Plan to Amend Nuclear Liability Law May Encourage American and French Firms

Plan to Amend Nuclear Liability Law May Encourage American and French Firms

13-02-2025

 

  1. India is planning to amend key nuclear energy laws, the Civil Liability for Nuclear Damage Act (CLNDA), 2010, and the Atomic Energy Act, 1962, to address legal challenges and promote foreign investment.
  2. These changes were announced in the 2025 Budget, ahead of PM Modi’s visits to Washington and Paris in February 2025.
  3. The aim is to attract American and French companies to invest in India’s nuclear energy sector.
     

Comparison of Nuclear Liability Law Before and Proposed Amendments:
 

Aspect

Civil Liability for Nuclear Damage Act, 2010 & Atomic Energy Act, 1962

Proposed Changes to CLNDA & Atomic Energy Act, 1962

 

Operator Liability

Under CLNDA, 2010, operators were strictly liable for nuclear accidents, even if the incident wasn’t their fault.

Operators will remain responsible for accidents, but liability may be reduced or shared with suppliers under the revised CLNDA.

 

Supplier Liability

CLNDA, 2010 introduced supplier liability, making suppliers responsible for damages caused by defective equipment.

Supplier liability will be separated from operator liability, reducing suppliers’ financial risks under the revised CLNDA.

 

Financial Security

CLNDA, 2010 required operators to set aside sufficient funds for potential damages, with government stepping in if costs exceeded limits.

No significant change in financial security provisions, but revisions to liability rules reduce overall financial burden on operators under CLNDA.

 

Private Sector Participation

Atomic Energy Act, 1962 restricted private and foreign companies from owning or operating nuclear plants in India.

And it maintained public sector monopoly in the nuclear industry.

Amendment to the Atomic Energy Act will allow private and foreign companies to own and operate nuclear plants in India.

PPPs are encouraged with joint ventures between NPCIL (Nuclear Power Corporation of India) and foreign companies under the amended Atomic Energy Act.

 
 

International Standards Alignment

CLNDA, 2010 and Atomic Energy Act, 1962 were not fully aligned with international standards like the International Convention for Supplementary Compensation (CSC).

Amendments to CLNDA will align India’s laws with international standards, particularly the CSC (International Convention for Supplementary Compensation).

 

 

Background : Bhopal Tragedy and Its Impact on Nuclear Liability Law
 

  1. The 1984 Bhopal gas tragedy, where a gas leak from the Union Carbide plant killed thousands, influenced India's nuclear liability laws.
  2. It highlighted the need for strict accountability for foreign companies in the case of industrial accidents.
     

2012 Amendment to CLNDA
 

  1. In response to Bhopal, the government added the supplier liability clause, holding suppliers accountable for defective equipment.
  2. This led to concerns among foreign companies like Westinghouse and EDF who feared being financially liable for accidents tied to their supplied equipment, delaying projects.
     

Challenges Faced by American and French Firms
 

  1. Westinghouse and EDF raised concerns about the financial risks of the supplier liability clause, leading to the delay of several major projects.
  2. Kovvada (Andhra Pradesh): Westinghouse signed a deal in 2012 to build six AP1000 reactors, but the project has been delayed for over 15 years.
  3. Jaitapur (Maharashtra): EDF signed a deal in 2009 to build six EPR1650 reactors, but delays persist.
  4. Current Nuclear Power Capacity: India’s current nuclear capacity stands at 6,780 MW, with 22 reactors in operation.
  5. Foreign Operator: Rosatom (Russia) is the only foreign operator in India’s nuclear sector.
     

Key Budget Announcement (February 1, 2025)
 

  1. ₹20,000 crore allocated for developing five Small Modular Reactors (SMRs) by 2033.
  2. Nuclear Energy Target: India aims to reach 100 GW of nuclear power capacity by 2047, helping the country meet carbon emission reduction targets.
     

Impact on American and French Firms
 

  1. Encouraging Investment: Easing liability rules is expected to attract American and French companies to invest in India’s nuclear energy market.
  2. Faster Project Execution: The reduction in legal risks could speed up the construction of projects like those in Kovvada and Jaitapur, which have faced delays for 15 years.
  3. Advanced Nuclear Technologies: Partnerships with foreign firms will bring Small Modular Reactors (SMRs) and other advanced technologies to India, supporting clean energy goals.
     

What Are Small Modular Reactors (SMRs)?
 

  1. Small Modular Reactors (SMRs) are a type of nuclear reactor that are smaller in size and modular in design compared to traditional large-scale nuclear reactors.
  2. SMRs are designed to be factory-built, transported to the site, and assembled on location, making them more flexible and cost-effective.

 

About Nuclear Power Corporation of India Limited (NPCIL) – Key Points
 

  1. NPCIL: Public Sector Enterprise under the Department of Atomic Energy (DAE), Government of India.
  2. Established in September 1987 under the Companies Act, 1956.
  3. Primary purpose: Operate atomic power plants and implement nuclear power projects for electricity generation.
     

Core Functions:

  1. Responsible for design, construction, commissioning, and operation of nuclear reactors.
  2. Owns and operates 24 nuclear reactors with a total capacity of 8180 MW.
  3. Has an ongoing expansion with 8 reactors under construction, adding 6800 MW.
     

Vision & Mission

  1. Vision: Be globally proficient in nuclear technology, ensuring long-term energy security for India.
  2. Mission: Develop nuclear power as a safe, eco-friendly, and economically viable source of electricity.
     

Operating Units:

  1. Tarapur Atomic Power Station: Rajasthan Atomic Power Station: Madras Atomic Power Station: Narora Atomic Power Station:Kakrapar Atomic Power Station: Kaiga Generating Station: Kudankulam Nuclear Power Station: Wind Power: 10 MW Wind Power Plant at Kudankulam.

 

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