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Nuclear Power and Private Sector
Context:
After years of state monopoly in the nuclear power sector, India is set to welcome private investment with the launch of Bharat Small Reactors (BSRs).
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- These small-sized nuclear reactors, with a capacity of up to 220 megawatts (MW), mark a significant shift in India’s energy landscape.
- The state-owned Nuclear Power Corporation of India Limited (NPCIL) issued a public notice inviting private sector participation in developing BSRs.
- This initiative follows the announcement in the Union Budget 2024-25 which emphasised the role of private capital in expanding nuclear power capacity.
Key Features of the Bharat Small Reactors Initiative
The Request for Proposal (RFP) issued by NPCIL outlines the business model for private participation:
- Private Financing: Selected companies will fund the entire project.
- Captive and Commercial Use: Companies can utilise electricity generated for self-use, sell it to third parties, or trade it on the open market.
- Construction and Oversight: While the private entity will construct the reactor, it will do so under the supervision of NPCIL. Once completed, the asset will be transferred to NPCIL for operation.
- Vendor Selection: Private companies must choose vendors from an NPCIL-approved list.
Opportunities and Challenges
- The initiative aligns with India’s goal of increasing the share of non-fossil fuels in its energy mix.
- The country’s current nuclear power generation capacity, entirely developed by government entities, stands at 7.4 gigawatts (GW).
- By involving private players, India aims to expedite the development of nuclear energy infrastructure.
- However, industry experts have expressed concerns about the stringent conditions in the RFP.
- The requirement for NPCIL oversight and post-construction transfer of assets could deter private players.
- A power-sector executive noted that while private investment in nuclear power was long overdue, these caveats might limit enthusiasm.
Private Sector Response
- Tata Power: In September, Tata Power signed a memorandum of understanding with the Government of Rajasthan to invest ₹1.2 trillion over 10 years.
- The plan includes a nuclear power plant, 10 GW of renewable energy capacity, 2 GW of solar module manufacturing, and investments in transmission and distribution.
- Larsen & Toubro (L&T): L&T executives highlighted the company’s extensive experience in the nuclear sector through collaborations with NPCIL.
- The company’s Heavy Engineering division is pre-qualified to supply components for small modular reactors.
Advantages of Bharat Small Reactors
- Modularity and Scalability: BSRs can be constructed in a modular fashion, allowing for easier deployment and scalability according to demand.
- Cost-Effectiveness: Utilising domestic technology for BSRs is anticipated to significantly lower costs compared to foreign models, making them financially attractive.
- Reduced Exclusion Zones: The required exclusion zone for BSRs is smaller than that for traditional reactors, facilitating their installation in more diverse locations.
Sector Outlook
- The RFP represents a significant step towards involving the private sector in nuclear energy development.
- However, the reaction of private companies will depend on the practicality of the conditions imposed and the long-term benefits of their participation.
- The initiative has the potential to transform India’s nuclear power industry and enhance its energy security while contributing to the nation’s broader climate goals.
