Atomic Energy of Canada in Talks to Develop Nuclear Power Plants in India

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Canadian nuclear power engineering and equipment manufacturer Atomic Energy of Canada Limited (AECL) (Mississauga, Ontario), is exploring the possibility of partnering with Indian companies to build nuclear power generating facilities in the country. Discussions are reportedly under way with three private sector companies to identify opportunities to construct nuclear power plants based on AECL's Canada Deuterium Uranium (CANDU) technology. While AECL has refused to divulge the names of the domestic private sector firms, there are reports of Reliance Power Limited's (BSE:532939) (Mumbai) involvement in discussions with AECL. AECL's CANDU reactors account for nearly 16% of energy generated in Canada.

India has a fairly closed-door nuclear policy that does not allow domestic private sector players and international energy firms to set up and operate nuclear power generating plants in the country. However, the policy allows foreign companies to work as technology partners. French, Russian, U.S., Chinese and Canadian nuclear power companies are participating or planning to participate in major nuclear power plant construction programs in India. Nuclear power generation in the country is fully controlled by the central government through Nuclear Power Corporation of India Limited (NPCIL) (Mumbai). Private sector players and international energy firms have been gearing up following recent reports of the Indian government's proposal to make amendments in the policy and allowing private sector participation.

Industry observers have indicated that the Indian government will have to spend considerable time to put in place a strong and robust regulatory and legal framework before allowing private sector participation in the country's nuclear power sector. Experts indicate that, given this background, private sector partnerships in nuclear power generation seem unlikely before 2019. GMR Energy Limited (Bangalore, Karnataka), Jindal Steel & Power Limited (BSE:532286) (New Delhi), Tata Power Company Limited (BSE:500400) (Mumbai), NTPC Limited (BSE:532555) (New Delhi), and Vedanta Resources plc (LSE:VED) (London, United Kingdom) have expressed interest in becoming part of India's nuclear power generation sector.

Private sector investments are also critical for the expansion of this sector in the future. NPCIL, which has a cash surplus of nearly $2.6 billion, will be able to construct only about 10,000 MW of additional nuclear power generating capacity.

Presently, India's installed nuclear power capacity is about 4,120 MW. India has embarked on an ambitious three-stage nuclear power development program, targeting 40,000 MW of additional power generating capacity by 2020. Recently, Indian Prime Minister Dr. Manmohan Singh expressed optimism that if India's three-pronged nuclear power program was managed well, the country's nuclear power generating capacity would reach 470,000 MW by 2050. Experts indicate that it will be a Herculean task for NPCIL to single-handedly meet these targets.

According to the latest reports, India has deferred the decision to allow private sector participation in the domestic nuclear power sector. Government officials have stated that an alternate strategy to increase investments in this sector has been finalized. The new strategy seeks to allow investments from core public sector companies in nuclear power plants in the country. These companies can develop nuclear power plants as joint ventures with NPCIL. The government and NPCIL have already initiated talks with National Aluminium Company Limited (BSE:532234) (Bhubaneswar, Orissa), Indian Oil Corporation Limited (BSE:530965) (Mumbai), and NTPC. The public sector companies are expected to hold minority stakes in the joint venture. The Atomic Energy Act of 1962 states that the central government should hold a minimum stake of 51% in any nuclear power generating facility in the country.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.