SHANTI Act: Industry wants competitive bidding for nuclear power tariff

The enactment of SHANTI Act, allowing private sector entry into nuclear power generation, has also brought focus on regulatory authority to decide tariff electricity generated by private nuclear plants.

The industry has been seeking a separate authority to regulate the nuclear power tariff and that the tariff discovery should be through competitive bidding.

The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 says that the Central Government shall fix the tariff for supply of electricity from nuclear power plants. Tariffs of nuclear power generated by existing plants are decided by the Department of Atomic Energy (DAE) along with the Central Electricity Authority.

"Evidently, the fixing of tariff for nuclear power plants is squarely within the domain of DAE, unless DAE elects to delegate that power to AERB by Rules to be notified. From the perspective of private investors, this may be a problem of perception for robustness of tariff determination mechanism and for components of tariff," says Amit Kapur, Partner at JSA, Advocates & Solicitors.

He further says that at the very least, the principles of Section 61 of the Electricity Act, 2003 ought to have been extended to provide for a balance between affordability for consumer and viability for investors, as also promoting safety and efficiency.

Tariffs for all other power generators fall under the jurisdiction of the Central Electricity Regulatory Commission (CERC). However, the Appellate Tribunal for Electricity recently ruled that the CERC cannot regulate tariffs or adjudicate disputes related to atomic power stations.

The panel responsible for outlining India’s 100 GW nuclear capacity roadmap recommended separating tariff regulation from the government with private sector entry.

There has been growing demand from the industry to have a freedom in deciding the tariff for sale of nuclear power. In case of submissions made to the NPCIL Request for Proposal for the Bharat Small Reactors (BSR), majority of the players, saying the developer should have the freedom to sale/use/supply of electricity generated as per the Electricity Act 2003 and no approval by Department of Atomic Energy (DAE) on this aspect.

“Since investment is made by the developer, including associated risk. Hence, users should have freedom on the use of or right on electricity without any need of DAE to determine tariff,” submitted the Adani Energy Solution Limited.

Seeking clarification on the role of DAE, Aditya Birla Renewables said: “Post our captive consumption, we will sell the surplus power (if any) through Power Exchange, given that in an Exchange, tariff is determined through price discovery mechanism, what role the DAE would play?”