conventional plants. Certain SMRs are designed to operate for extended periods, even up to 30 years, without requiring refuelling. NTPC, the country's largest power generator, is already reported to be in discussions with potential SMR developers from the US, Russia, and elsewhere, signaling serious intent in this emerging field. India's deep engagement in international collaborations, exemplified by its significant contributions to the ITER nuclear fusion research project (supplying critical components like the cryostat), further highlights its long-term commitment to staying at the forefront of nuclear science and technology. top videos View all Undoubtedly, challenges persist. Managing public perception around safety, developing robust long-term solutions for nuclear waste management, and ensuring these complex, large-scale projects are executed on time and within budget are all significant hurdles. However, the comprehensive nature of the current push—blending legislative reform, attracting diverse investment, fostering domestic capability, embracing new technologies, and building strategic international partnerships—signals a clear and determined effort by Prime Minister Modi's government to make nuclear power a central pillar of India's sustainable and secure energy future. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18's views. First Published:
