Bankers Thinking Twice about Funding the Nuclear Surge

 Oil Price published an interesting and important news report on April 14 regarding how bankers were not willing to fund the nuclear surge world over, especially the target to triple nuclear power by 2050. It appears that bankers view the sector with considerable pessimism owing to its project risks. The Vice-President of the European Investment Bank is reported to have stated that heavy state involvement is required to make projects bankable.

So what are the implications of these from a legal point of view? How could India create a legal environment for addressing these problems? If and when India opens up the nuclear sector for private players, especially for Small and Modular Reactors, the following aspects could be thought about:

• Permitting unincorporated joint ventures to build, transfer and operate nuclear power plants, similar to petroleum exploration and production, which is also a high risk venture.
• Use of standard forms such as FIDIC and other similar forms, which will take a balanced approach.
• Effective dispute resolution through conciliation, Dispute Adjudication/ Avoidance Boards, and arbitration.  
• Designing effective insurance policies to cater to risks, etc.

All these require development of expertise in India and it is important for law universities and government institutions to play a crucial role in the next decade in developing that expertise.

Hydrogen Hubs in India: Recent Regulatory Developments

The Ministry of New & Renewable Energy (MNRE) came up with the National Green Hydrogen Mission (NGHM) in January 2023, which aimed: "to provide a comprehensive action plan for establishing a Green Hydrogen ecosystem and catalysing a systemic response to the opportunities and challenges of this sunrise sector." The NGHM recognised India's Net Zero Target of 2070 but also underscored another important but relatively less talked about target: Energy Independence by 2047. The NGHM stated that green hydrogen was seen as playing a critical role in achieving these objectives.

For the uninitiated green hydrogen refers to hydrogen produced by electrolysis using renewable energy. There are other types of hydrogen depending on the emission the process of manufacture gives out. See here, for information on such other types of hydrogen. 

Hydrogen Hubs in the NGHM

The NGHM recognises that transportation of hydrogen would be a challenge, both technically and logistically, and therefore provides for cluster production, which would have the following features:

• Large scale production in a given area;
• Utilisation of the produced hydrogen also in the given area;

The NGHM contemplates development of clusters where there are refineries/ fertilizer plants and where pilot projects for application of hydrogen in areas such as steel production, ports development, mobility, etc. would be promoted.

The Mission also contemplates infrastructure for storage and deliver of green hydrogen, port infrastructure for export of derivatives of green hydrogen, pipelines for bulk transportation, coordinated financing, etc.

Scheme for Setting up Hydrogen Hubs, 2024

Further to the Mission, MNRE recently came up with a Scheme for setting up of hydrogen hubs with the following objectives:

"(i) To identify and develop regions capable of supporting large-scale production and/or utilization of Hydrogen as Green Hydrogen Hubs. 

(ii) Development of Green Hydrogen Projects inside the Hubs in an integrated manner to allow pooling of resources and achievement of scale 

(iii) Enhance the cost-competitiveness of Green Hydrogen and its derivatives vis-a-vis fossil-based alternatives 

(iv) Maximize production of Green Hydrogen and its derivatives in India within the stated financial support 

(v) Encourage large-scale utilization and exports of Green Hydrogen and its derivatives 

(vi) Enhance viability of Green Hydrogen assets across the value chain." (Para 3)

The Scheme contemplates the core infrastructure in hydrogen hubs, including Storage and transportation facilities for Green Hydrogen/its derivatives, Development/ upgradation of pipeline infrastructure, Green Hydrogen powered vehicle re-fuelling facility, Hydrogen compression and/or liquefaction technologies, as required, and so on (Para 2). 

The Scheme recognises the plan to set up two hydrogen hubs by 2025-26 and a budget outlay of about Rs. 200 crores.

Features of Hydrogen Hub under the Scheme

 

The Scheme contemplates a hydrogen hub with the following salient features:

• Hydrogen hubs will cater to domestic demand as well as to exports
• The hub will have a network of producers, users and supporting infrastructure
• Development of hydrogen infrastructure would have to be done in a coordinated manner and by pooling resources from the Central Govt., State Govt., Local Govt. and the industry
• A hydrogen hub should have a planned/announced capacity of a minimum of 1,00,000 MTPA. Higher production capacity would get more priority under the Scheme.
• Infrastructure, projects and resources would be mapped under the PM Gati Shakti.
• Recognition of hydrogen hubs by MNRE in other places is possible but without financial assistance.

Evaluation Criteria for Proposals

The Scheme recognises that detailed evaluation criteria would be provided in the Call for Proposals and would be based on the following:

Funding

Rs. 100 crores (Central Financial Assistance) per hydrogen hub would be allocated in order to support core infrastructure in the following manner and would be released on the basis of conditions detailed in the Call for Proposals:

Provisions regarding failure to utilise grants or complete the project would be mentioned in the Call for Proposals.

A Steering Committee (overall monitoring of scheme) and a Project Appraisal Committee (project review) will be constituted. MNRE would nominate Scheme Implementing Agencies (SIAs) to implement the Scheme and hydrogen hubs.

Comments

It would be interesting to see how the Call for Proposals shape up and how hydrogen hubs would be created. The timelines contemplated (2025-26) is very tight. Interesting times ahead for renewables and energy security in India.

Comment on India’s Statement at Nuclear Energy Summit Brussels 2024

On 21.03.2024, an important summit related to nuclear energy was held in Brussels. On behalf of India, Dr. Ajit Kumar Mohanty, Chairman, Atomic Energy Commission & Secretary, Department of Atomic Energy, delivered India's statement. This statement represents India's approach so far and in the near future regarding nuclear energy. This short post comments on India's statement in the summit.

India's Commitment to Net Zero and Role of Nuclear Energy

The statement noted India's commitment to Net Zero emissions by 2070. Towards this aim, the statement noted, India's has taken steps to increase the share of nuclear power capacity.  [The current share of nuclear power to total capacity is at about 1.6%, (6.7 GW- as on May 2023) as per this information of the Ministry of Power.] 

As per the statement, India aims to tiple nuclear power energy capacity by 2030 from 7.5GW presently, [that is, to 22.5 GW]. 

India's Views Towards Nuclear Power

The statement noted the Government of India's belief that nuclear power was "clean and environment-friendly" and is available 24x7 and was capable of providing energy security in the long term in a sustainable manner. 

The statement noted that it was "imperative" that the Indian nuclear power programme grew in order to ensure energy security and sustainable development.

India's Current Projects

The statement notes that India has recently added 700 MW Pressurized Heavy Water Reactors (PHWR), the Kakrapar Atomic Power Project – Unit 3 & 4 and nine more reactors are under construction. The statement also notes that the Government has accorded administrative approval for ten such reactors to be set up in fleet mode.

Recent Innovations

The statement also made mention about India's recent highlights regarding nuclear energy. It mentioned that India entered the important second stage of the three stage nuclear power programme through "Core Loading" which took place in India's first indigenous FBR, that is, Fast Breeder Reactor (500 MWe). 

The statement also made mention of  the Government's thought process that the Government is considering development of Small Modular Reactors and is in discussions with foreign companies for the expansion of India's nuclear programme. 

India's Commitment as regards Nuclear Energy

The statement records India's commitment "to full international civil nuclear cooperation" and "to  peaceful applications of nuclear technology, both in power and non-power sector, while ensuring the security of nuclear and radiological materials".

The statement concludes by stating:

"India has a robust nuclear safety culture and impeccable safety record. India will continue to support the [International Atomic Energy] Agency in its efforts to provide a robust, sustainable and visible global nuclear safety and security framework."

Comment

As regards the statement that India is in discussions with foreign companies regarding the expansion of India's nuclear programme, a recent newspaper report suggests that Rosatom, Russia's state atomic energy company, was in talks with India for development of Small Modular Reactors.

One more important aspect requires some explanation: the three stage nuclear process that India's statement refers to. India has substantial thorium resources and this programme is aimed to harness those resources.

Stage I: Use of PHWR- Pressurised Heavy Water Reactors and natural Uranium 238 (U-238), with traces of U-235, as the fisssile material. On fission, this would produce Plutonium- 239 (Pu-239) + energy.

Stage II: In stage II, Pu-239 will be used along with U-238 through Fast Breeder Reactors (FBR), which. apparently produces more nuclear fuel than it consumes. The recent core loading event at India's first indigenously built Prototype FBR in Kalpakkam (500 MWe) marks India's entry into the second phase. On fission, this would produce U-233 and more Pu-239.

Stage III: In the third stage, Pu-239 will be combined with Thorium-232 (which is in abundance in India) to produce energy + U-233.

This three stage programme was envisaged by Homi J Bhabha and presented in 1954 in the conference on "Development of Atomic Energy for Peaceful Purposes" and was later adopted by the Government in 1958.

India's statement in the Nuclear Summit can be accessed from here.

India's Planning to Attract Private Investment in Nuclear Sector to the Tune of US$ 26 Billion

In a major development, the print media reports that India is in talks with various private firms to attract investment to the tune of US$ 26 billion in the nuclear sector, in order to produce electricity from sources that do not produce carbon emissions. India plans to increase the percentage of contribution by non-fossil fuel sector in electricity generation. The current contribution of the nuclear sector and other sectors towards electricity generation is given below:

Installed Power Generation Capacity (2023)
Particulars	Installed Capacity (MW)	Percentage
Fossil Fuel	2,37,269	57%
Renewable Energy	1,73,619	41%
Nuclear Power	6,780	2%

 India now seeks to increase this 2%. News reports also suggest that the Government has been in talks with Reliance Industries, Tata Power, Adani Power and Vedanta to contribute about $ 5.30 billion each for investments in the nuclear sector. India is no exception: a substantial number of countries are looking at the nuclear option to meet their Net Zero commitments.

From a legal perspective, there might be a need to modify the present regulatory structure of nuclear energy in order to attract private investments (see, for instance, here). The increased focus on nuclear energy presents important opportunities, albeit long term, for law firms. Specialisation in nuclear power regulation, contracts relating to nuclear power plants, etc. will go a long way in catering to the potential market. Likewise, legal education in India could also focus on nuclear energy law, as this post notes.

"A Employee" and the Employee's Compensation Act, 1923

The Workmen's Compensation Act, 1923 was amended in 2009 through the Workmen's Compensation (Amendment) Act, 2009. One of the main purposes of the amendment was to make the said law applicable to all categories of employees and to bring about a gender neutral term. 

For that purpose, the Short Title to the Act was changed to "Employee's Compensation Act, 1923" instead of "Workmen's Compensation Act, 1923". The term "workman" and "workmen" were replaced with "employee" and "employees". To do so, Section 5 of the Workmen's Compensation (Amendment) Act, 2009 provided:

"5. Throughout the principal Act, for the words "workman" and "workmen", wherever they occur, the words "employee': and "employees" shall respectively be substituted, and such other consequential amendments as the rules of grammar may require shall also be made." (emphasis added).

In effect, Section 5 stated that wherever the term" workman" occured, it should be substituted with "employee" and corresponding grammatical changes would also be made. For instance, if the phrase "a workman relinquishes" it would have to be changed to "an employee relinquishes" although Section 5 of the the Workmen's Compensation (Amendment) Act, 2009 calls for substitution of the term "workman" with "employee".

Unfortunately, we see in the Employee's Compensation Act, 1923, as is uploaded in the India Code website that the consequential grammatical changes were not made although "workman" was substituted with "employee". Some examples of this situation is provided in the table below:

Section	Text of the Statute
2(1)(e)	“when the services of a [employee] are temporarily lent or let on hire”
2(1)(g)	“earning capacity of a [employee] in any employment”
2(1)(l)	“incapacitates a [employee] for all work which he was capable of performing”
2(1)(m)	“paid by the employer of a [employee]”

 The Act is replete with such errors in various other provisions. This requires correction.

India Postpones Bringing Into Effect the Digital Personal Data Protection Framework

 India enacted the Digital Personal Data Protection Act, 2023 ("DPDPA" or "Act") and the statute has been published in the Official Gazette. The Act along with the regulatory framework is yet to be brought to force. Section 1(2) of the Act reads:

"(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision."

The Central Government is yet to notify the date on which the provisions of the Act would come into force. 

From media reports (here and here), it initially appeared that the Government was making rules and the same would be published and the regulatory framework would be brought into effect by January 2024. However, media reports now (here and here) suggest that the Government has postponed its decision to make the Act and the regulatory framework effective to post-elections, which are generally held in the months of April/ May. 

European Data Protection Board's Coordinated Enforcement Framework

The EU EDPB (European Data Protection Board) came up with a Coordinated Enforcement Framework (CEF) in 2020 with the objective of facilitating joint actions among Supervisory Authorities under the EU General Data Protection Regulation, 2016.

The objective of the CEF was to facilitate joint actions among supervisory authorities in a coordinated manner. The legal basis of the CEF is contained in Article 61(1) read with Article 57(1)(g) of the GDPR. Article 61(1) reads:

"Supervisory authorities shall provide each other with relevant information and mutual assistance in order to implement and apply this Regulation in a consistent manner, and shall put in place measures for effective cooperation with one another. Mutual assistance shall cover, in particular, information requests and supervisory measures, such as requests to carry out prior authorisations and consultations, inspections and investigations."

Article 57(1)(g) states: 

"1. Without prejudice to other tasks set out under this Regulation, each supervisory authority shall on its territory: ...

(g) cooperate with, including sharing information and provide mutual assistance to, other supervisory authorities with a view to ensuring the consistency of application and enforcement of this Regulation;" 

Article 62, which deals with joint operations of supervisory authorities is also relevant for this purpose. Article 62(1) provides: "The supervisory authorities shall, where appropriate, conduct joint operations including joint investigations and joint enforcement measures in which members or staff of the supervisory authorities of other Member States are involved."

The role of EDPB is captured in Article 70(1)(u) of the GDPR, which states:

"1. The Board shall ensure the consistent application of this Regulation. To that end, the Board shall, on its own initiative or, where relevant, at the request of the Commission, in particular:...

(u) promote the cooperation and the effective bilateral and multilateral exchange of information and best practices between the supervisory authorities;"

These provisions form the legal basis for the CEF, which is basically a structure for coordinating recurring annual activities of the Supervisory Authorities under the GDPR through the EDPB. 

On the CEF, the EDPB Document states: "The objective of the CEF is to facilitate joint actions in the broad sense in a flexible but coordinated manner, ranging from joint awareness raising and information gathering to an enforcement sweep and joint investigations." (Para 5).

Why is the CEF important? The ultimate aim is compliance with GDPR and protection of rights and freedoms. The CEF reduces risks of compliance in wake of new technologies in data protection.

The CEF works in the following way:

In 2022, the EDPB picked the role of Data Protection Officers for its 2023 Study. Now EDPB has come up with the report on the designation and position of Data Protection Officers, which can be accessed from here. The 2022 study was on use of cloud-based services by the public sector.

For 2024, the topic has been chosen by the EDPB in October 2023, which relates to the implementation of the right of access by controllers.

India & Pakistan Exchange List of Nuclear Installations under 1988 Agreement

 It has been widely reported in the news media (see, for instance, here and here) that India and Pakistan have exchanged a list of nuclear installations further to a Press Release by the Ministry of External Affairs, Government of India. The Press Release notes that the exchange of lists was pursuant to an agreement which was signed on 31.12.1988, which came into force on 27.01.1991. Since then, the Release notes, both countries have exchanged lists 33 times (including the present one). This short post discusses the Agreement, known as India Pakistan Non-Attack Agreement, and the title of the Agreement is "Agreement between India and Pakistan on the Prohibition of Attack Against Nuclear Installations and Facilities". The Non-Attack Agreement was signed in Islamabad, Pakistan.

The Non-Attack Agreement is a short one consisting of three articles. The Preamble to the Agreement recognises both countries' "commitment to durable peace and the development of friendly and harmonious bilateral relations; conscious of the role of confidence building measures in promoting such bilateral relations based on mutual trust and goodwill..."

Article 1(ii) defines "nuclear installation or facility" as including "nuclear power and research reactors, fuel fabrication, uranium enrichment, iso-topes separation and reprocessing facilities as well as any other installations with fresh or irradiated nuclear fuel and materials in any form and establishments storing significant quantities of radio-active materials." Thus, the definition is comprehensive where fresh or irradiated nuclear fuel or material in any form is used.

Article 1(i) contains the "Non-Attack" clause and states: "Each party shall refrain from undertaking, encouraging or participating in, directly or indirectly, any action aimed at causing the destruction of, or damage to, any nuclear installation or facility in the other country."

Article 2 is the one which has led to parties exchanging the list of such installation/ facility. It obligates India and Pakistan to exchange lists of the latitude and longitude of nuclear installations/ facilities on the 1st January of each calendar year and includes changes in the latitude/ longitude, perhaps covering extensions/ contractions of such installations/ facilities. The language used is: "Each Contracting Party shall inform the other on 1st January of each calendar year of the latitude and longitude of its nuclear installations and facilities and whenever there is any change."

Article 3 concerns ratification. It states: "This Agreement is subject to ratification. It shall come into force with effect from the date on which the Instruments of Ratification are exchanged." 

At the end of the Agreement, there is an interpretation clause. Although the Agreement is purported to be in Urdu, Hindi and English, it provides that the English text would govern in case of disputes in interpretation. It states: "Done at Islamabad on this Thirty-first day of December 1988, in, two copies each in Urdu, Hindi and English, the English text being authentic in case of any difference or dispute of interpretation."

The Non-Attack Agreement can be downloaded from here.