Budget and Nuclear Power
Context:
In a significant policy shift, Finance Minister Nirmala Sitharaman, in her Budget speech, announced an ambitious plan to develop at least 100 gigawatts (GW) of nuclear energy by 2047.
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- This initiative, supported by a dedicated Nuclear Energy Mission with an allocation of ₹20,000 crore, is a key component of India’s energy transition strategy.
- The move highlights the urgent need to diversify the country’s energy mix to meet its climate goals while addressing rising electricity demand driven by urbanisation, rural electrification, and increasingly extreme summer temperatures.
- Currently, 89% of India’s energy needs are met by fossil fuels, while solar and wind power face challenges related to technology and pricing policies.
- Nuclear energy, with its low-carbon footprint and high efficiency, is being positioned as a viable solution to India’s growing power requirements.
Small Modular Reactors to Lead the Way
- A major focus of the mission is the deployment of Small Modular Reactors (SMRs)—advanced nuclear reactors with a power capacity of up to 300 megawatts (MW) per unit, about one-third the size of conventional reactors.
- The plan aims to operationalise five SMRs by 2033, leveraging India’s existing expertise in small-reactor technology.
- This announcement comes at a crucial time, following the United States’ decision to lift restrictions on key Indian nuclear institutions, including the Bhabha Atomic Research Centre (BARC), Indira Gandhi Atomic Research Centre (IGCAR), and Indian Rare Earths Limited.
- The move enhances India’s access to nuclear technology and could facilitate international collaborations.
Challenges in Meeting the 100 GW Target
- India generated 8.18 GW of nuclear power in 2024, up from 4.78 GW in 2014, but reaching 100 GW by 2047 remains a formidable challenge.
- Recognising this, the government is pushing for greater private sector participation, a strategy previously recommended by NITI Aayog.
- This shift is evident in the reduction of budgetary allocations for the Nuclear Power Corporation of India Ltd (NPCIL), the state-owned entity responsible for nuclear power plants.
- NPCIL’s funding for 2025-26 has been cut by ₹472 crore, while the Department of Atomic Energy’s budget has been reduced by ₹402 crore.
- To facilitate private investment, the government has proposed amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act (CLNDA).
- The Atomic Energy Act amendment would end NPCIL’s monopoly over nuclear power generation, allowing private companies to enter the sector.
- Meanwhile, changes to the CLNDA could potentially address liability concerns that have deterred international private players from investing in India’s nuclear energy sector.
Present Status
India has an installed nuclear power capacity of 8,180 MW. This capacity has seen substantial growth from 4,780 MW in 2013-14, reflecting a more than 70% increase over the past decade. The annual electricity generation from nuclear power plants has also risen, from approximately 34,228 million units in 2013-14 to about 47,971 million units in 2023-24. The Indian government aims to triple its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32.
India’s Expertise in Small Reactors
- While SMR technology is relatively new globally, India has extensive experience in building and operating smaller nuclear reactors.
- Of the 22 operational reactors in the country, most have a capacity of 220 MW, and India has also successfully developed an 85 MW reactor for its nuclear submarine program.
- Design teams under the Department of Atomic Energy are now working on using this expertise to develop modular factory-built reactors, which could accelerate deployment and create opportunities for technology transfer with private players.
- SMRs offer several advantages, including:
- Faster construction times
- Lower costs compared to traditional large reactors
- Enhanced safety features
- Flexibility in installation across diverse locations
Potential Roadblocks in Implementation
Despite its potential, India’s SMR expansion may face regulatory and financial hurdles. Key concerns include:
- Uncertainties in the licensing regime that will govern private nuclear projects
- Grid power pricing issues, which have troubled power generators for decades
- Land acquisition challenges and public opposition to nuclear projects in some regions
While the 100 GW target is highly ambitious, its success will ultimately depend on efficient implementation, regulatory clarity, and strong public-private collaboration.
