The Indian government has unveiled draft regulations under the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, shedding light on the long-debated mechanism for setting tariffs for nuclear power generated by private players. This move addresses a key concern for the industry, which has consistently advocated for greater autonomy in tariff determination.
Committee to Determine Tariff Norms
According to the draft SHANTI rules, a committee constituted by the Central Government will be responsible for establishing the norms and mechanisms for fixing tariffs for electricity supply from private atomic energy plants. This committee's recommendations will guide tariff fixation in accordance with Section 37 of the Act. The rules also cover charges for process heat, isotope production, and other services.
A significant detail in the draft rules concerns the Atomic Energy Redressal Advisory Council. While the quorum for its meetings is three, the presence of the Chairperson of the Central Electricity Authority (CEA) is explicitly mandated for any matter related to tariffs. This ensures expert oversight from the national electricity regulatory body in pricing decisions.
Industry Demands for Tariff Freedom
The private sector has long sought a more liberal framework for nuclear power tariffs, pushing for competitive bidding and a separate regulatory authority distinct from government control. Currently, tariffs for existing nuclear plants are jointly decided by the Department of Atomic Energy (DAE) and the CEA, while other power generators fall under the Central Electricity Regulatory Commission (CERC).
Industry players, particularly in their submissions for the NPCIL Request for Proposal for Bharat Small Reactors (BSR), have expressed a desire for developers to have the freedom to sell, use, or supply electricity generated as per the Electricity Act 2003, without requiring DAE approval on tariffs. This push aligns with recommendations from a panel tasked with outlining India's ambitious 100 GW nuclear capacity roadmap by 2047, which suggested separating tariff regulation from the government as the private sector enters the atomic energy space.
The draft SHANTI rules, released for public consultation and feedback until September 4, represent a crucial step towards clarifying the regulatory landscape for private investment in India's nuclear power sector.