As RIL, Adani, Tata wait in the wings, this 90-page rulebook could shatter India’s N-power dreams

July 22, 2008. The Lok Sabha was looking nothing less than a battlefield. On one side were opposition MPs – shouting slogans against the India-US nuclear deal, threatening to bring down the UPA-led government at the Centre. On the other side was Prime Minister Manmohan Singh, sitting stoically through the chaos. In the end, his government survived a no-confidence motion, so did the deal. “Nuclear power would secure India’s future,” Singh had declared back then. Seventeen years later, the ground reality is something else. Nuclear energy contributes barely 8.8 gigawatt (GW) to India’s 476 GW installed power capacity. In the last decade, India added just 2.9 GW of nuclear power. China, on the other hand, added a staggering 32.8 GW, positioning itself as a leader on the global nuclear power map. Globally, nuclear energy accounts for nearly 10% of electricity supply. In India, it contributes less than 3%. The NDA government wants to change this. But the needle hasn’t moved much so far.The public-private partnership pushIn July 2024, Finance Minister Nirmala Sitharaman attempted to revive India’s atomic dreams. In a first, the Union Budget announced that India would bring private companies into the nuclear fold, breaking the monopoly of the state-owned Nuclear Power Corporation of India Limited (NPCIL). An INR20,000 crore Nuclear Energy Mission was unveiled to develop Bharat Small Reactors (BSRs) and small modular reactors (SMRs), tailormade for industrial clusters and micro-grids. Within weeks, India’s most powerful industrial houses – Reliance, Adani, Tata, Birla, JSW – lined up with intent. Newspaper headlines called it a “1991 moment” for India’s nuclear power space. But when NPCIL floated its first request for proposal (RFP) in December 2024, the euphoria turned into confusion. The RFP has since been extended multiple times, with deadlines pushed because of overwhelming queries from industry. By June 2025, over 700 formal queries had been submitted, forcing NPCIL to issue repeated clarifications. The RFP labyrinthThe RFP, nearly 90 pages long, has since become infamous in boardrooms. What began as an invitation has spiralled into a bureaucratic tug of war. Friction point #1: At the heart of industry’s anger is the “expertise fee” of 60 paise per unit of electricity generated to be paid to NPCIL. ACME Solar, a pure-play renewable energy producer, calculated that over a 40-year life cycle, this alone would add up to INR1,250 crore, almost one-third of total project cost. Adani argued that such fees make projects “commercially unviable from the start.” NPCIL’s projected operation and maintenance (O&M) costs of INR47.47 lakh per megawatt (MW) in 2017-18 terms, escalating at 6% annually, would rise to nearly INR80 lakh/MW by 2027. Private firms like Jindal Power and Tata Power insisted the realistic figure should be half. “It is almost as if inefficiency is being built into the cost structure,” one executive remarked. Friction point #2: Even more baffling was NPCIL’s decision to fix the plant load factor (PLF) at 65%-72.5%, even as the Kaiga nuclear plant in Karnataka, which has been running the 220 MW pressurised heavy water reactors, is consistently averaging 95% efficiency for the past five years. Reliance flagged that every 10% drop in PLF wipes out investor returns, making the project “unbankable”. Friction point #3: Ownership was another minefield. By law, nuclear assets cannot be privately owned in India. The reactors, land and licences would remain with NPCIL. Private companies would merely fund construction and take “beneficial ownership” of the electricity. ACME warned that lenders would not finance such projects without hard assets as collateral, and suggested NPCIL underwrite revenues or provide sovereign guarantees. But both requests were rejected. Friction point #4: Land acquisition was another contentious issue. Companies were asked to secure 314 hectares for each reactor, including a 1-km exclusion zone. ACME requested that the exclusion radius be reduced to 0.5km to ease land-acquisition challenges. NPCIL responded saying that the matter was “under review by Atomic Energy Regulatory Board (AERB).” Industry’s demandsAt its core, the nuclear experiment has become a clash of cultures. For private industry, success means speed, flexibility, efficiency and clear returns. For NPCIL and the Department of Atomic Energy, nuclear energy is a fortress – built on secrecy, caution, and centralised control. “India is asking private companies to invest billions without ownership, tariff freedom or liability clarity. That is not a partnership, it’s subcontracting with risk attached,” says Vivek Jain, director at India Ratings and Research. Adani Group demanded that only the ‘nuclear island’, the reactor core, be subject to NPCIL and AERB approval, with balance-of-plant systems left to private contractors. Birla Group argued for captive nuclear supply to industries, similar to renewable energy PPAs (power purchase agreements). ACME insisted nuclear power be granted ‘green energy’ status so that it qualifies for green financing. In reply, NPCIL said the demands were “not relevant to RFP and terms shall prevail.” A non-starter?This private players-NPCIL tug of war has dented India’s nuclear power dreams. Here’s how. In China, 54 reactors are in operation and 22 are under construction, with a clear pipeline that will double capacity by 2035. In the United States, privately owned utilities like Exelon and Duke Energy profitably run dozens of reactors, under the oversight of independent regulators. In the UAE, which began its nuclear programme in 2009, the Barakah plant is already delivering 5.6 GW – more than half of India’s nuclear power capacity. Meanwhile, India has 25 reactors producing 8.8 GW, with another 18 (13.6 GW) under construction. Even if all are completed, nuclear capacity will only reach 22 GW by 2032 - barely a fifth of the 100 GW target for 2047. 123748283For India’s industrial giants, nuclear energy could not only help in decarbonisation but also provide the much-needed supply of renewable power. Steel, cement, and chemical makers need baseload green power that solar and wind cannot provide. But the risk of policy failure looms large. Analysts warn nuclear could go the UMPP (ultra mega power projects) or biofuel way, where grand ideas collapsed due to poor policy design and implementation. UMPPs were sold as the silver bullet for the country’s power deficit with massive 4,000 MW plants that would deliver cheap electricity at scale. Instead, they collapsed into a graveyard of stranded assets. Soaring coal prices gutted project economics, red tape strangled land acquisition, and regulatory flip-flops sent investors running to the courts. What was meant to be India’s big leap in power generation became a spectacular policy failure, leaving behind half-built plants and billions in wasted capital. If policymakers think nuclear can be built on the same cocktail of grandstanding and shaky assumptions, they are not just ignoring history but inviting it to repeat itself. The road aheadThe government now has two choices. It can stick to the half-measures of the current RFP of keeping ownership, setting tariffs, levying fees and risk nuclear stagnation. Or it can craft a bold partnership model that balances national security with commercial viability: reducing fees, revising PLF, easing liability and offering tariff flexibility. There are whispers in Delhi that the Civil Liability for Nuclear Damage Act, 2010 may be amended to shift more liability onto the state. This could be an essential step if foreign players like Westinghouse or Rosatom are ever to enter the Indian nuclear energy sector meaningfully. NPCIL has also hinted it may explore co-licensee models with private companies. But without clarity, investors remain wary. India’s nuclear story began with Jawaharlal Nehru’s scientific optimism, survived Manmohan Singh’s political gamble, and now rests on Narendra Modi’s experiment with private capital. But every month of delay, every RFP extension, every unanswered query chips away at credibility. As one executive who has pored over NPCIL’s RFP puts it, “We entered expecting collaboration, but what we encountered felt more like control than partnership.” If India cannot reconcile its instinct for control with industry’s demand for commercial viability, it risks repeating its own history of grand announcements, missed targets and a nation forever chasing but never leading the nuclear revolution. (Graphic by Sadhana Saxena)