• In July 2024, the Government of India, while presenting the Union Budget FY 2024-25, announced plans to expand India’s nuclear energy sector.
• Proposed partnerships with the private sector for the development of Bharat Small Reactors (BSR) and Bharat Small Modular Reactors (BSMR).
• This move is part of India’s broader goal of achieving 500 Gigawatts (GW) of non-fossil fuel-based energy by 2030, pledged at the COP26 Summit.
• Strengthening nuclear energy infrastructure is critical for India’s commitment to decarbonization, ensuring reliable energy supply while reducing reliance on fossil fuels. 

Existing Legal Framework:

• Atomic Energy Act (AEA), 1962:
• Governs nuclear energy in India, amended in 1987.
• Section 3(a) grants the central government sole control over nuclear energy production, development, and disposal.
• Private Sector Limitations:
• The Act restricts private involvement in critical nuclear activities, particularly in research and development (R&D), confining private roles to infrastructure development.
• Supreme Court Verdict (Sept 2024):
• In the case of Sandeep T.S. vs Union of India, the court upheld the AEA provisions, emphasizing stringent safeguards due to the risks of nuclear accidents and misuse. 

Civil Liability for Nuclear Damage Act (CLNDA), 2010:

• Civil Liability Framework:
• The CLNDA provides for no-fault liability of nuclear operators for nuclear incidents and ensures compensation to victims.
• Pending Legal Challenge:
• The constitutionality of the CLNDA is being contested, citing violations of the absolute liability principle and the polluter pays principle.
• The litigation introduces uncertainty, potentially deterring private sector investment.

The absolute liability principle is a legal doctrine that imposes liability on an entity for causing harm, regardless of intent or negligence. This principle holds that if a person or organization engages in hazardous or inherently dangerous activities (such as handling toxic substances, nuclear energy, or chemicals), they are liable for any damage caused, even if all necessary precautions were taken.

• Judicial Precedent:
• In G. Sundarrajan vs Union of India (2013), the Supreme Court referenced nuclear disasters (Chernobyl and Fukushima) and mandated safety inspections for projects like the Kundankulam Nuclear Plant, reflecting the balance between development and safety. 

Role of Private Sector and Public-Private Partnerships (PPP)

• Current Role:
• Historically, private sector involvement has been limited to engineering, procurement, and construction (EPC) for nuclear infrastructure.
• New Prospects:
• The government aims to attract $26 billion in private investment through partnerships, particularly in developing Small Modular Reactors (SMRs).
• Challenges in R&D:
• The AEA currently restricts private involvement in nuclear R&D, a significant barrier to innovation in the nuclear energy sector.
• PPP Model:
• A potential solution could be government-majority ownership (e.g., NPCIL retaining 51% stake), allowing private capital infusion while maintaining state control. 

Regulatory Reforms and the Atomic Energy Regulatory Board (AERB)

• Regulatory Oversight:
• The Atomic Energy Regulatory Board (AERB) oversees nuclear safety. Concerns about its lack of independence persist.
• Proposed Reforms:
• The Nuclear Safety Regulatory Authority Bill, 2011 aimed to enhance AERB’s autonomy but remains unenacted.
• Strengthening AERB’s regulatory role is critical for private investment.
• Future Needs:
• A revamped AERB structure and legal clarity are essential for creating a conducive environment for private sector participation, ensuring safety, and minimizing regulatory risks. 

Liability and Safety Concerns

• High Liability Standards:
• Nuclear infrastructure inherently carries high-risk factors, and liability concerns are a significant deterrent for private sector involvement.
• Past Disasters:
• Historical nuclear accidents, such as Chernobyl (1986) and Fukushima Daiichi (2011), underscore the grave risks of nuclear energy near human settlements.
• CLNDA Concerns:
• Critics argue that the CLNDA does not align with the absolute liability principle, raising concerns about adequate compensation for nuclear incidents.
• Public Safety and Transparency:
• Ensuring regular inspections, transparency under the Right to Information (RTI) Act, and public accountability is essential in minimizing risks and gaining public trust. 

Economic and Environmental Dimensions

• Capital-Intensive Expansion:
• Nuclear energy is highly capital-intensive, requiring significant investment in skilled labor and advanced technology.
• Ambitious Nuclear Capacity Growth:
• India aims to increase its nuclear energy production capacity by 32 GWe, as per the World Nuclear Association (September 2024).
• Decarbonization Commitment:
• Nuclear energy plays a crucial role in meeting India’s net-zero carbon emissions target by 2070, offering a reliable, low-carbon energy source. 

Road ahead

• Balancing Private Participation and Regulation:
• The road ahead requires balancing private sector participation with stringent regulatory oversight, including legislative reforms to the Atomic Energy Act (AEA) and clarity on the Civil Liability for Nuclear Damage Act (CLNDA).
• Public-Private Partnerships (PPP):
• Structuring PPPs to allow private investment while retaining government control could provide a sustainable model for nuclear energy expansion.
• Regulatory Strengthening:
• Strengthening the AERB, improving transparency, and ensuring high safety standards will be crucial for public acceptance and investor confidence.
• Achieving Energy Goals:
• Nuclear energy is vital to India’s decarbonization and energy security goals.
• How the government navigates legal, regulatory, and safety challenges will determine the sector’s success in contributing to India’s long-term energy goals.

India’s ambitious expansion of its nuclear energy sector, presents both opportunities and challenges. Strengthening regulatory oversight, addressing liability concerns, and ensuring public safety will be essential for the sustainable growth of nuclear energy in India.