Nuclear Energy - A new kid in the block - opportunities and threats
Union budget 2025-26, has kept a budgetary provision of Rs 20,000 crore towards nuclear energy.
So why a new love affair with nuclear power and whether our romance with Renewables has come to an end ?
No not at all.
India continues to import 85% of its crude requirement. India is very much concerned about its energy security as it makes all out efforts for Atma Nirbhar Bharat to reduce import dependence.
So, we have in our energy basket traditional Coal, then CNG, and recently trying to diversify its energy basket in to Ethanol , Methanol, Renewables like Wind , Solar, Hydro, CB, Green Hydrogen etc.
we are trying to enhance our energy basket to include nuclear power with our available natural resources like Uranium 235 and Thorium. Nuclear power is nothing new to us.We already have nuclear power plants. but it is too low @ 3%.
So , there is no road blocks on growth of renewable energy- our renewable energy mix of solar wind hydro would grow at its own pace. Nothing can out pace our renewable energy plan across the world. Afterall renewable is renewable - inexhaustible source of energy at low cost and less complexity and zero emissions.
Is nuclear energy renewable ?
No it is not , though it has zero carbon emission, it has nuclear waste though to deal with. Uranium and thorium.mines are exhaustible like Coal.
India’s Nuclear science
Nuclear power for civil use is well established in India and has been a priority since independence in 1947. In 1948 the Atomic Energy Act was passed, and the Atomic energy Commission set up. Under it, the Department of Atomic Energy was created in 1954, when the country’s 3-stage plan for establishing nuclear power was first outlined.
(1) Stag1 is to use Pressurised Heavy-Water Reactors (PHWR) fuelled by natural uranium to generate electricity and produce plutonium as a by-product.
(2) Stage 2 plans to use fast breeder reactors burning the plutonium to breed U-233 from thorium.
(3) .Stage 3 is to make the process no.2 scalable and produce a surplus of fissile material i.e U-233 from Thorium (we have plenty of Thorium in our country - supposed to be the largest in the world).
U233 from thorium can be used as input for nuclear weapon and nuclear power.
Nuclear politics - NPT
The Nuclear Non-Proliferation Treaty (NPT) was initiated by the United States, the United Kingdom, and the Soviet Union in 1968 for disarmament and to limit spread of nuclear power as weapons , but could be used for peaceful purposes. China and France signed the treaty in 1992.
The NPT recognizes these five countries as nuclear-weapon states (NWS).
It Prohibits the transfer of nuclear weapons.
Nuclear-weapon states are prohibited from transferring nuclear weapons to non-nuclear-weapon states.
It Prohibits the acquisition of nuclear weapons
Non-nuclear-weapon states are prohibited from receiving, developing, or manufacturing nuclear weapons. So as per NPT , india was prohibited to develop and manufacture nuclear weapons. But india wanted to produce nuclear weapons as deterrent to China and Pakistan. So the logical thing to do was not to sign NPT.
India never signed the treaty as it felt discrimination and irrespective of political parties at center, it maintained its stand consistently till date considering nuclear threats from Pakistan and China.
In 1974, India did its first nuclear test near Pokhran.
Union Budget FY26 has aimed to launch Nuclear Energy Mission to focusing on R&D of Small Modular Reactors (SMRs), with aim of making at least 5 indigenously developed SMRs, that shall also be known as Bharat Small Reactors (BSRs) operational by 2033. Said initiative aims to enhance domestic nuclear capabilities, promote private sector participation, and accelerate the deployment of advanced nuclear technologies such as Small Modular Reactors (SMRs). As of January 30, 2025, India’s nuclear capacity is 8180 MW.
Now Very recently during Mody’s visit to USA, India signed a treaty to establish nuclear power plants in India. So are they violating NPT ??
No not at all. it is for peaceful purpose. So no issue. CNN called this as a masterstroke from Mody’s politics. This will only hasten our nuclear energy plans with advanced technology which USA has been using since last 40 years.
With this Geo political background, let us discuss our business and if at all there are investment opportunities.
USA is an oil rich country. still they have 20% energy mix from nuclear power , so also all developed nations when compared with India’s share of 3% nuclear energy in its energy basket.
Whether India has the required minerals such as Uranium.?
India once upon a time used to import uranium to run its nuclear power plant.
But today we have a new hope with a lot of new Uranium thorium deposits in Andra and karnatak & river basin and kerala sands apart from Jharkhand , Bihar , UP, Rajasthan.
Please read the attached wiki to know about our current findings on its uranium thorium deposits in India. it is s big story by itself.
While , we would require another post on technical aspects of nuclear fission vs nuclear fusion, how nuclear power is produced from uranium 235, uranium 233, Thorium etc.
But let us quickly find out if at all there is an investment opportunity…
Nuclear power plants is very complex , though the system and the principle is very simple. During the nuclear fission process a lot of heat is generated in the system.
This heat is used to heat water to produce steam which in turn would pass through a turbine which would move to generate electricity.
now the second part of the process is similar to thermal power plants. The only difference is coal is used to heat water to produce steam where as in a nuclear reactor heat is produced to heat water.
Who said it is the end of turbines with coal being phased out from thermal power plants ???
Turbines are back in to action…you need turbines with different capacities for Nuclear power plants
The 2nd most important point is it requires a lot of pumps to cool the process which makes the reactor terribly hot by nuclear fission. So sc lot of pump manufacturers would thrive.
Apart from this there are lot of other precision parts and components on which many MSME industries could grow. A few linkages are given to understand on nuclear energy
When USA signed treaty with India for nuclear plants , all stocks fell by 6%. Market is Mr market. Market feels that these companies will be deprived of business as usa would bring itd own technology. People forget that there may be s possibility that USA would like to make most components at a cheaper rate. so industry could grow in the long run once nuclear Eco-structure evolves.
It is too early to enter in to any standalone nuclear power related stocks.
However , it may be a good idea to stick to your favourite stocks which you may be currently holding in infrastructure , power , capital goods stocks which are sitting with a strong order book on current business.
A few nuclear stocks of interest is given at the end of this post.
There companies like Tata and JSW have already declared massive investments.in nuclear energy and other pvt companies may jump.in to this new business.
Threats :
(1) Addition of Nuclear power plants have long gestation period. is a long term Goal of the Govt. it is too early to invest in any nuclear energy stocks
(2) There could be protests from villages / towns against nuclear plants in their vicinity leading to delays.
(3) Nuclear waste disposal is a concern …However over a period of time , a high standard safety system has been established.
(4) While the intent of the govt may be good , its frequent policy changes could affect implementation of nuclear program.
More on threats and opportunities can be found in links below.
Dicl ; It is only for educational.purpose…Not a recommendation to sell or buy any stocks related to nuclear energy.
I may have investments in some known power and capital goods, infrastructure sector with existing business , but may have future potential to cater to nuclear power. These are my old holdings. No new additions.
https://www.manufacturingtodayindia.com/tata-power-sets-sights-on-smrs-plans-1b-asset-sale
