The Kudankulam Nuclear Power Plant (KNPP) in Kudankulam, India, on Wednesday, March 20, 2024. India, the world’s most-populous nation, has signaled that it will reduce its dependence on the fossil fuel, but growing energy needs complicate the equation. Photographer: Prashanth Vishwanathan/Bloomberg Photo by Prashanth Vishwanathan /Bloomberg
India’s government will amend its nuclear laws to draw private capital and boost the sector’s growth, counting on atomic energy to help the country wean itself off fossil fuels, Finance Minister Nirmala Sitharaman said.
To deploy nuclear power at scale, issues such as technology, fuel, safety, liabilities and costs will need to be addressed, according to Anish De, Global Head of Energy, Natural Resources and Chemicals with KPMG. “Setting a clear north star on the development of nuclear power provides directional clarity on issues,” he said.
With nations at work to reach net zero, nuclear is gaining increasing acceptance across the world as a low-carbon substitute for fossil fuels. Developing 100 gigawatts of nuclear power capacity by 2047 — nearly twelve-fold jump from now — may significantly boost India’s energy transition efforts.
India’s nuclear liability law has stymied the country’s ambitions of building mega power plants with the help of reactors supplied by companies such as GE Hitachi Nuclear Energy, Electricite de France SA and Westinghouse Electric Co. The law is a legacy of one of the world’s industrial disasters — the 1984 Union Carbide chemical plant accident in the central Indian city of Bhopal that killed thousands of people.
India took the world by surprise by conducted its first nuclear test in 1974. While the country said the test was for peaceful purposes, it invited international restrictions to stop proliferation among non-nuclear nations. The exile ended in 2008 thanks to a deal with the US, which gave India access to foreign nuclear technology and fuel for civil use for the first time in three decades. The liability law, meant to ensure justice to victims of any nuclear incident, stalled efforts to build upon that deal.
While GE Hitachi withdrew its nuclear plans in India, sites of EDF and Westinghouse have remained vacant for years, standing testament to the problem.
Sitharaman added that the government will allocate 200 billion rupees ($2.3 billion) for research and development of small and modular reactors or SMRs, a nascent technology that’s been gaining prominence as it’s quick to build and easier to adjust to grid requirements. The nation plans to have at least five locally-made SMRs by 2033.
The announcements have already stirred voices of caution.
“While nuclear energy is a low-carbon source, the environmental and safety concerns undermine its long-term sustainability,” said Shruti Jain, Chief Strategy Officer at Mumbai-based brokerage Arihant Capital Markets Ltd. “Balancing this initiative with investments in renewable energy sources like solar and wind, which are more sustainable, is crucial for India’s environmental goals.”
Source: Financial Post
