Two government sources have informed Reuters that India is encouraging private companies to invest in the nuclear energy sector. The government will invite private companies to invest so that the electricity generation from sources that do not emit carbon dioxide can be increased.
But why is the government doing this and which companies will invest in India’s nuclear energy sector? We will also try to understand what’s in it for investors interested in the energy sector.
What’s Happening?
The Indian government has sought a $26 billion investment from private companies in the nuclear energy sector. This marks the first time India has sought private investment in the nuclear energy sector.
Nuclear energy is a clean energy source that does not emit carbon, but currently, its contribution to total electricity production in India is only 2%.
Currently, India derives 42% of its energy from non-fossil fuel sources, and India aims to increase its established electricity generation capacity from non-fossil fuel sources from 42% to 50% by 2030, with private funding potentially assisting in achieving this goal.
Why is this Investment Needed?
According to Money Control, the aim of this step is to create a new nuclear energy capacity of 11,000 megawatts by 2040 and to increase electricity production from non-fossil fuel sources to 50% by 2030.
India is one of the fastest-growing economies in the world, and its demand for electricity is consistently increasing. Nuclear energy is a clean and reliable energy source that can help meet this growing demand. Additionally, nuclear energy can play a significant role in combating climate change.
This investment can help achieve energy goals because private companies in India are not allowed to establish nuclear power plants, but they have been given the opportunity to participate in activities such as component supply, equipment, and reactors.
Which Companies Will Invest?
The Indian government is encouraging private investment in the nuclear energy sector, and now major industries are being invited. According to government sources, the government is in talks with leading companies such as Reliance Industries, Tata Power, Adani Power, and Vedanta Limited, each expected to invest around Rs 44,000 crores.
According to sources, over the past year, the federal Department of Atomic Energy and state-run Nuclear Power Corp of India Ltd (NPCIL) has held several discussions with these private companies on this matter.
What’s in it for Investors?
In the recently announced interim budget, Finance Minister Nirmala Sitharaman increased the allocation for the green hydrogen sector by 102%, while doubling the allocation for solar energy. Additionally, Rs 600 crore has been allocated for the National Green Hydrogen Mission, compared to last year’s Rs 297 crore. Initiatives such as solar rooftop have also been initiated.
The government is giving a considerable boost to green energy, which is why the energy sector has been giving better returns to investors in recent times, as can be understood from the graph below.
Furthermore, there is hope that private investment in the nuclear energy sector will further boost the sector. Therefore, investors can consider tracking the energy sector.
What’s Next?
Talking about the future of energy, according to PIB, Union Minister of State (Independent Charge) Science & Technology Dr Jitendra Singh has stated that under the Panchamrit action plan, India has set some targets, which are as follows:
- Reach 500 gigawatts of non-fossil fuel capacity by 2030.
- By 2030, fulfill at least 50% of our energy requirements from renewable energy.
- Reduce total estimated carbon emissions by 1 billion tons by 2030.
- Reduce carbon intensity to less than 45% by 2030.
- Achieve net-zero emissions by 2070.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
