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India to allow private players in nuclear sector

Moving ahead of Indo-US N-deal, Govt may soon allow pvt firms to build and run N-power plants in India, reports Chetan Chauhan.

india Updated: Apr 05, 2007 23:54 IST

Moving ahead of Indo-US nuclear deal, the government may soon allow private firms to build and run nuclear power plants in India.

A proposal to permit firms registered under the Companies Act to build nuclear plants is under the consideration of the Central government, said Dr Karit S Parikh, member (energy) Planning Commission, in a presentation to US energy secretary William Bodman, recently.

The proposed changes was also sold as a proposition to United States as an opportunity to set up ‘ultra mega’ power plants in the India. The government is also willing to relax the norms to allow easy entry of private international players in the energy sector, in a bid to meet the country’s growing energy demand. Parikh said, the government was considering relaxing the norms to allow private firms, registered under the Companies Act.

As an assurance that the power plant will not close down like Enron owned Dabhol Power Project, the government has assured of lifetime cost based purchase from the plant set up by the private sector. Karit also expressed the government’s willingness to reduce the dominance of public sector in power generation and distribution, identifying the Electricity Act of 2003 as a step in this direction.

The major reforms under government consideration are strengthening regulation and making it independent, ensuring common carrier principle for transmission and distribution assets, introducing tariff based international competitive bidding level terms and removing entry barriers for international players. “The government wants to have a level playing field for private participation,” he said.

The government is also considering setting up of National Energy Fund as recommended by Integrated Energy Policy report, encouraging zero emission technologies and three stage nuclear programme aimed at utilising thorium.

In all this, the government has identified US as a major collaborator. Five major areas - setting up ultra mega projects, exploration and exploitation of oil, natural gas and coal, development of nuclear power plants, manufacturing of power related equipment and coal mining equipment - have been identified for cooperation with the US.

Energy consumption/capita
India : 550 kWH
China : 1380 kWH
US : 13,070 kWH
World : 2430 kWH

Total energy needs
Requirement in 2006 : 617 billion kWH
If economy grows by 8 per cent: 3,880 billion kWH by 2031-32 and 4806 kWH by 2031-32