| Planning Commission deputy chairman Montek Singh Ahluwalia in New Delhi on Monday. Picture by Rajesh Kumar
New Delhi, Oct. 10: India is toying with the idea of allowing foreign direct investment in nuclear power but there’s a rider: such investment can only be allowed if nuclear nations agree to sell fuel along with technology for new plants. At present, FDI is not allowed in nuclear power.
Planning Commission deputy chairman Montek Singh Ahluwalia today said India could allow FDI in nuclear power if it gets nuclear fuel.
“It makes sense to allow FDI if it helps bring in fresh stocks of nuclear fuel,” Ahluwalia said at a meeting organised by the Forum of Financial Writers. But the plan panel boss quickly added that India would use its existing stocks of uranium in its own power projects for which no investment from abroad was required.
Ahluwalia’s comment is the first official indication of what most energy analysts had long believed ' that India would allow FDI in nuclear power generation in a bid to access new technology and fuel sources.
India produces just 3,300 mw of nuclear energy, which is about 2.8 per cent of the total energy generation of the country. Though the Union cabinet recently voted to build four new nuclear power plants, the problem in enhancing nuclear power capacity was the limited stock of nuclear fuel.
The country has an energy shortfall of nearly 10,000 mw, which is expected to at least triple in seven years. With its coal reserves running out, India is looking at hydroelectric power as well as nuclear energy to narrow down its shortfall. The country’s planners want India to try and jack up capacity to generate 20,000 mw of nuclear power by 2020.
Three months back, Prime Minister Manmohan Singh had signed a deal with US president George Bush on nuclear cooperation in the civilian sector. Soon after the deal, the Canadian and French governments came up with offers to support India’s civilian nuclear programmes. However, nuclear nations have yet to agree to sell nuclear fuel to India despite their offer to support. Obviously the carrot for them to agree to sell fuel along with technology will be the offer to allow FDI in the sector.
While it is important for India to access modern nuclear technology and fuel sources to supplement its limited uranium supplies, the 44-member Nuclear Supplier Group is also keen to work with India in the nuclear field.
“India represents a stable, large market which has a proven record of reliability in not proliferating nuclear technology ... just the kind of market which western nuclear energy companies are keen to tap,” agreed J.K. Dey, a senior power sector analyst. Firms like Electricite de France are believed to be interested in joining the hunt for nuclear power plants in India.