It might be too early to bet on India's nuclear power sector, caution experts

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Subscribe to enjoy similar stories. MUMBAI : There's a real buzz on the Street about nuclear power as investors are beginning to look beyond renewables for carbon-free energy sources. In the US, Microsoft Corp.

entered into a 20-year power purchase agreement (PPA) with Constellation Energy Corp. Llc on 20 September to procure electricity for its artificial intelligence data centres, which must operate 24/7 365. Constellation Energy, whose generation fleet includes nuclear, hydro, wind and solar facilities, is the largest retail producer and supplier of carbon-free energy in the US.

It will reopen its 835MW nuclear power plant in Pennsylvania for Microsoft by 2028. While Constellation has returned 33%, other nuclear-sector stocks have returned 15% on average since the agreement was announced. The S&P 500 Energy Index has returned around 5% during the same period.

Unlike the US, India doesn't have a single listed pure-play nuclear power company yet. And no major listed company is looking to tap into the nuclear sector for its energy requirements either. Even the government-owned Nuclear Power Corporation of India Ltd (NPCIL) is unlisted, while NTPC Ltd is still heavily focused on renewables.

Besides, experts are divided, with many cautioning that India's nascent nuclear power segment is riddled with executional and social complexities. So, what should investors do if they seek early exposure to India's nuclear capabilities? India’s Atomic Energy Act of 1962 vests complete control of the nuclear power value chain to the government. From the procurement of nuclear fuel and raw uranium to designing and operating nuclear plants, everything is handled by NPCIL, India’s one-stop nuclear shop.