SHANTI Act: Opening India's Nuclear Power Sector

The SHANTI Act, recently passed in the Indian Parliament, marks a significant shift in the nuclear power sector by allowing private entities to operate nuclear plants and altering the liability framework under the Civil Liability for Nuclear Damage Act (CLNDA).

Key Features of the SHANTI Act

• Private Operation: Ends exclusive government control over nuclear plants.
• Indemnification of Suppliers: 
  • Channels liability for nuclear accidents to operators.
  • Eliminates the "right of recourse" which allowed operators to sue suppliers for equipment defects.
• Liability Caps: 
  • Operator liability set between ₹100 crore for small plants and ₹3,000 crore for large plants.
  • Total accident liability capped at 300 million Special Drawing Rights (approx. ₹3,900 crore).
• Omission of Clause 46 of CLNDA: Restricts victims from seeking remedies under other laws.
• Atomic Energy Regulatory Board: Created but with limited independence, as member selection is controlled by the Atomic Energy Commission.

Concerns and Implications

• Design Defects: Historical accidents like Fukushima and Chernobyl were exacerbated by design flaws.
• Lack of Scientific Basis: Indemnity for suppliers lacks scientific justification, despite international pressure for liability alignment.
• Financial Risks: Projected costs of historical accidents, like Fukushima's ₹46 lakh crore, far exceed the capped liability under the SHANTI Act.
• Moral Hazard: Protection from consequences may lead to increased risk-taking by operators.
• Natural Disasters: Indemnification extends to accidents caused by natural disasters, reducing the incentive for resilient plant designs.

Nuclear Energy in India

• Limited Contribution: Nuclear energy constitutes only about 3% of India's electricity generation.
• Unrealized Goals: Past and current targets for nuclear capacity remain unmet due to high costs and safety concerns.
• Commercial Opportunities: Despite limited capacity, there are substantial economic opportunities for private and multinational companies.