India retains 15.5% equity return norm for nuclear power plants till FY28

The Department of Atomic Energy (DAE) has finalised tariff norms for nuclear power projects for the five years beginning FY23. The return on equity remains fixed at 15.5 per cent, in line with norms for thermal plants.

Plants commissioned before April 1, 2022, will follow a constant 15.5 per cent RoE. New projects can choose either the same fixed return or a variable RoE over the Power Purchase Agreement period. In the variable model, RoE can rise or fall over time, but must match the present value of the constant return.

Future PHWRs will follow a 70:30 debt-equity ratio. Excess equity over 30 per cent will be treated as debt. For other technologies, funding ratios will be decided on a case-by-case basis.

The norms specify no stabilisation period. Capacity approved by the Atomic Energy Commission will be used for tariff setting. Plant load factors range from 68.5 to 80 per cent.

Fuel charges for PHWRs will be fixed so their present value over 15 years equals half the initial fuel charge, discounted at 12 per cent.

India has 8.8 GW of nuclear capacity, contributing about 3 per cent of total power generation. Another 6,600 MW is under construction, and 7,000 MW is in early stages. The government targets 100 GW by 2047.

The Atomic Energy Regulatory Board (AERB) recently cleared Units 3 and 4 of the Kakrapar Atomic Power Station (KAPS-3 and KAPS-4) for operation. These are India’s first 700 MWe indigenous PHWRs.