Nuclear power a $40 bn opportunity

The Indian nuclear power market is estimated to touch $40 billion or Rs 20,000 crore by 2020, according to a study by an online research portal.

This mainly includes opportunities for power equipment manufacturers, uranium suppliers and forging companies in and outside India.

To gain a larger share in the pie, companies from Russia, France and Kazakhstan are among those discussing fuel and equipment supply with the government for upcoming nuclear power plants. India currently has 17 operating nuclear power reactors with a capacity of 4120 mw. It plans to increase this to 10,000 mw by 2012.

J K Ghai, director-finance, Nuclear Power Corp of India (NPCIL), had told DNA Money after the signing of the nuclear agreement that the country can comfortably reach a capacity of 10,000 mw with indigenous mined uranium. But to go beyond that, foreign collaboration had to be sought.

Nuclear power currently accounts for only 2.3% of India’s total electricity generation. The government is planning to develop nuclear power in order to address its power scarcity issues, reduce its dependency on imported oil and coal.

“The country has set a target of reaching about 5% nuclear contribution to the country’s total power amounting to 20GW by 2020 and 63GW contributing to about 35% by 2030. The Indo-US nuclear deal makes such a high target feasible,” the report said.

The report talks about major opportunities opening up for companies such as Larsen
& Toubro, Bhel, Bharat Forge, Punj Lloyd and NTPC.

At present, nuclear power production is under government control and only NPCIL can set up and run nuclear power plants. Indian companies can only hold minority stakes in joint ventures with NPCIL. However, industry experts believe the law is likely to be amended soon to allow the entry of private players.

The Economic Survey tabled in the Parliament by finance minister Pranab Mukherjee said, “The Atomic Energy Act needs to be amended to permit private corporate investment in nuclear power, subject to regulation by the Atomic Energy Regulatory Board and the Atomic Energy Commission.” It also suggested framing the rules for private and foreign entry into the sector, recommending a 49% cap on FDI.

This swift expansion in the Indian nuclear power market comes in the wake of the September 2008 nuclear co-operation agreement with the US and subsequent tie-ups with other countries for fuel and technology supply.

On February 11, 2009, the Department of Atomic Energy signed a $700 million contract with Russia’s TVEL for supply of 2,000 tonnes of uranium pellets.
TVEL also fabricates and delivers fuel for the Kudankulam nuclear power plant being set up in co-operation with Russia.

Earlier, the Nuclear Fuel Complex in Hyderabad had placed an order for 300 tonnes of uranium ore concentrate with France-based Areva.