Nuclear Energy in India. Overview, Opportunities, and Obstacles

Transcription

1 Nuclear Energy in India Overview, Opportunities, and Obstacles

2 Today s elunch Presenter Tyson R. Smith Partner trsmith@winston.com 2

3 Overview

4 History of India s Nuclear Program 1948 Atomic Energy Act 1954 Established Dept. of Atomic Energy (DAE) 1956 First research reactor 1963 Began construction of first commercial nuclear station 1967 India announced it would not sign NPT 1973 First heavy-water reactor 1974 India tested first atomic weapon 1983 Established AERB Established Atomic Energy Research Commission Primarily indigenous reactors brought online 4

5 India s Nuclear Industry Operator of Nuclear Power Plants Civilian Nuclear Regulator Fuel Uranium 5

6 Stable, Competent Nuclear Regulator Hierarchy of requirements similar to the U.S. Published by AERB Addresses topics such as siting, design bases, reactor safety, QA, security, etc. Similar phases/approvals Environmental Siting Construction Excavation First pour safety-related concrete Erection of major equipment Commissioning High-quality program Reactive (e.g., post-fukushima) IRRS Mission Findings AERB independence is next 6

7 Established Nuclear Power Program Station Type Units/MW Tarapur BWR 2x160 PHWR 2x540 Rajasthan PHWR 1x100 1x200 4x220 Kudankulam VVER x1000 Kaiga PHWR 4x220 Kakrapar PHWR 2x220 Madras PHWR 2x220 Narona PHWR 2x220 7

8 Sustained International Progress In 2008, U.S. and India entered into a Section 123 Agreement under AEA Obtained waiver from Nuclear Suppliers Group (NSG) 8

9 Opportunities

10 Substantial Need for New (Clean) Energy Populous & Growing 1.3 billion people 1/6 of global population 1.25% population growth Youthful 50% below age 25 Brownouts are common Power for All Double energy capacity by 2019 Investment potential of >$220 billion in next 4-5 years Clean energy? Installed Capacity (2016) Gigawatts Goal: Close this gap Coal Gas Hydro Renewables Nuclear 11

11 At Cusp of Major Nuclear Expansion 25% of electricity from nuclear power by 2050 (currently, 3.5%) Multiple reactors under construction Market estimated at $150 billion Nuclear Energy Capacity (GWe) 63 About the same as in China 40 Station Type Units/MW 30 Rajasthan Unit 7 & 8 PHWR 2x Kakrapar Unit 3 & 4 PHWR 2x700 Madras (Kalpakkam) PFBR 1x

12 Already Benefitting from Access to Fuel TVEL MT natural oxide pellets TVEL MT enriched oxide pellets TVEL MT enriched oxide pellets KAZ MT natural ore concentrates Annual Capacity Factor (Percent) KAZ MT AREVA MT natural ore concentrates natural ore concentrates Cameco MT natural ore concentrates

13 Significant Foreign Investment Coming? 14

14 Obstacles Remain, But Solutions Here (or on the Way)

15 Right of Recourse Complicates Liability Law Strict Liability Exclusive Liability Financial Protection Liability Limits Single Court International Principles Relieving victims of need to prove fault or negligence Ensuring that the operator is the only entity liable to compensate for damage (even if caused by a supplier or vendor) Covering the operator s liability Ensuring funds are available to compensate victims Limits in time and amount Enabling operator to set up a cost-effective mechanism to cover the liability amount Providing consistent treatment of claims in the recognition and execution of judgments Indian Approach The Civil Liability for Nuclear Damage Act, 2010 Section 6 sets operator s liability limits Section 17 gives operator right to recourse against supplier Section 24 provides that supplier s liability limited to extent of operator s liability Section 46 channels liability to the operator Survived legal challenges 16

16 Strong Gov't Support for Resolving Issues Efforts to assuage supplier concerns U.S.-India announce breakthrough on liability Ministry of External Affairs publishes answers to FAQ India ratifies the Convention on Supplementary Compensation Bilateral agreements Nuclear Insurance Pool 17

17 Critical Commercial Infrastructure in Place 27th global nuclear insurance pool 1500 crore rupees (per CLND) Approximately $226 million USD Policy for operators and suppliers for third party (public) nuclear liability Nuclear Operators Insurance Policy Nuclear Suppliers Special Contingency First insurance policy for right of recourse unveiled by India Nuclear Insurance Pool in August 2016 Commercial infrastructures now largely in place Tier 1 Tier 2 Tier 3 Operators Turnkey Suppliers Other Suppliers 18

18 Financing Necessary from Multiple Sources Export Credit Agencies U.S. Ex-Im Bank negotiating loan for Westinghouse projects But, no quorum to approve loans Congress holds keys to resolution Other Ex-Im Banks may have role, too Efforts to address NPCIL financial limitations Feb law permits NPCIL to enter into JV with other PSUs No private ownership or direct foreign investment (yet) 19

19 NSG Waiver Sufficient, But India Wants More 48-country NSG granted waiver to India in 2008 India seeking full membership Would ensure India s exports subject to same rules as others engaged in international nuclear trade Filed application to join NSG based on substantial progress, including: Civil-military separation Safeguards agreements with IAEA Adherence to NSG trigger and dual-use lists Would support achievement of COP-21 objectives But, opposed by others, including China 20

20 Summary

21 Takeaways Established nuclear industry and stable regulatory regime Demonstrated need for new nuclear generation Increasing energy demand Transitioning to cleaner energy production Strong government support for new nuclear Steady progress since 2008 Creating appropriate conditions for making investment decisions Regulatory and commercial infrastructure in place International agreements Liability and insurance issues on path to resolution 22

22 Thank You. Tyson R. Smith Partner