By Vikram V
Explainer: Nuclear Power
The Union Budget has listed nuclear power among nine priority sectors. The focus is now on small modular reactor projects which can be executed faster, explains Vikram V
l Current status of nuclear power generation
India’s nuclear power generation capacity currently is 8180 MW against 6780 MW as on March 31, 2023. There was a capacity addition of 1400 MW in FY24. The generation from the nuclear power stations stood at 48 billion units, which constituted 2.8% of the all-India electricity generation. India’s nuclear power capacity is entirely under the Nuclear Power Corporation of India Ltd (NPCIL) owned by the government. These projects are spread across Tamil Nadu, Maharashtra, Gujarat, Rajasthan, Karnataka and Uttar Pradesh. The under-construction nuclear power capacity stands at 6,800 MW. This apart, there is 7000 MW capacity under various stages of development, including a mix of brownfield expansion and greenfield projects. The CEA under the National Electricity Plan (NEP) envisages the nuclear power capacity to be increased to 19,680 MW by FY32.
l Reasons for the slow pace
The gestation period for a nuclear power project remains long, with projects taking 7-10 years, or even longer in some cases, to get completed. This is due to the complexity involved in these projects and the safety measures required to be built-in. Thus, the progress in capacity addition has been slow. Nonetheless, India is expected to witness a sizable increase in nuclear power capacity over the next seven years.
l Capital cost projections
The capital cost for upcoming nuclear power projects remains relatively high, with per MW cost in the range of `15-20 crore. In fact, there are a few projects with a per MW cost of `35 crore. This necessitates significant capital investment and also leads to the relatively high cost of power generation from these projects. Nonetheless, given the long life of the assets with some of existing projects running for more than 40 years, the tariff competitiveness of these new projects is expected to improve over the operating period.
The CEA projects the nuclear power capacity to reach 19,680 MW by FY32 and nuclear power to contribute to over 4% of all-India electricity generation by FY32 against the current 3% contribution.
l The context of the renewed emphasis
THE Union Budget 2024 highlights the importance of nuclear energy for the country over the long term and outlines measures to support R&D in development of small modular reactors (SMR) and other newer technologies. The SMRs can play an important role in contributing to clean energy generation and in managing the intermittency associated with renewables, by acting as a back-up source. Moreover, these projects are expected to be executed faster unlike the long gestation period seen for large nuclear power projects.
Given that generation from nuclear fuel is clean without any adverse emissions during the electricity generation process, this would contribute towards meeting India’s climate change goals.
l Policy steps needed to make this viable
The Atomic Energy Act, 1962, was amended in 2016 to allow joint ventures (JVs) by NPCIL with other central public sector units to accelerate the development of new projects. However, there has been limited progress in these JVs so far. The government should encourage the JVs to speed up the project work as well as consider allowing private sector participation, especially in the SMR nuclear segment. Also, policy measures are required to enable technology transfer from developed economies for SMR projects, use of green financing for nuclear projects and addressing the concerns on nuclear liability.
l Concerns about raw material availability
The fuel used in the Indian nuclear power plants is either natural uranium or enriched uranium. The fuel sourcing for nuclear power projects of NPCIL is arranged by the Department of Atomic Energy (DAE) through domestic sources as well as agreements signed with the Nuclear Suppliers Group comprising 48 countries that follow a set of guidelines which seeks to contribute to the non-proliferation of nuclear weapons.
l Perceived risk profile
The safety measures adopted by nuclear power plants have been enhanced following the Fukushima Daiichi disaster in Japan 2011. These additional safety standards have resulted in cost as well as time overrun for the ongoing nuclear power projects in India.
The safety measures of the nuclear reactors are reviewed by the World Association of Nuclear Operators (WANO).
The writer is vice president & co-group head – Corporate Ratings, Icra.
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