In line with the industry expectations and the target of achieving net-zero, the government announced a series of policy reforms aimed at promoting nuclear energy adoption and strengthening of the country’s electricity distribution and transmission sector.
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The government envisages a 100 gigawatt (GW) of nuclear energy capacity by 2047 as a part of its energy transition efforts. To achieve the same, it aims to increase private sector participation in setting up nuclear capacities by amending the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, finance minister announced. For the purpose, the minister also announced the setting up of a Nuclear Energy Mission for the research and development of Small Modular Reactors (SMR) with an outlay of Rs 20,000 crore. The government has targeted at least 5 indigenously developed SMRs that will be operationalised by 2033. “Today’s announcement in the nuclear sector will go a long way towards enabling Final Investment Decisions (FIDs) in this space, ” said Ashwin Jacob, partner at Deloitte India. “We expect several industries — both traditional hard-to-abate sectors and also the new-age users of power, data centres — to start evaluating investments in this space,” he said. In the last year’s budget, the government had announced partnering with the private sector for setting up Bharat Small Reactors and in the research and development of Bharat Small Modular Reactor and new technologies for nuclear energy.
“For this a range of issues have to be addressed including on technology, fuel, safety, liabilities and costs. Setting a clear north star on development of nuclear power at scale through the Budget provides directional clarity on these issues. However, a string of follow-on measures will be required to ensure implementation of the goals and attract,” said Anish De, global head of energy, natural resources and chemicals, KPMG. In addition to this, the government also said that it will incentivise electricity distribution reforms and augmentation of intra-state transmission capacity by states. The move is likely to improve the financial status of the discoms while expanding the transmission network as the country’s power demand rises. “This will improve the financial health and capacity of electricity companies. Additional borrowing of 0.5% of GSDP (Gross State Domestic Product) will be allowed to states, contingent on these reforms,” the finance minister said.
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