India is paving the way for a revolution in its nuclear power sector, seeking to attract private investments worth approximately US$26 billion. This initiative marks the first time that New Delhi has sought private capital to boost its production of nuclear power, a non-carbon dioxide emitting energy source that currently accounts for less than 2% of the country’s total electricity generation.
According to government sources, this move is crucial to achieving the country’s target of 50% of its installed power generation capacity coming from non-fossil sources by 2030, a significant increase from the current 42%.
Nuclear power production: potential investors
The government has already initiated talks with at least five private companies, including Reliance Industries, Tata Power, Adani Power and Vedanta, each to invest approximately 440 billion rupees (7.13 billion Singapore dollars). These discussions, conducted by the Department of Atomic Energy and the Nuclear Power Corporation of India (NPCIL), have taken place in multiple rounds over the past year, the sources, who are directly involved in the matter, revealed.
With these investments, the government expects to build a new nuclear power generation capacity of 11,000 MW by 2040. Currently, NPCIL, which owns and operates India’s current fleet of nuclear power plants with a capacity of 7,500 MW, has already committed investments for another 13,000 MW.
Under the proposed financing plan, private companies will be responsible for making the investments in the nuclear plants, acquiring land, water and carrying out construction in areas outside the reactor complex of the plants. However, the rights to build and operate the stations and their fuel management will remain with NPCIL under current legislation.
The private companies are expected to generate revenue through electricity sales from the plant, while NPCIL would operate the projects for a fee. This hybrid model of nuclear power project development represents an innovative solution to accelerate nuclear capacity, according to Charudatta Palekar, an independent energy sector consultant.
This plan will not require any amendments to the Indian Atomic Energy Act of 1962, but will need final approval from the Department of Atomic Energy. Indian law prohibits private companies from establishing nuclear power plants, but allows them to supply components, equipment and sign construction contracts for work outside the reactors.
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