The Hindu: Published on 31st Oct 2025.
Why in News?
India’s electricity demand is expected to rise sharply as the country rapidly expands its AI-driven data centres, electric vehicles, 5G networks, and green hydrogen programmes. To meet this demand sustainably and ensure uninterrupted power, India is exploring Small Modular Reactors (SMRs) — a new generation of compact nuclear reactors that can provide clean and reliable energy for data-intensive industries.
Background:
For nearly two decades, India’s power demand grew steadily at around 5% per year. However, with the ongoing digital transformation, technologies like Artificial Intelligence (AI), the Internet of Things (IoT), and advanced data processing are now consuming far more electricity.
Globally, data centres already account for almost 3% of total electricity use, and this share could double by 2030. In India, the Digital India initiative, data localisation laws, and the IndiaAI mission are driving large-scale demand for domestic data storage and computing capacity. This is pushing the government and private companies to plan new data centres and power sources.
Key Drivers of Growth:
The rollout of data centres, the expansion of 5G and IoT networks, and the growing use of AI and machine learning models are creating unprecedented power needs. Electric Vehicles (EVs) and green hydrogen production will further add to base electricity demand.
AI data centres are particularly energy-intensive — a single rack using Graphics Processing Units (GPUs) can consume 80–150 kilowatts of power, compared to just 15–20 kilowatts for a traditional server. This has made AI the most significant driver of global power demand growth.
The Global Scenario:
The United States leads the world with more than half of global data centre capacity, mainly concentrated in Texas, Virginia, Phoenix, and Ohio. China is seeing a 25% year-on-year rise in power demand due to AI and data processing, reaching 400 billion kilowatt-hours by 2025.
India is now emerging as a new data centre hub. Google has selected Visakhapatnam, and Reliance Industries has chosen Jamnagar for their large AI data centres. Domestic companies like Yotta, AdaniConneX, Sify, and CtrlS are expanding in major cities such as Mumbai, Chennai, Bengaluru, and Hyderabad. This expansion aligns with India’s national goal of building a strong AI infrastructure ecosystem.
Power Requirements and Challenges:
Global electricity consumption by data centres could increase from 460 terawatt-hours in 2024 to over 1,000 terawatt-hours by 2030.
Renewable energy alone cannot meet this continuous demand because of its intermittent nature. Therefore, industries are exploring stable, low-carbon sources such as nuclear energy. Small Modular Reactors are emerging as a key solution for ensuring uninterrupted power for AI infrastructure while maintaining climate goals.
What are Small Modular Reactors (SMRs)?
SMRs are compact, factory-built nuclear reactors designed to produce between 1 and 300 megawatts of power. They can be transported to a site and installed quickly.
They are considered safe, cost-effective, and flexible. Their small size allows co-location near consumption centres such as AI data centres, avoiding the need for long transmission lines.
SMRs operate with passive safety features — meaning they can shut down automatically without human intervention or external electricity. They also provide stable 24×7 power and can integrate well with renewable energy sources.
India’s SMR Ambition:
In the 2025 Union Budget, India launched the Nuclear Energy Mission with an allocation of ₹20,000 crore ($2.4 billion). The goal is to achieve 100 GW of nuclear capacity by 2047 and bring at least five SMRs into operation by 2033.
The Bhabha Atomic Research Centre (BARC) is currently developing two SMR models — the 200 MW pressurised heavy water reactor (BSMR-200) and a 55 MW variant suitable for remote areas.
To attract around $26 billion in private and foreign investment, the government plans to amend the Atomic Energy Act, 1962, and the Civil Liability for Nuclear Damage Act, 2010. These reforms will align India’s nuclear laws with international standards and open the sector to private participation.
Collaborations and Opportunities:
India is seeking technology transfer and collaboration with companies such as Holtec International (USA) and other global partners.
State governments will play a vital role by identifying suitable project sites, especially former coal power plants and green hydrogen hubs. They can also help with land acquisition, regulatory approvals, training regulators, and reskilling the coal workforce for nuclear operations.
Partnerships between AI data centre companies, renewable energy developers, and SMR vendors can create a sustainable and self-sufficient energy ecosystem.
Safety and Regulation:
SMRs are designed with advanced safety systems that rely on natural processes like convection and gravity, reducing the need for active human intervention. Their smaller fuel quantities and passive safety mechanisms make accidents less likely and easier to manage.
However, current nuclear regulations are based on large reactor models. Therefore, India and other countries need to develop new, flexible, and technology-neutral regulatory frameworks for SMRs.
Globally, the U.S. ADVANCE Act (2024), Canada’s Vendor Design Review process, and the U.K.’s regulatory sandbox model are setting new benchmarks for SMR regulation. These frameworks aim for completion by 2026, with the first commercial SMRs expected by 2030.
Concerns and Challenges:
Transportation of factory-built SMRs, especially those loaded with fuel, raises security and radiation safety issues. New regulations are needed to ensure safe transport and liability management in case of accidents.
SMRs using advanced fuels such as HALEU or alternative coolants may create new waste types that require updated storage and disposal strategies. High initial capital costs and regulatory delays could also slow deployment. Public perception remains another challenge, as nuclear energy still faces concerns related to safety and waste management.
India’s Strategic Opportunity:
If implemented effectively, SMRs can help India achieve energy independence, meet its carbon reduction targets, and support its growing AI-driven economy. They could also make India a manufacturing and export hub for nuclear technology, similar to its progress in space and digital sectors.
With the right policies and partnerships, India can establish itself as a regional leader in both AI infrastructure and clean nuclear power technology.
Way Forward:
India needs to fast-track nuclear law reforms, establish demonstration SMR projects by 2030, and integrate SMRs with renewable energy to ensure 24×7 clean power. Collaboration between the government, private sector, and global technology leaders is crucial.
A national policy on nuclear waste management and transportation safety should also be developed. Training and re-skilling programmes will be essential to build a capable workforce for this emerging sector.
Conclusion:
- India is at the crossroads of a digital and nuclear transformation.
- The growing electricity demand from AI data centres presents both a challenge and an opportunity.
- Small Modular Reactors offer a path toward clean, reliable, and sustainable energy that can power India’s AI revolution and support its long-term goal of becoming a global leader in advanced technologies.
