News / Asia

India’s Nuclear Liability Law Slows Power Plant Rollouts

FILE - A man stands with his son on the beach near the Kudankulam nuclear power project in the southern Indian state of Tamil Nadu.
FILE - A man stands with his son on the beach near the Kudankulam nuclear power project in the southern Indian state of Tamil Nadu.
Anjana Pasricha
In India, a Russian-built nuclear power station has begun generating power, raising hopes that it will ease energy shortages in the south. But the country’s ambitious plans to ramp up its nuclear power capacity are not panning out as expected.

The Kudankulam nuclear plant in southern Tamil Nadu state went online Tuesday by transmitting 160 megawatts of power to the local grid. In the coming weeks it will gradually be scaled up to its full capacity of 1000 megawatts to light up homes and industries.

However, hopes of boosting Kudankulam’s capacity even further suffered a setback this month during Prime Minister Manmohan Singh’s trip to Moscow.

Proponents hoped he would sign a deal to purchase two new nuclear reactors, each 1000 megawatts. But negotiations are stuck due to the strict civil nuclear liability law that India adopted in 2010 under pressure from the opposition and activists.

Foreign suppliers worry that this law disproportionately burdens sellers of nuclear technology with compensation payments in the case of an accident. They say India’s liability law is not consistent with international nuclear policies.

Despite the delay, Indian officials sound optimistic about getting the reactors from Russia and say they hope to iron out the differences in the coming months.

G. Balachandran at the Institute of Defense Studies and Analysis says India has tried to address some of the concerns by putting a cap on the liability of foreign suppliers in the event of a nuclear mishap.     

“When they [India] formulated the rules, they limited it to a five year period during which the right of recourse can be exercised. Not indefinite. They said it is not for unlimited amount. So they will be limited to a liability of 250 million dollars for a period of only five years,” said G. Balachandran.

India has long hoped that nuclear power is the answer to its energy woes. The landmark agreement New Delhi struck with the United States in 2008 lifted a three decade long ban on nuclear trade. The deal was expected to lead to investment of nearly $150 billion in India’s nuclear energy sector from countries like Russia, France and the United States.

But so far there has been little progress. Last month, India signed a preliminary contract with U.S.-based Westinghouse Electric Co. to purchase nuclear reactors.

Many analysts blame the liability law for slowing negotiations. Balachandran says foreign suppliers fear that other countries could cite India’s precedent to seek similar guarantees.

“That is the only small impediment I can see in the way of foreign companies saying I don’t want this to become a universal norm. Because that is true, all the other countries have passed a law which does not have right of recourse,” said Balachandran.   

The slowdown in the nuclear sector is a setback for a country which had hoped to scale up nuclear power from less than 5,000 megawatts 63,000 megawatts in 20 years to close the huge gap in its energy needs.  

There are other problems besides the liability law. Concerns have been growing among local communities about nuclear power safety in the wake of the 2011 Fukushima disaster in Japan. The Kudankulam nuclear project was repeatedly delayed due to protests by villagers living in the plant’s vicinity. The plant only came online after India’s Supreme Court ruled this May that the plant was safe and necessary for the country’s economic growth.

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