'SHANTI' Act Alone May Not Fully Protect Nuclear Plants Against Liabilities

(MENAFN- The Arabian Post)

By Nantoo Banerjee

It is difficult to explain why the government took nearly 17 years to decide on launching a bill in Parliament to allow private participation in India's nuclear power generation programme. The proposed Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill to amend the civil liability law to shield plant operators and cap nuclear equipment suppliers' liability along with redesigning operator insurance to Rs. 1,500 crore per incident under Indian Nuclear Insurance Pool finally comes several years after the landmark 2008 Indo-US Civil Nuclear Deal.

The bill proposes up to 49 percent foreign direct investment (FDI) and creation of a unified legal framework for atomic energy, including a specialized nuclear tribunal. The government must explain the reason for the delay in promulgating such an act to facilitate private entry in the country's slow-growth nuclear energy programme. In the last 17 years, numerous nuclear power reactors have been connected to the grid globally. China recorded the fastest rate of nuclear power growth since 2008.

The existing Atomic Energy Act bars private enterprises and state governments from operating nuclear power plants. The central public sector Nuclear Power Corporation of India is the country's sole generator of atomic power. It runs 24 commercial reactors. Over the last two decades, several units have been connected. They include Kaiga 4, Rajasthan 5 & 6, Kudankulam 1 & 2, and Kakrapar 3 & 4. The contribution of nuclear power to the country's overall electricity generation is only around 3 percent. According to an official statement, the present installed capacity of nuclear power is 8.78 GW (excluding RAPS-1, 100 MW). Now, indigenous PHWR technology has matured for larger size reactors of 700 MW.

With the deployment of indigenous 700 MW reactors and 1000 MW reactors with international cooperation, the present capacity will increase to 22.38 GW (excluding RAPS-1, 100 MW) by 2031-32 on progressive completion of ongoing projects. Further, the Government has also announced the Nuclear Energy Mission to reach 100 GW by 2047. Under the existing policy, FDI in atomic energy is prohibited. China leads the world in new reactor commissioning, with numerous units brought online since 2008, including at sites like Hongyanhe, Ningde, Fuqing, Tianwan, Yangjiang, Sanmen, Haiyang, Taishan, and Fangchenggang. India wasted nearly two decades to create a right legal framework to strongly expand its nuclear power generation.

During Dr. Manmohan Singh's premiership, the Indo-US Civil Nuclear Deal seemingly ended India's nuclear isolation and allowed the country to access civilian nuclear technology and fuel. The agreement, finalized after complex negotiations with the US, enabled India to pursue its energy demands through international cooperation while maintaining its strategic nuclear deterrent. It was seen as a crowning achievement of his time in office. The deal involved a complex separation plan for India's nuclear facilities, where civilian power plants were brought under IAEA (International Atomic Energy Agency) safeguards, while the country's nuclear weapons programme remained outside of these safeguards. The deal ended decades of international isolation and sanctions against India's nuclear programme. It fundamentally changed India's relationship with the US, opening avenues for strategic cooperation in areas beyond nuclear energy, including defence and high-technology trade.

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However, the Indo-US Civil Nuclear Deal failed to deliver on its commercial promises largely due to significant legal, economic, and regulatory barriers. While the deal succeeded in ending India's nuclear isolation and transforming the strategic partnership between the two nations, no US-built nuclear power plants have been constructed in India to date. Although the agreement led to India being recognized as a responsible nuclear weapon state and facilitated its engagement with international non-proliferation regimes, it failed to deliver the desired objectives for several reasons, including conflicts over India's nuclear liability law which deterred foreign suppliers and bankruptcy of Westinghouse, a key partner. India's Civil Liability for Nuclear Damage Act, 2010, acted as the most significant barrier, as it makes equipment suppliers, in addition to the operator, liable for damages in the event of a nuclear accident. It diverged from the international norm, where liability rests solely with the operator. Foreign firms, including General Electric and Westinghouse, were unwilling to invest in India with the risk of potentially unlimited financial liability.

In the process, India remained a laggard in pollution-free nuclear power generation while major atomic power producing countries went on rapidly increasing their nuclear energy capacities. The global nuclear power generation is projected to hit a record high in 2025, driven by China, Japan's restarts, and France's maintenance recovery, adding to the clean energy mix alongside renewables and gas, as countries seek low-carbon energy solutions. The World Nuclear Association noted that generation reached a new peak in 2024, with expectations for continued growth into 2025 and 2026. Nuclear power is seen as a crucial, reliable, 24/7 partner to renewables for decarbonization, powering low-carbon transitions. Global investment in atomic power has grown substantially, with new reactors coming online, contributing to a global fleet of nearly 420 reactors. Nuclear provides nearly 16 percent of global electricity, second only to hydropower for low-emission energy. This growth supports rising electricity demand from electric vehicles and heat pumps.

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The top ten nuclear power-producing countries by generation in 2025 are: the US, China, France, Russia, South Korea, Japan, Canada, Ukraine, the United Kingdom, and Spain. Five of them – the US, France, China, Russia and South Korea - account for more than two-thirds of the world's total nuclear electricity generation capacity. Globally, 416 nuclear power reactors are operating in 31 countries, with a total installed capacity of 376 gigawatts (GW). The US leads in both total capacity and generation, followed by China and France, according to recent World Population Review and the US Energy Information Administration (EIA) data. This month, the US government plans to buy and own as many as 10 new, large nuclear reactors that could be paid for using Japan's $550 billion funding pledge, part of a push to meet surging demand for electricity.

Hopefully, SHANTI will help India peacefully raise its nuclear power capacity substantially in the coming years. As of 2024, India generated approximately 49.9 TWh of nuclear electricity. Currently, it operates 23 reactors across 7 nuclear power plants. India plans to increase its nuclear capacity by 70 percent by 2030 with the addition of 7 new reactors. The country has ambitious plans to become a major nuclear power generator by 2040 and beyond, aiming for 100 GW capacity by 2047, driven by energy security, climate goals (net-zero by 2070), and reducing fossil fuel reliance, with significant investment, indigenous tech focus, and public-private partnerships paving the way, despite past performance challenges. However, to execute the ambitious plan the union government and private nuclear power plant promoters will require full cooperation of states. Land is primarily a state subject in India and so is the law and order issue. Promoters of new private sector nuclear power plants will require full support and assistance of state governments to set up and operate their units without any trouble. (IPA Service)

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