India Energy Investing

Jeff Siegel

Written By Jeff Siegel

Posted December 19, 2011

In just a few weeks, India’s newest nuclear power plant will become operational.

Built by the Russians, who are eager to make a few bucks off their nuclear know-how, the reactor will help alleviate the massive electricity shortages that have inhibited economic growth.

By next summer, another Russian-made nuclear power plant will also go online in India. (Two more after that were expected, but a deal for 42 Russian fighter jets took priority.)

Some reports blame the anti-nuclear folks for the final nuclear deal going bad. They’ve been protesting over safety issues throughout the year.

But I don’t think that matters…

Just like the last two nuclear deals, the next two will get done.

Because let’s face it: India is desperate for power. And not to sound uncaring, but I’ve never seen much proof that public safety is a big concern for the Indian government.

The bottom line is India expects nuclear to provide 25 percent of its power by 2050.

And it won’t just be the Russians making money on this…

3 Nuclear Ambitions

There are hundreds of companies trying to get a piece of India’s nuclear action.

But there are three in particular that have been very aggressive over the past year…

  • Reliance Power (BOM: 532939) boasts the largest power generation portfolio under development in India’s private sector, and it’s currently reported to be in discussions with GE-Hitachi and Westinghouse, as it looks like the Indian government is going to allow other non-Indian companies to be involved in the country’s nuclear power development.

  • Tata Power (BOM: 500400) – Last year, in anticipation of India’s nuclear direction, the company signed an agreement with GE-Hitachi to explore new projects in India.

  • Alstom (BOM: 532309)(PINKSHEETS:AOMFF) – The company is part of a three-way joint venture involving the Nuclear Power Corporation of India and Bharat Heavy Electricals to make turbines for future nuclear projects. Today, one out of three nuclear plants across the globe runs on Alstom turbines.

All three of these companies are major players with significant influence on a global scale.

Collectively, they provide thousands upon thousands of jobs and generate billions in revenue. And all three are going to make a ton of dough from India’s nuclear power development.

But it won’t stop there.

All You Can Eat

While India’s nuclear power agenda is aggressive, so is its solar power agenda.

India is actively integrating solar into its mix with the goal of having 20 gigawatts of installed solar capacity by 2020. To give you an idea of how much growth potential this represents, India has about 700 megawatts installed today.

This, my friends, is another huge opportunity for energy investors looking to play India’s growth.

Interestingly, the same three companies that are actively working the nuclear angle are also actively working the solar angle.

Alstom, through the purchase of Areva T&D (as part of a consortium with Schneider Electric), is now providing substations for solar power plants in India.

Tata Power just announced it has completed the financing for a new 25 MW solar project in India that already has a power purchase agreement in place.

And just a few weeks ago, the Asian Development Bank handed Reliance Power a $48 million check for a 40 MW solar project in Rajasthan. That project is expected to be completed next year.

While European solar subsidies are being phased out and a glut of solar equipment is not being depleted fast enough to stabilize margins for solar manufacturers, the bears roar on.

Solar stocks nosedived in 2011. And naysayers, deniers, and haters have all piled on, shaking their Solyndra noise makers behind the backdrop of partisan buffoonery.

As this continues, guys like Warren Buffett buy $2 billion solar farms.

Solar installer SolarCity lands a $1 billion solar installation contract with the U.S. Military — which, by the way, was able to land funding through Bank of America and Merrill Lynch.

Moser Baer has raised $1 billion for new solar projects all over the globe, though most of those projects will be found in India.

And why not? That’s where the next solar bull market is.

Hell, that’s where the next energy bull market is.

It’s basically an all-you-can-eat energy buffet. Want some solar? They got it. Want coal? They got it. Want nuclear? They got it. How about biogas? They got it.

Want to make money?

Ride India’s energy growth any way you can…

To a new way of life and a new generation of wealth…

Jeff Siegel Signature

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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