India is pursuing a new strategy to significantly boost its nuclear power generation capacity by inviting major private companies to invest up to $26 billion in the nuclear energy sector, according to Reuters. “This marks the first time the government is seeking private investment in nuclear power, a non-carbon emitting source that currently contributes less than 2% of India’s total electricity generation. The funding will help India achieve its target of having 50% of installed electric generation capacity come from non-fossil fuel sources by 2030, up from the current 42%.”
The government is in talks with at least five major private firms including Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd to invest over $5 billion each.
Under the proposed hybrid model, the private companies will be required to make investments in nuclear plants, land acquisition, water resources, and construction outside the reactor complex. However, the rights to build, operate the plants, and manage fuel will remain with the state-run Nuclear Power Corporation of India Ltd (NPCIL) as mandated by Indian law. NPCIL is a unite of India’s Department of Atomic Energy and reports directly to the Prime Minister’s Office. The private firms are expected to earn revenue from electricity sales, while NPCIL will operate the projects for a fee.
Author’s note: Back in 2009, shortly after President George W Bush and Indian Prime Minister Dr. Manmohan Singh signed the “123” Agreement that re-opened nuclear energy trade with India, I was part of three nuclear energy trade missions to India. The fuel shortage problem had been solved due to the Agreement. And NPCIL executives talked about a plan where they would encouraged Indian Public Sector Units (PSUs – companies owned by the Indian federal government) to invest in expanding nuclear energy capacity.
This included the National Thermal Power Corporation (NTPC), Indian Oil Corporation, Bharat Heavy Electricals Ltd etc. The “nuclear island” would still be built and operated by NPCIL. While heat is provided by the nuclear reactor the rest of the plants consists of boiler, turbines/generators, transmission lines and other “conventional” equipment which could readily be operated by these PSUs. The idea was that NPCIL would invest its limited capital on the nuclear islands and leverage excess funds from PSU to accelerate growth. Indeed, in 2023 NPCIL and NTPC did sign a JV agreement to develop two heavy water plants
In the possible hopes that the government might also permit private investment from Indian companies, the erstwhile Reliance Energy had hired a recently retired CEO of NPCIL but to no benefit at the time. This week’s announcement revives the hopes from 14 years ago but with an emphasis on some of the largest conglomerates in India’s private sector. The Modi government is pushing this in part because of its serious commitment to reduce CO2 emissions and in part to support India’s private sector.
The plan aims to add 11,000 megawatts of new nuclear power capacity by 2040, supplementing NPCIL’s existing 7,500 MW fleet and committed 1,300 MW investments. It does not require amending India’s Atomic Energy Act but needs final approval from the Department of Atomic Energy.
This public-private partnership model will likely accelerate nuclear capacity addition in India. Attracting private investment is seen as a solution to overcome constraints such as stringent compensation laws that have hampered deals with foreign nuclear plant builders such as General Electric and Westinghouse.
