| Reference Date | Version | October 10, 2024 | 1.0 |
| Keywords | Nuclear energy, Small Modular Reactors (SMRs), Regulatory challenges, Licensing harmonization, SMR technology |
| Legislation(s)/Policies |
(i) The Atomic Energy Act, 1962 (ii) Foreign Exchange Management (Non-debt Instruments) Rules, 2019 |
| Jurisdiction | India |
Expert guidance from energy legal advisors and infrastructure legal advisors is advisable to handle projects in these areas as an integrated approach would be required which needs to flow down to transaction and documentation structuring.
Introduction
India aims to achieve net zero carbon emissions by 2070 . Therefore, it is necessary for India to diversify its clean energy portfolio to meet its population’s current and growing demands.
The projected all-India peak electricity demand and electrical energy requirement are expected to increase significantly in the coming years as per the 20th Electric Power Survey (EPS) Demand projections.
Nuclear power promises a viable solution for diversification of the clean energy portfolio. Apart from being one of the lowest greenhouse gas emitters in life-cycle analysis, nuclear power also has the ability to provide baseload power and contribute to a stable and resilient electrical grid.
The country’s installed nuclear power capacity as of July 24, 2024, is 8,180 MWe spread across 24 nuclear power reactors. The installed nuclear power capacity is projected to increase to 22,480 MWe by 2031-32.
Traditional large-scale reactors require extensive infrastructure investment and long construction periods. This is precisely why Small Modular Reactors (SMRs) are becoming globally attractive.
Countries such as China and the USA have active programmes dedicated to SMR design and technology development. India is also developing Bharat Small Reactor (BSR) and Bharat Small Modular Reactor (BSMR) technologies.
This article discusses the regulatory landscape for SMRs in India.
SMRs: Indian Context
Small Modular Reactors (SMRs) are nuclear reactors with a power capacity of up to 300 MWe designed with modular technology using factory fabrication methods.
Key Features of SMRs
- Small: SMRs require significantly less land compared to conventional nuclear reactors.
- Modular: Components are manufactured in controlled factory environments and transported to project sites.
- Reactors: SMRs use nuclear fission to generate heat and electricity.
Unlike traditional large reactors, SMRs have shorter construction timeframes and lower capital expenditure requirements.
India is actively taking steps to develop SMRs with capacities up to 300 MWe as part of its clean energy transition strategy.
The government is exploring international collaborations and examining the Atomic Energy Act, 1962 to facilitate private sector participation in SMR development.
Technology sharing and funding availability remain critical for ensuring commercial viability of SMR technology.
Regulatory Framework Surrounding SMRs
The Atomic Energy Act, 1962 governs the development, control and use of atomic energy in India.
The Atomic Energy Regulatory Board (AERB) was constituted in 1983 to oversee safety and regulatory functions.
The current legislative framework permits only the Central Government or government-controlled entities to produce, develop, use and dispose of atomic energy.
Under the Act, a government company must have at least 51% shareholding held by the Central Government.
Atomic energy currently falls under sectors not open for foreign direct investment under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
Strategic partnerships are essential for SMR deployment; however, the present legal framework does not sufficiently facilitate collaborations with private companies, academic institutions and national laboratories.
Licensing Process
The licensing process for nuclear facilities involves multiple stages throughout the lifecycle of a project:
- Siting
- Construction
- Commissioning
- Operation
- De-commissioning
The licensing process for SMRs requires experimentation and real-time modifications to address viability and safety concerns.
Harmonization of licensing procedures and regulatory requirements is crucial for reducing construction timelines and optimizing overall costs.
Global harmonization can help achieve economies of serial production and improve commercial viability of SMRs.
Financing Challenges
Financing remains one of the major challenges for SMR development.
Private investment in the sector remains limited due to uncertainty in SMR costs, safety concerns, long construction periods and nuclear waste management issues.
Government support through research funding and initial project financing will be critical to encourage future large-scale deployment of SMR technology.
Viewpoint
Nuclear power has historically faced societal scepticism; however, increasing demand for cleaner energy alternatives is reviving interest in the sector.
Like any emerging industry, the SMR sector faces challenges relating to technology development, manufacturing techniques, financing and regulatory harmonization.
SMRs possess several advantages including lower nuclear material inventory, modular deployment, standardization and phased capital expenditure.
Global regulatory harmonization, manufacturing ecosystem development and increased public as well as private investment will be essential for growth of the SMR industry.
India may also consider reducing dependency on imported uranium and exploring alternatives such as thorium to strengthen long-term energy security.
The current legal structure presents significant challenges for development of the SMR ecosystem in India.
There is a pressing need for a proper regulatory framework along with a single-window approval and licensing mechanism to facilitate SMR deployment in India.
Legal Support in Energy and Sustainability Sector
Source
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Department of Atomic Energy, PIB Release dated July 25, 2024.
Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=2037046 -
Department of Atomic Energy, PIB Release dated June 25, 2024.
Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2028578 -
Department of Atomic Energy, PIB Release dated June 25, 2024.
Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1945029
Riddhi Rahi (Ms) and Ashwini Panwar (Mr)
Associate at Alaya Legal
