Nuclear energy holds a key position in India’s clean energy ambitions and base power requirements, but several regulatory changes are needed to ensure the sector’s growth and private investment in the industry, said S N Subrahmanyan, Chairman and Managing Director of Larsen & Toubro (L&T) Limited, in an exclusive interaction with Moneycontrol.
Subrahmanyan pointed to provisions of the Civil Liability for Nuclear Damage (CLND) act as a major hurdle for the private sector's participation in the nuclear energy sector.
“Right now, the key point in nuclear is the CLND clause… there is a severe liability for an unforeseen incident. But if that clause is amended, I think it will become more easier for private capital to get into that area,” he said.
The L&T chairman added that private participation across the value chain, from mining to refining and processing, could make the sector more sustainable.
India's 2010 CLND act imposes strict operator liability and even allows recourse against suppliers, a provision that has deterred private and foreign players. The operator’s liability is capped at Rs 1,500 crore. The law also allows operator to seek compensation from suppliers of services and equipment if any nuclear incident is caused by their fault or negligence.
However, the government is now planning to dismantle these barriers. Amendments to both the CLND Act and Atomic Energy Act are in progress, aiming to enable private sector entry and clarify long-standing liability concerns. These amendments may cap supplier liability to the contract value.
India plans to increase nuclear capacity more than tenfold by 2047, targeting 100 GW, Prime Minister Narendra Modi said in his Independence Day speech.
While L&T does not plan to operate nuclear power plants, it possesses the rare capability to deliver them end-to-end, Subrahmanyan said.
“We may not get into nuclear power (production) per se, but we have the capabilities to do an entire nuclear power plant… to make a calandria, an end shield, a steam generator, steam turbines, and civil works,” he said, citing L&T’s role in building the Tarapur nuclear power plant, near Mumbai, on a turnkey basis. The Tarapur plant, India's first commercial nuclear power plant, started operations in 1969. L&T was part of a consortium that built two new reactor units at the power plant in the 2000s.
Currently, Nuclear Power Corporation of India Ltd (NPCIL) is the only company constructing nuclear power plants. It has recently tied up with NTPC Limited for a project in Rajasthan.
The L&T chief said if the law is amended to allow private sector investments, “you could have lot more nuclear power plants coming up, depending on the policy and framework.”
He also pointed to the possibility of smaller “Bharat reactors” of 220 MW or less, although he added that their rollout would depend on regulatory clarity.
Subrahmanyan said that nuclear can play a major role in India’s base power requirements.
“This is 24 by 7 power, unlike solar, which lasts as long as the sunlight lasts and there is no pollution from this. That is a good way to go about developing the base power of the country”
India currently operates about 25 nuclear reactors with a capacity of close to 9 GW.
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