India, on the back of rapid economic growth and a steadily rising population is one of the largest consumers of electricity in the world. That said, supply still lags far behind potential demand, with 25% of Indian citizens still living without reliable access to electricity. To bridge that gap, the Indian government is one of the few in the world that's actively seeking to boost production of nuclear energy. However, if India ever hopes to achieve its nuclear power goals, there's a strong case for private involvement. [1]
Through most of its history, the Indian electricity industry has been dominated by government monopolies. Finally, through the electricity Act of 2003, the Government invited private developers to enter the power generation sector. This has led a flurry of commercial activity, involving both Indian business houses and multinationals. [2]
The progress has been so good that it has far outpaced the development of India's transmission and distribution industries. This lagging-behind of transmission and distribution infrastructure might be the biggest problem in India's electricity sector. In fact this deficit of transmission and distribution infrastructure even led to a major grid collapse that left over 650 million Indian without electricity in the summer of 2012. [3]
This is testament to the fact that the private sector needs to be involved for the speedy and efficient development of any industry in India. In that respect, Nuclear power is no different from coal, gas, wind or solar.
There are any ways in which private companies can get involved in the nuclear industry. The most immediately obvious ways in which private companies can get involved is in the 1) developing and owning power plants and 2) mining of raw material. However, there are also other opportunities for companies to get involved in: 1) Construction of power plants, 2) Logistics of raw material and waste and 3) Manufacturing of Parts, among others.
While no Indian companies are currently involved in ownership of nuclear power plants, some companies already have a foothold in other auxiliary market functions like construction of power plants and manufacturing parts.
For example, the Indian construction giant L&T is already involved in government contracts related to nuclear power plants, and machine-parts manufacturer MTAR has supplied several crucial parts and machines for government owner power plants. This crop of nuclear companies in India is set to grow rapidly, as private players wake up to the vast potential in the industry. [4,5]
In fact, the government recently announced that it intends to allow private companies to get involved in nuclear power, which has led some local power developers like GMR Energy to initiate talks with international companies General Electric and Alstom. [6,7]
While the Indian government has not yet drawn out a clear set of rules or a road map for closer involvement of private players in the nuclear industry, looking at the way it has handed over the responsibility of planning and setting up large coal and gas based power plants, it seems inevitable that the nuclear power sector will follow suit. Another key catalyst in this process will likely be environmental concerns, as the Indian Government witnesses the environmental calamities faced by its neighbor China. it will have to eventually give in to the realization that private sector involvement in nuclear power is a dire need.
© Anirudh Tikkavarapu. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] H. Pidd, "India Power Outage Hits 350M People," The Guardian, 30 Jul 12.
[2] A. Singh, "Policy Developments for Private Investment in the Indian Power Sector," Asian Development Bank Institute, Discussion Paper No. 64, 26 April 2007.
[3] H. Pidd, "India Blackouts Leave 700 Million without Power," The Guardian, 31 Jul 12.
[4] K. Raman, "L&T to Focus on Nuclear, Defence, Aerospace Sectors," The Hindu Business Line, 16 Feb. 04.
[5] V. Sinha and J. Sayed, "Blackstone Eyes 30% in Nuclear Tech Firm MTAR," The Economic Times, 7 Sep 07.
[6] S. Sharma, "India May Open Nuclear Power to Private Firms," Livemint, 12 Sep 08.
[7] R. Murthy, "India Throws Open a $100Bn Nuclear Bazaar," Asia TImes, 11 Sep 08.