NEW DELHI, Dec. 13 (UPI) -- India is considering enacting new legislation to spearhead its nuclear power capacity with an ambitious target of expanding nuclear power generation from 3,000 megawatts to 30,000 MW over the next 20 years, and to allow foreign investment.
Global nuclear power companies are watching the new legislation and the plans the country's Power Ministry has drawn up following the passage of the landmark India-U.S. civilian nuclear agreement in the U.S. Senate.
India's leading state-run and private power companies, including National Thermal Power Corp., Reliance Energy and Tata Power, have initiated plans to get into the nuclear power sector. Private power-generating companies are awaiting the government's formulation of a policy that allows private investment in the nuclear sector. This policy is likely to be implemented once the Atomic Energy Act is amended, probably next year.
Several international energy majors - such as GE Energy, Siemens, Westinghouse and Alstom -- have held talks with Indian energy companies, including equipment-maker Bharat Heavy Electrical Ltd., for collaboration when the market is thrown open for private participation.
"There is vast potential in this market and domestic players are also keen to play their role," said Harry Dhaul, a key official of the Independent Power Producers of India, a flagship body of Indian power companies.
He said that depending on where the fuel is sourced, the cost of producing electricity from nuclear power plants was low - between 11 and 22 cents per unit.
Notwithstanding opposition from India's Communist parties and from the main opposition Bharatiya Janata Party, the India-U.S. civilian nuclear agreement has been welcomed. The nation's energy demands are rising on the back of rapid economic growth and supply is unable to match demand.
The timing of the deal assumes significance for India as it was planning to renegotiate a liquefied natural gas deal with Iran. U.S. President Bush and Indian Prime Minister Manmohan Singh had on July 18, 2005, signed a deal to allow civilian nuclear cooperation. India was denied such nuclear technology after it carried out nuclear weapons tests on May 11 and 13, 1998.
India planned to invest $100 billion in the nuclear power sector. Both the government and the private sector will build plants. The move is aimed at expanding the country's nuclear power generation capacity from 3,000 MW now to 30,000 MW over the next 20 years. The implementation of the civilian nuclear deal with the United States is expected go a long way toward achieving this target.
Nuclear power accounts for 3 percent of India's power generation. If the country's nuclear goals are met, it will still account for the same proportion. India has estimated that by 2031-32, the country's power generation capacity should increase to 800,000 MW from 160,000 MW.
Growth in India's nuclear power sector has been slow because of the limited supply of uranium, a key raw material. Uranium that is available domestically is low grade.
India's nuclear technology capability has also been questioned several times because the nation is still dependent on the import of some of key components for which a free market does not exist.
"Most of the nuclear power plants are unable to run full capacity due to non-availability of adequate and high-grade uranium," said Sukumar Shah, an energy analyst at the Federation of Indian Chambers of Commerce, a key body of Indian industries.
Analysts share the view the civilian nuclear energy deal with the United States has a significant impact from the strategic and energy security point of view. The government has said that if the deal goes through by the end of the ongoing winter session of parliament Dec. 19, it will move a bill in the next session in February to amend the Atomic Energy Act to allow foreign and domestic power companies to enter into the nuclear sector.
The prime minister's energy coordination committee, which monitors all government departments relating to energy, has asked state-run energy companies to come up with plans and projects for the new nuclear sector.
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