L&T eyes global nuclear supply chain as demand for clean energy rises

The company eyes sharp international growth as nuclear demand accelerates

Construction major L&T is gearing up to expand its footprint in the global nuclear supply chain, a senior company official has said, while calling for amendments to key legislations on the domestic front to pave the way for the entry of private players and foreign capital necessary for capacity enhancement.

 

Even as 80 per cent of its nuclear business remains domestic, the company expects international opportunities to rise sharply over the next few years as countries revive stalled nuclear expansion plans and push for small modular reactors (SMRs).

 

“Currently, our international engagement is primarily in the fusion reactor being built in France. We are exploring opportunities to be the international supply chain partner for nuclear island and operating plant services. Dialogue is progressing well,” Anil Parab, whole-time director & senior executive vice-president, L&T (Heavy Engineering & CE & IPDD), told Business Standard in an interaction.

 

“In the time to come, we expect a large opportunity in international markets in the US, the EU, the UK and Asia,” he said.

 

Global nuclear power generation capacity is expected to rise from 378 gigawatts (gw) to 575 gw by 2040, representing an increase in nuclear energy’s share of the global electricity mix from around 9 per cent to 12 per cent.

 

On the home front, Parab said that private sector participation still faces structural challenges. He advocated amendments to the Atomic Energy Act and Nuclear Liability Act, expansion of regulatory capacity, standardisation of designs, and building of a deeper, nuclear-trained talent pool for the sector that requires “highest safety standards”.

 

He said that the amendment of the Atomic Energy Act will pave the way for the entry of private players and foreign direct investment ownership, attracting large funds necessary for capacity enhancement.

 

Prime Minister Narendra Modi recently announced that the country will soon open its nuclear energy sector to private companies, ending a six-decade-long state monopoly.

 

Parab said that while most nuclear projects globally saw limited progress over the last 10-15 years, first because of the Fukushima disaster and later due to the Covid-19 pandemic, momentum may now return as more than 32 countries aim to expand their nuclear power generation capacity threefold in the next two decades.

 

With grid stability becoming a challenge in India and the extraordinary energy demand from hyper-scale data centres and artificial intelligence (AI), compact footprints and clean energy sources with 24/7 availability are needed, according to Parab.

 

Domestically, L&T expects strong growth as India moves to expand nuclear capacity from 8.9 gw to 100 gw by 2047 under the Viksit Bharat programme. The company views this shift as central to maintaining grid stability, meeting its net-zero 2070 target, and decarbonising hard-to-abate sectors such as steel, cement, and refining.

 

Parab said SMRs and micro modular reactors (MMRs) are likely to play a crucial role in new demand pockets such as data centres. India is pushing forward on indigenous SMR design, backed by a ~20,000 crore research allocation in the last Union Budget.

 

L&T is working closely with the Department of Atomic Energy (DAE), Bhabha Atomic Research Centre (BARC), and Nuclear Power Corporation of India (NPCIL) on this programme while also partnering with global players, including Holtec, EDF, Westinghouse, TerraPower, and Clean Core Thorium Energy, as SMRs are currently only operating at two places, and the modern Gen III+ SMR is either in the design or licensing, or construction phase, not in operation, according to Parab.

 

He said L&T has the capacity to meet the emerging demand. The company’s Hazira plant, originally built in 1980s targeting 10 gw of nuclear capacity by 2,000, has since been expanded nearly fivefold.

 

“The current nuclear program hardly uses 15 per cent of our capacity. We have all the required investments. We are one of the largest nuclear-trained talent pools in the world,” he said.

 

L&T is a market leader in manufacturing, construction, and design of nuclear island critical equipment including steam generators, reactors and safety heat exchangers. It also manufactures special steel, heavy forgings and the nuclear steam supply pipeline. Through its joint venture (JV) partners, it has capabilities for plant engineering and turbine generator manufacturing. It is also a major supplier for India’s fast breeder reactor programme, with the first unit expected to be commissioned by September 2026.

 

While nuclear power contributes modestly to L&T’s overall business today, the company expects a steep ramp-up. Revenues from its nuclear manufacturing and construction verticals are projected to grow 3-5 times over the next five years, driven by domestic expansion and new global opportunities.

 

International business, Parab said, could increase from the current 20 per cent to 40 per cent of the nuclear portfolio over this period.

 

“Although 32 countries have planned to expand their nuclear energy capacity by three times, in the international market, the existing supply chain will be used first. Post-pandemic, all countries want to be self-reliant. Only when the existing supply chains are overloaded will we get a chance,” he added.