With the US Congress ratifying the 123 Agreement on Indo-US civilian nuclear co-operation on Wednesday, the UPA government is modifying its integrated energy policy (IEP) to factor in the changes in India?s nuclear status. Drafted two years ago and cleared by Prime Minister Manmohan Singh on the eve of his recent visit to New York and France, the IEP will now be amended to specify the country?s need to acquire uranium assets overseas as well as create buffer stocks of the fissile element.
The IEP, which envisions acquiring oil and gas assets abroad to reduce the country?s dependence on imports, will also include uranium assets. ?We will certainly mention acquiring uranium assets abroad, like all other energy assets,? said Kirit Parikh, member (energy) in the Planning Commission. At the full plan panel meeting on September 20, where the Singh cleared the IEP, Atomic Energy Commission chairman Anil Kakodkar also suggested exploring the possibility of acquiring uranium assets overseas.
The draft IEP had suggested a three-stage process, which includes extensive use of uranium, tapping India?s vast thorium resources and becoming energy independent beyond 2050. With limited domestic uranium deposits, the IEP suggested imports to ensure 10,000 mw of power generation in Phase-I of the nuclear energy programme, should NSG restrictions be lifted.
The IEP will also call for creating buffer stocks of uranium, just like other imported energy sources. ?Like we say that India should worry about having a buffer stock of oil, we need to add the need to create a buffer stock of uranium,? Parikh said.
The Centre is also considering opening up the nuclear energy sector to private players. ?We should really open it up for private sector participation. The exact mechanism has to be worked out. But unless we have private sector participation, the full benefits of the nuclear deal will not accrue to us,? Parikh said.
?We permit 100% FDI in the power sector. So, maybe we can do it in nuclear power, too. I think we will relax the conditions that restrict nuclear energy projects to the public sector,? Parikh said, indicating that the prospect of India allowing 100% FDI in the nuclear energy sector cannot be ruled out.
The modalities for allowing private players to enter the business still need to be thrashed out, but there are some clear options. ?Private sector nuclear plants can be set up if we use tariff-based bidding procedures or the public-private participation route. Nuclear Power Corporation of India could also own the plant, but contract private players to set them up on a build-operate-transfer basis. These things are conceivable and can be worked out,? he said.
?The nuclear deal opens up different possibilities. But in the foreseeable future, the contribution that nuclear energy will make depends on how much we are able to import. In any case, it will be of modest proportions compared to our total needs,? Parikh pointed out.
Parikh, who is in charge of giving final touches to the IEP, said apart from changes to include nuclear energy in India?s energy basket, a few minor modifications are needed to stress the ?emphasis and nuances? of the policy. The final version of the policy is expected to be placed before the Cabinet by the end of October.
The US Congress stamp of approval to the controversial Indo-US nuclear deal came on Wednesday after the Senate overwhelmingly approved the 123 Agreement with bipartisan support, rejecting killer amendments moved by two Democratic senators and paving the way for the implementation of the historic initiative between the two countries.
The Bill, which has already been cleared by the House of Representatives, will now head to the White House, with President Bush signing it into law. The Indo-US agreement on nuclear commerce will then be ready for initialling by external affairs minister Pranab Mukherjee and US secretary of state Condoleezza Rice when she arrives in New Delhi on her rescheduled trip on Saturday.