Nuclear Power Corporation of India Ltd (NPCIL), an enterprise of the Indian government under the Ministry of Atomic Energy, has invited request for proposals (RFPs) from private players to set up Bharat Small Reactors (BSRs), making it the first formal move by the Union government to decentralise the country's nuclear power sector.
"NPCIL has invited Request for Proposals (RFP) from visionary Indian industries for setting up 220 MW Bharat Small Reactors (BSR) for captive use. BSRs are 220 MW Pressurised Heavy Water Reactors (PHWR) with an impeccable safety and excellent performance record, which are compact and tailored for captive use," the PSU said in a statement.
Nuclear power is not renewable energy but it is a zero-emission clean energy source. It generates power through fission, which is the process of splitting uranium atoms to produce energy. The heat released by fission is used to create steam that spins a turbine to generate electricity without the harmful by-products emitted by fossil fuels. The PHWR technology uses natural uranium, heavy water coolant, and a horizontal cylindrical vessel called a calandria to produce nuclear energy.
India is chasing nuclear energy as a source of power because it cannot reduce its emission intensity solely through renewable energy like solar, wind and hydro. Even if it does achieve its Nationally Determined Contribution (NDC) target only through renewable energy, the cost of power then would be very expensive.
The NPCIL stated that in line with the announcement in the 2024-25 Union budget, BSRs are planned to be set up with private capital, within the existing legal framework and approved business models.
The 2024 Union Budget, in a first, included plans to partner with the private sector to build Bharat Small Reactors (BSR) and research and develop Bharat Small Modular Reactors (BSMR). The Department of Atomic Energy has been allocated Rs 24,969 crore in this year’s budget for the same.
India’s nuclear sector is regulated. It is governed by the Atomic Energy Act, 1962, under which only government-owned entities such as NPCIL can generate and supply nuclear energy. There has been no private sector involvement in India’s nuclear power sector so far.
Stringent conditions
As per the conditions outlined by the NPCIL, the private stakeholder will have to find the land and incur the entire capex as well as opex including taxes. After completion of the plant, the asset will have to be transferred to NPCIL for operation.
The power plant will be given the status of captive generating plant and the private entity will have full right on the electricity generated from the plant. The private entity will get to use the electricity generated for its own captive power requirements. Besides, the firm will also be allowed to sell the power to other users.
The NPCIL added that BSRs can provide a sustainable solution for decarbonization of hard to abate industries. It would also help these industries secure economic benefits resulting from savings in carbon emission related taxes thus increasing competitiveness of their products in the global markets.
Companies that have shown interest
Tata Power, one of India’s leading integrated power companies, has already said it will enter the nuclear energy sector after the government revises regulations that will allow public-private partnership in building plants and small reactors.
“At some stage, as and when the Union government comes up with the required regulations and law, Tata Power would also foray into nuclear energy. As of now, it all depends on the policy the government comes up with in this regard, which would also require clarity on the partnership model with Nuclear Power Corporation of India Ltd (NPCIL),” Tata Power CEO Praveer Sinha told Moneycontrol.
State-run NTPC has also announced it will launch an exclusive subsidiary for nuclear power generation. The CPSU has already entered into a joint venture with the Nuclear Power Corporation of India Ltd. (NPCIL) for a 2,800 MW project in Mahi Banswara in Rajasthan at an estimated investment of Rs 45,000-50,000 crore. NTPC CMD Gurdeep Singh had told Moneycontrol that the subsidiary would be a separate entity from the JV with NPCIL. He added that the CPSU is aiming for a nuclear power capacity of 20 GW in over two decades.
According to government officials, companies such as Reliance Industries, L&T, Adani Group are also open to investing as the government is looking at investments worth $26 billion in this sector.
The Union government's move is a step toward India’s plan of increasing its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32 and eventually 100 GW by 2047. As per the latest NDC targets, India has committed to reducing the emission intensity of its GDP by 45 percent by 2030 from the 2005 level and achieving about 50 percent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
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