The rules require nuclear plant operators to maintain an insurance policy, financial security or a combination of both to cover civil liability for nuclear damage.
SHANTI Rules Explained
The draft rules announced by the Department of Atomic Energy (DAE) under the Sustainable Harnessing and Advancement of Nuclear Energy (SHANTI) Act are "very well-structured" and many of its provisions are "genuine steps forward", according to independent experts.
The rules require nuclear plant operators to maintain an insurance policy, financial security or a combination of both to cover civil liability for nuclear damage.
Such financial security must remain in place till all spent fuel has been removed from the concerned storage pool.
Further, a nuclear plant or reactor of foreign design must be certified or approved in the country of origin by its regulatory body, along with a provision that it should also be operational in the country of origin, or another foreign country.
Key Points
- Experts called the SHANTI Act draft rules well-structured and a genuine step forward for India's nuclear sector.
- Operators must maintain insurance or financial security for nuclear liability until spent fuel is removed.
- Foreign-designed reactors must be approved and operational in their country of origin or another foreign country.
- The rules introduce a single licence covering construction, operation and decommissioning of nuclear plants.
- Questions remain over tariffs, lender protection and whether nuclear projects can be delivered at competitive costs.
Private Investment Boost
The rules provide for the Centre to constitute a group of experts every five years to review the maximum limits of an operator's civil liability for nuclear damage.
"The provisions relating to pre-licensing consultation and in-principle approval prior to finalisation of technology and site will provide a well-structured mechanism for processing of potential license applications from interested investors," said Anujesh Dwivedi, partner, Deloitte India.
The in-principle approval will provide reasonable clarity to investors before making any major financial commitments, Dwivedi added.
On receipt of the application to set up a nuclear power plant, the licensing authority will carry out an initial assessment of the applicant's credentials with respect to corporate form and governing board.
It will also assess the applicant's understanding of the obligations and responsibilities towards regulatory compliances, including site selection, life-time design support, radioactive waste management, spent fuel storage and infrastructure, among others.
However, this approval can be revoked if there is a 'supervening public interest' or the person granted approval is owned, controlled or dominated by entities who are inimical to defence and national security, or public health and safety; or on grounds of misrepresentation or suppression of facts.
Single Lifecycle Licence
The rules also mention there will be a single composite licence authorising the building, owning, operating and decommissioning of the nuclear power plant or reactor.
They also contain provisions relating to fuel fabrication facilities, exploration and mining of uranium and thorium, foreign and domestic trade of nuclear fuel, among others.
"It marks a genuine step forward: A single lifecycle licence, entry for private and industrial players, and the costs of spent fuel and decommissioning charged into the tariff rather than left to the future," said Rohit Vijay, associate fellow, Centre for Social and Economic Progress, adding that it addresses the lifecycle discipline most Indian infrastructure lacks.
However, he said there is still no clarity on what will ultimately determine nuclear power's cost and build speed.
"Tariff methodology, levy rates and lender protection are yet to be settled. Nuclear can supply firm, low-carbon capacity for a solar-heavy grid. Whether these rules deliver it at a price the system will pay remains an open question," said Vijay.
The rules also propose that the operator of a nuclear installation will be liable on a "no-fault basis" for nuclear damage, including damage during the transport of nuclear material.
If compensation for a nuclear incident exceeds the prescribed liability amount, including for damage occurring beyond India's territorial waters involving an Indian-registered ship or aircraft, the Centre may exercise its rights as a Contracting Party to the Convention on Supplementary Compensation for Nuclear Damage by notifying other contracting parties, requesting the required public funds and disbursing those funds towards compensation under the Act.
If an accident involving radioactive material or radiation, other than a 'nuclear incident' under the Act, occurs at a facility, plant, mine or during its transport, the licensee or safety authorisation holder, including the consignor, will be responsible for compensating damage resulting in death, personal injury or health impacts, and property damage or loss, and must maintain sufficient financial security to meet compensation claims.
India's 100 GW Goal
Addressing the nation on the 80th Independence Day, Prime Minister Narendra Modi had said: 'With the SHANTI Act passed in Parliament, we have created the framework to achieve our goal... to achieve 100 gigawatts of nuclear power capacity. We aim to start five new nuclear reactors in this decade.'
Feature Presentation: Ashish Narsale/Rediff
