Transforming India’s nuclear power landscape

Transforming India’s nuclear power landscape

In the 2025-26 Budget speech, Finance Minister Nirmala Sitharaman announced that India’s installed nuclear power generation capacity would rise from 8,180 MW to 1,00,000 MW (100 GW) by 2047. She also signalled transformative legislative changes, leading to the introduction and rapid passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill in December 2025.

The scope of change envisaged is dramatic. All nuclear activity had hitherto been the exclusive preserve of the Department of Atomic Energy (DAE). The SHANTI Act promises a transformation of India’s nuclear energy landscape by bringing in private companies to build, own and operate nuclear power plants, provides statutory status to the Atomic Energy Regulatory Board (AERB), and revises the liability framework to encourage private and even foreign investment. The 1962 Atomic Energy Act and the 2010 Civil Liability for Nuclear Damage Act (CLNDA) stand repealed and replaced by the SHANTI Act (2025).

However, to realise the promise of 100 GW will need putting the nuts and bolts of implementation in place, the notification of supportive rules and regulations, consonant with the transformative spirit underlying the SHANTI Act.

Driving the reforms

Two key pronouncements drive the reform: achieving Viksit Bharat by 2047 and net-zero emissions by 2070. As society moves up the development ladder, the nature of energy consumption shifts to electricity from traditional modes of energy such as firewood, fossil fuels for transport and heating, and coal for industry. Consequently, the “net zero” target also imposes a parallel shift away from fossil fuel-based power generation towards renewables and other low carbon options. In 2024, India’s per capita electricity generation was 1,418 kWh (kilo-watt-hour) compared to 7,097 kWh for China and 12,701 kWh for the United States. The OECD average is a little above 8,000 kWh. This indicates the distance that India needs to travel to achieve the goal of Viksit Bharat. The second goal of “net zero” imposes its own conditionalities. In 2024, India’s per capita energy consumption was 7,893 kWh, indicating that only one-fifth of the energy consumption is from electricity.

In June 2025, India’s electricity generating capacity reached 476 GW (giga-watt) and approximately 50% was non-fossil fuel sources. Renewable sources made up 227 GW, consisting of solar power 111 GW, wind power 51 GW, and hydropower 48 GW, with an additional 5GW from micro-hydel projects and bioenergy 12 GW. In addition, nuclear power — which is seen as low carbon and not strictly renewable as it consumes fissile material as fuel — was 8.8 GW. Thermal power, primarily based on coal accounted for 240 GW. India has committed to increasing the installed capacity of renewables to 500 GW by 2030. However, the installed capacity does not reveal the full picture. Renewable sources generation depends on the time of day, climatic and seasonal conditions and geography. India generated a total of 1,824 TWh (tera-watt-hours) during 2024-25. Renewable sources accounted for 403 TWh (solar 144 TWh, wind 83 TWh, hydro power 160 TWh and bioenergy 16 TWh). Nuclear power accounted for 57 TWh while thermal power generation was 1,363 TWh. Thermal power, therefore, accounted for 75% of the electricity generated with 50% of the generating capacity compared to 50% renewables capacity providing 22%, while nuclear power contributed 3% with 1.8% of generating capacity. The reason is that thermal and nuclear sources provide for steady baseload power. For renewables to provide at scale, large investments in energy storage become essential. This is why renewables capacity growth is now facing headwinds with projects of 40 GW languishing without power-purchase contracts.

India’s nuclear power journey and options

Conservative estimates indicate that India will need to grow its electricity generating capacity to over 2,000 GW to reach Viksit Bharat levels. Even with more efficient and cheaper battery storage, renewables such as solar and wind farms are about 10 times more land intensive when compared to thermal power plants; since coal is inconsistent with “net zero”, nuclear power remains the preferred baseload means to achieve “net-zero”.

India’s first nuclear power reactor went operational in 1969 in Tarapur. Today, the Nuclear Power Corporation (NPCIL) is managing 24 nuclear power plants with an installed capacity of 8,780 MW (one reactor in Rawatbhata has been shut down). The two oldest are Boiling Water Reactors (BWR), two at Kudankulam are Russian design VVERs (pressurised water reactor or PWR) and the balance are Pressurised Heavy Water Reactors (PHWR). The original design was 220 MW; this has been successfully indigenised and adapted to 540 MW and 700 MW designs.

The DAE budget has averaged between ₹24,000 crore and ₹26,000 crore during the last three years. India’s 700 MW PHWR construction cost is $2 million per MW, among the lowest globally for nuclear power. To add 90 GW over the next two decades would need an outlay of over $200 billion (₹18 lakh crore), only feasible with private investment; both domestic and foreign.

In 2017, the government gave administrative and financial approval for building 10 reactors of 700 MW each in fleet mode but work has not begun. The logic of fleet mode was to streamline production to gain economies of scale. Three other locations — Jaitapur (Maharashtra), which is planned to have six reactors of 1,650 MW each based on a French (EDF) design, and Mithi Virdi (Gujarat) and Kovvada (Andhra Pradesh), each slated to have six reactors of 1,000 MW capacity using Westinghouse-Toshiba and GE-Hitachi designs — have been under consideration for over a decade. The likely power generation costs from these unproven designs is likely to be over $5 million per MW.

Many industries have captive power plants, ranging from 10 MW to 200 MW; most of these are fossil fuel-based. Current estimates for the installed capacity are 90 GW with plants of 100 MW and above accounting for two-thirds capacity. The government has allocated ₹20,000 crore to research and develop five indigenous models of Small Modular Reactors (SMR) of 5 MW, 55 MW and 200 MW capacity by 2033. Meanwhile, the indigenised 220 MW PHWR model (15 are currently operational), can be a reliable workhorse. With efficient project management, some amount of modularisation, and economies of scale, the time from first pour-of-concrete to going-on-stream can be reduced to 40 months. Steel, primary metals, cement, petrochemicals and paper industries, and now, the data centres, have shown interest.

Three-front nuclear strategy

To achieve the 100 GW target requires careful planning across three fronts. The EdF and Westinghouse designs are comparatively new and will need to be indigenised to bring down costs. China has demonstrated this by building a supporting industry base and plans to build 33 reactors of 1,000 MW each at below $2 million per MW over 10 years. Second, the DAE should identify institutions to accelerate research and development for indigenous SMRs, especially of the molten-salt reactor design. Another research area is in the use of Thorium cladding with HALEU (High Assay Low Enriched Uranium) that can provide an alternative to the Breeder Reactor route in order to permit early exploitation of India’s thorium reserves. Third, the indigenised 220 MW PHWR model is ready to be modularised as an economically viable replacement for a number of captive power plants; some Indian private sector companies have the requisite design, fabrication and construction experience. Since nuclear power generation requires high upfront capital costs but low operating costs over a long (60 years) operating life, an appropriate financing model will need to be worked out. Existing exclusion zone regulations, intended for multiple reactors at one site will need to be modified for captive single unit reactors.

Conceptually, the SHANTI Act attempts a division between strategic- and defence-related nuclear activities and the civilian power generation; now, the rules and regulations to be issued must make this clear. Issues of nuclear power tariffs, ownership of nuclear fuel, waste management, insurance and liability, dispute settlement mechanism, and an autonomous regulator will need to be dealt with in a transparent manner. Only then will the SHANTI Act deliver on its promise.

Realising the 100 GW target requires SHANTI Act implementation alongside transparent resolution of tariffs, fuel ownership, waste management, insurance, dispute settlement, and regulatory autonomy