India's Nuclear Energy Sector: Opportunities and Growth Prospects

Vinay Khanduri, NBP’s Head of India sheds light on the burgeoning Indian nuclear energy market and its immense potential for growth and investment.

Nuclear energy plays a pivotal role in India's energy landscape, contributing approximately 3% of the country's total electricity generation. India has set ambitious goals, aiming to generate 9% of its electricity from nuclear sources by 2047. In the financial year 2022-2023, India's total electricity generation reached 1617.8 billion units (BU). A substantial 75% of this generation is attributed to coal and other fossil fuels, with renewables, including solar, wind, and hydropower, accounting for 22.3%. Nuclear energy presently contributes 2.8% to the energy mix.

The intermittent and variable nature of renewables, coupled with their low plant load factors, challenges grid reliability and increases system costs. With the gradual phase-out of coal plants in India, it becomes imperative to bolster the system capacity with clean base load capacity. This necessitates an expansion of nuclear capacity from the current 3% to 9-10% over the coming years.

India's nuclear market currently boasts 23 reactors with a combined capacity of 7.48 GWe. Additionally, 12 reactors with 9.4 GWe capacity are under construction, eight reactors with 5.6 GWe capacity have received financial sanction, and 18 reactors with 24 GWe capacity have been accorded in-principle approval from the Indian government. This robust pipeline amounts to a cumulative capacity of 46.48 GWe, establishing India as a prospective big nuclear market for investment.

According to Mr. Vinay, the expansive nuclear landscape presents a myriad of business opportunities across the 23 reactor units at seven sites. These opportunities encompass operational and maintenance contracts, annual contracts, equipment supplies, quality assurance, automation, artificial intelligence, waste management, and civil maintenance. Furthermore, there is a cumulative business potential of USD 30.8 billion throughout the project cycle for the 20 nuclear projects currently under construction and those with financial sanctions, with an anticipated completion date by 2031. An additional cumulative business potential of USD 80.6 billion is projected across the project cycle for the 18 nuclear projects which have been accorded in-principle approval by the Indian government.

The demand for a reliable, clean energy source in India is driven by several factors, including the nation's ascent to the third-largest economy by 2027, the target of reducing carbon intensity by 45% by 2030, the aim to achieve developed country status by 2047, and the corresponding rise in per capita energy consumption. Population growth and increasing energy needs reinforce the imperative for clean energy solutions.

A study conducted by the Vivekananda International Foundation (VIF)- a premier Indian think tank and the Indian Institute of Technology (IIT) Bombay emphasized that a nuclear-dominated energy mix would be more cost-effective than a renewable-dominated one. The latter would incur a 30% higher electricity cost and encounter land constraints.

Small modular reactors (SMRs) alongside large reactors present a viable option to replace India's 205 GW coal-based capacity. SMRs alone hold a potential business value of INR 20 trillion (USD 250 billion), assuming a 50% site suitability factor. Moreover, SMRs and advanced reactors find applications in clean hydrogen generation, desalination, process heat, district cooling, and more, with a gross projected business potential of approximately USD 245 billion in India.

Mr. Vinay has concluded that the opportunity pipeline in India's nuclear industry comprises a total business value of USD 110 billion, encompassing operational and maintenance services, lifecycle management, and supply chain management. Additionally, the evolving market offers a gross projection of USD 575 billion for power applications and a considered projection of USD 245 billion for non-electric applications.

Key organizations shaping India's nuclear industry landscape include NITI Aayog, the Department of Atomic Energy (the official event partner of India Nuclear Business Platform 2023), the Atomic Energy Commission, the Atomic Energy Regulatory Board, Nuclear Power Corporation of India Ltd. (NPCIL), National Thermal Power Corporation Ltd., Bharat Heavy Electricals Ltd. (BHEL), Larsen and Toubro (L&T), Kirloskar Brothers Ltd., and the Nuclear Fuel Complex, among others. These entities collectively contribute to India's strategic transition towards clean energy.

The 4th edition of India Nuclear Business Platform (INBP) will take place in Mumbai this 10-11 October. This industry meeting will feature all they officials and players across the Indian nuclear supply chain. Official event partners of this meeting are India’s Department of Atomic Energy and NTPC. More information on this meeting is available here.