Several nuclear power projects held up for the lack of such an insurance pool can now be expected to move forward. Rashme Sehgal reports.
In a major breakthrough, the Centre has launched an insurance pool of Rs 1,500 crore (Rs 15 billion) which has been mandated by law and which the Nuclear Power Corporation of India will have to pay affected parties in the event of a nuclear accident.
Several nuclear power projects like the long-pending Gorakhpur Haryana Anu Vidyut Pariyojna that had been held up for lack of such an insurance pool can now be expected to move forward.
Minister of State in the Department of Atomic Energy Jitendra Singh declared in New Delhi that such an insurance pool was required under the Civil Liability for Nuclear Damage Act in order to offset the financial burden on foreign nuclear suppliers.
The General Insurance Company of India had been appointed as the fund manager for the pool, Singh added.
While GIC has committed to contributing Rs 750 crore (Rs 7.5 billion) to the nuclear pool, private and public sector companies are committed to contribute a substantial amount. The remaining gap of Rs 500 crore (Rs 5 billion) would be met by the British Nuclear Insurance Pool.
Dr R K Sinha, secretary, Department of Atomic Energy, said such a fund would address the concerns of suppliers.
The policies offered would consist of a nuclear operators' liability insurance policy and a nuclear suppliers' special contingency (against right to recourse) insurance policy.
There were clauses in the Nuclear Liability Act which had allowed the operator the right to recourse and allowed it to sue suppliers in the event of an accident. This had acted as a brake to the growth of India's nuclear industry. Such concerns led the Centre to create a nuclear insurance pool.
"Now we have a policy for the entire nuclear industry of the country," Singh said, adding that foreign contributions to the pool "would not result in foreign inspectors inspecting the nuclear plants (covered by the insurance pool)."
The Gorakhpur Haryana Anu Vidyut Pariyojna was meant to be a pressurised heavy water reactor which was sanctioned by the Manmohan Singh government. It encountered problems like the tenders not maturing due to the absence of an insurance pool. The launch of the insurance pool would enable suppliers to come forward for the project, Jitendra Singh felt.
Setting up the Gorakhpur Haryana Anu Vidyut Pariyojna, Singh added, would help bring Haryana, Himachal Pradesh, Jammu and Kashmir into the fold of the nuclear industry and would "give the atomic energy programme a pan-Indian image."
The pre-engineering agreement with Areva for technical know-how and the deal with Canada to import 3,000 tonnes of uranium would help increase India's nuclear capability three-fold, the minister said.
The Department of Atomic Energy presently has 21 nuclear power reactors with a total installed generating capacity of 5780 MW of electricity. The Nuclear Power Corporation of India achieved the highest power generation of 37,835 million units of electricity in 2014-2015, seven per cent higher than the previous year.
Unit 5 of the Rajasthan Atomic Power Station completed 765 days of continuous operation on September 6, 2014, Singh pointed out, making it the longest in the world in the last 20 years and the second longest in the 60-year history of nuclear power.
So far, continuous operation of more than one year has been logged by Indian reactors 20 times, including seven reactors registering this feat during the last one year.
Another milestone for the DAE would be the commissioning of the Prototype Fast Breeder Reactor which was nearing completion of construction at Kalpakkam, Chennai.
The Kudankulam Unit 1, set up with technical cooperation with the Russian Federation, reached its rated capacity of 1,000 MW on June 7, 2014, and had begun commercial operations from the end of 2014, Singh added.
Kudankulam's Unit 2 was getting closer to commissioning with the hot run being completed, a pre-requisite for fuel-loading and further commissioning activities.
The insurance pool, the minister felt, would prove a major catalyst in helping the Centre achieve Prime Minister Narendra Modi's vision of tripling energy generation from the nuclear sector in the next five years.
Image: The Kudankulam nuclear power plant in Tamil Nadu. Photograph published only for representational purposes.