The Future of Energy: India's Nuclear Ambitions
Kotak Insights | Date 14/09/2024
Have you ever wondered what the future of energy looks like? Well, buckle up because nuclear power is about to become the hottest topic on the energy scene.
Over the past year, nuclear energy has taken centre stage, captivating investors and experts as they realise its game-changing potential in powering the global economy.
Nuclear energy stands out as a superstar as the world tries to dial down its fossil fuel dependency and ramp up green solutions. Sure, utilizing wind and solar power is an excellent idea - when the wind blows and the sun shines. But for a round-the-clock, eco-friendly resource that meets our skyrocketing energy needs, nuclear is way to go.
With ambitious plans to expand its nuclear capacity, India is positioning itself at the forefront of this revolutionary energy shift.
Nuclear Capacity Uplift Plan
India is gearing up for a major expansion in its nuclear power sector with a strategic plan to boost its nuclear generation capacity by 70% over the next five years.
This ambitious initiative will elevate the country's capacity to 13.08 gigawatts (GW) by installing seven new reactors, as Union Minister Jitendra Singh announced.
The current fleet of 24 reactors will be complemented by new developments, including the 220-megawatt (MW) Bharat Small Modular Reactor (BSMR) and advancements in fast breeder reactors.
The focus is on leveraging indigenous technology, enhancing efficiency, and streamlining approval processes to strengthen energy security and foster scientific innovation.
This uplift plan reflects India’s commitment to integrating advanced nuclear technologies and improving national energy resilience.
3x Nuclear Power Capacity by 2031!
India’s nuclear power capacity is on track to triple by 2031-32 . From its current installed capacity of 8,180 MW, the country plans to expand to 22,480 MW. This significant increase is part of a broader strategy to achieve net-zero emissions by 2070.
Source: Bloomberg
21 reactors will drive the expansion at various stages of development, including 9 reactors with a combined capacity of 7,300 MW under construction and 12 reactors with a capacity of 8,000 MW in pre-project activities.
The Union Budget 2024 has earmarked funding for developing modular nuclear reactors and advancing research and development.
Singh noted that the Nuclear Power Corp. of India is in various stages of implementing 21 reactors with a combined capacity of 15,300 MW.
This includes nine reactors with a total capacity of 7,300 MW (including the prototype fast breeder reactor by Bharatiya Nabhikiya Vidhyut Nigam Limited, Bhavini), which is under construction, and 12 reactors with a capacity of 8,000 MW (including two 500 MW twin units).
Finance Minister Nirmala Sitharaman emphasised nuclear energy's role in the country's clean energy transition and highlighted ongoing collaborations with the private sector to drive innovation and growth in this sector.
India-Russia Nuclear Cooperation
India and Russia are expanding their nuclear cooperation with plans to construct 6 additional high-powered nuclear power plant units and small-scale nuclear plants in India. This collaboration, led by Russia’s state-run corporation ROSATOM, aims to boost India’s energy capacity and efficiency through innovations like closing the nuclear fuel cycle.
With India relying on Russia for 60-70% of its defence requirements, the two nations have a strong foundation for further collaboration.
Russia plays a key role in India’s nuclear energy sector, notably through the Kudankulam nuclear power plant, the largest in the country.
Located in Tamil Nadu, this plant currently operates with two VVER-1000 reactors and a total installed capacity of 2,000 MW. The plant is set to expand to six power units, reaching a capacity of 6,000 MW upon completion.
Power units No. 1 and No. 2 were commissioned in 2013 and 2016, respectively, and the ongoing expansion will further strengthen India’s nuclear power infrastructure.
In addition, Russia has proposed developing floating nuclear power plants in India to offer flexible energy solutions for coastal areas. Further cooperation includes building a new nuclear plant with VVER-1200 reactor units and advancing nuclear fusion technology.
Top Indian Nuclear Power Stocks to Watch Out for
With ambitious expansion plans driven by strategic collaborations, particularly with Russia, several Indian firms are set to play pivotal roles in this growth spurt.
State-owned Bharat Heavy Electricals Limited (BHEL) and Hyderabad-based Power Mech Projects Limited are leading this expansion. In May 2024, Power Mech clinched a substantial order worth Rs 563 crore from BHEL to construct new nuclear power plants, highlighting the scale of upcoming projects.
Additionally, companies like Walchandnagar Industries, L&T, HCC, NTPC, and MTAR Technologies are well-positioned to capitalise on this nuclear energy boom. These firms are expected to see significant gains as they contribute to and benefit from the increasing demand for advanced nuclear infrastructure.
Other promising players include Kirloskar Electric, AMIC Forgings, Konstelec Engineers, Patels Airtemp, and DP Wires.
Each of these companies stands to benefit from the growing investment and development in India’s nuclear energy sector, making them stocks to watch as the country ramps up its nuclear capabilities.
Wrapping It Up
India's nuclear power game is about to go to the next level, with ambitious plans to generate 25% of the country’s electricity from nuclear sources by 2050. We’re talking about a massive 1,094 GW of clean energy, propelling the nation into the global energy big leagues.
With nuclear energy set to be a major player in India’s decarbonisation journey, we can expect some serious action in this sector.
As the country gears up for its 100th year of independence in 2047, nuclear energy will play a critical role in powering the future.
But here’s the kicker: it’s not just about technology—it’s about innovation, regulation, and the global push for green energy.
Companies ready to ride this wave are sitting on a goldmine of opportunities.
As always, intelligent moves are key. Research your picks, assess the risks, and stay ahead in this high-stakes energy revolution.
Happy Learning!
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