Nalco's foray into nuclear energy hits legal roadblock

Proposed Rs 12,000-cr nuclear energy plant in a JV with Nuclear Power Corporation in limbo

National Aluminium Company (Nalco)'s plan to foray into nuclear energy generation has hit a legal roadblock. 

The aluminium major, which had proposed to set up a Rs 12,000 crore nuclear energy plant in joint venture with Nuclear Power Corporation of India Ltd (NPCIL), is unable to go ahead with the project. This is because the Atomic Energy Act restricts entry into nuclear energy to only a few wholly-owned subsidiaries under the Atomic Energy Department.

"We are waiting for suitable changes in the Act before going ahead with the investment. We hope it will done soon", said T K Chand, chairman and managing director of Nalco.

 

Currently, NPCIL and Bharatiya Nabhikiya Vidyut Nigam Ltd (BHAVINI) are the two Central government-owned companies authorised to set up nuclear power plants in the country. They are responsible for design, construction, commissioning and operation of thermal nuclear power plants.

Though NPCIL is keen to involve other public sector firms such as Nalco, IOCL and NTPC, with whom it has signed MoUs, for setting up nuclear power plants in a bid to expand its nuclear power footprint in the country, the existing Act does not allow this.

The Atomic Energy Act, framed in 1962, also prohibits private control of nuclear power generation though it allows minority investment from the private sector.

The Nalco-NPCIL MoU, inked in 2012, envisaged the execution of units 3 and 4 at the Kakrapara Atomic Power Station (KAPS) in Gujarat. Each unit has a capacity of 700 Mw. As per the JV agreement, Nalco would have 26 per cent stake in the new entity, NPCIL-Nalco Power Company Limited.

Apart from the issue of fuel supply and protests over the establishment of nuclear power plants, changes in the Act to allow JVs formed by NPCIL with other PSUs to make them workable is another hurdle. The Indian government has to take care if the country wants to achieve 20 GWe nuclear energy capacity by 2020, sources said.

Besides nuclear energy, the aluminium major has identified renewable energy as its next focused area.

"We have set up wind mills in Andhra Pradesh (50.4 Mw) and Jaisalmer (47.6 Mw) in Rajasthan. We plan to set up solar plants in Rajasthan and Maharashtra (50 Mw each) and Madhya Pradesh (20 Mw). We are also in the processing of installing a 14 Mw wind power mill at Damanjodi," Chand said.