There's more opportunity now for utilities and equipment makers in the nuclear energy space.
The immediate gainers from the Nuclear Suppliers Group (NSG) waiver are the public sector NTPC and equipment suppliers like BHEL and L&T. Private utilities are currently not allowed to add nuclear power capacity though that could change. NTPC plans to have around 2 GW of nuclear capacity by 2017 though analysts believe that the waiver could mean a pre-poning of these targets.
In fact, since the company has adequate cash resources, it may even scale up these targets. As it is, Nuclear Power Corporation of India (NPCI), which owns all the nuclear power plants operational in the country, suffers from an acute shortage of fuel shortage so that its plants have been operating at less than 40 per cent of their capacity in the last two months. With easier access to uranium, utilisation should increase to 90-95 per cent.
As capacity gets added, demand for equipment too should pick up both for generation as also transmission and distribution. Amongst the existing suppliers to nuclear power plants, BHEL and L&T should be able to bag more orders. BHEL, which has a tie-up with Siemens for nuclear technology, supplies 500 MW of equipment to NPCI and is looking to upgrade to 700-1500 MW.
L&T, apart from executing civil and electrical work at nuclear power plants is also capable of manufacturing critical nuclear equipment like the main nuclear reactor vessel. The company recently entered into a tie-up with Mitsubishi for super critical boilers that would be used for supplies to NPCI. It is possible that L&T will leverage its relationship with Mitsubishi for more business in the nuclear energy space. In fact, L&T could even export nuclear energy equipment in the future.
Other capital goods companies such as ABB which makes components for power projects and Crompton Greaves which completed a switchyard for a nuclear project for NPCI would also benefit from the new nuclear regime, which will see more nuclear fuel coming into the country and reactors becoming imported.
Even Alstom which already makes nuclear reactors and rotors along with supplying steam turbines should be able to cash in on the increasing demand in this area. The government is targetting nuclear power generation at around 52 GW by 2020; capacity currently is just 4,200 MW.
