From N-pariah to N-power…

Great news for the energy sector!

India finally has entered the “much coveted” nuclear club. Despite China’s efforts to scuttle the NSG clearance process, we pulled it through. Congratulations “Mr Singh and company!”

Being of the opinion that we need the nuclear deal to come through (hopefully the US Congress will oblige!) – not only for energy but also for international strategic geo-political reasons – I feel, at the very least, the development results in the following three fall outs:
- it allows the flow of nuclear fuel, helping the country's nuclear programme grow faster
- it will open up trade for global players to export reactors to India
- it will open up opportunities for export by Indian companies

Owing to India's nuclear isolation since 1998, capacity utilisation of approx. 4,000 MW power plants had come down from 90 per cent in 2001-02 to 54 per cent in 2007-08. The existing and new plants can now hopefully work at a load factor of up to 80 per cent given the assurance of fuel supplies.

With the market estimated at Rs 1,000 billion over the next two decades (Rs 60-80 million per MW x 16,000 MW estimated potential capacity) four of the world's biggest nuclear power station makers will be keen to supply reactors to India. These are France's Areva, US's General Electric, Toshiba's Westinghouse Electric and Russia's atomic energy agency Rosatom.

The development may also result in incremental business of some of the Indian companies that have already announced their intention to enter/expand in the nuclear technology arena. These include L&T, Reliance Power, state-owned NTPC, Jindal Power and the Tata Group.