India’s small nuclear reactor initiative draws major players as AI and crypto industries fuel demand for reliable, low-carbon power. Analysts say nuclear energy’s time has come.
Corporate Heavyweights Show Growing Interest in India’s Small Modular Nuclear Reactors
India’s ambitious small reactor programme is drawing significant attention from major corporates amid rising energy needs from artificial intelligence data centres and cryptocurrency mining operations. Industry analysts suggest the renewed interest in nuclear energy is driven by its unique ability to deliver reliable, low-carbon, baseload power in an increasingly demanding digital age.
“Nuclear energy provides high quality, reliable power at low operational cost. Historically, these advantages have been overshadowed by concerns over safety, capital cost, and fuel supply. However, surging demand from AI data centres and crypto, coupled with its unique low-carbon baseload capability apt for thermal plant replacement, has driven a resurgence of interest,” SBI Caps wrote in a 30 April report.
While the upfront cost of nuclear power projects (NPPs) remains high—₹16–20 crore per megawatt (MW), compared to ₹9–10 crore/MW for coal and ₹4.3–5.3 crore for solar—its long-term financial and environmental viability has come into sharper focus. Wind and hydropower projects currently cost ₹6.5–7.8 crore and ₹20 crore per MW, respectively. The levelized cost of nuclear energy, particularly when storage is factored into renewable options, places nuclear in a favourable competitive bracket, the report added.
As outlined in the government’s request for proposals (RFP), selected users will finance the construction, operation, and decommissioning of these compact nuclear plants. Upon completion, the assets will be transferred to the Nuclear Power Corporation of India Ltd (NPCIL) for a token sum of ₹1. Despite the transfer, the user will retain beneficial ownership of the electricity generated.
NPCIL will assume operational responsibilities under a long-term comprehensive O&M agreement. For this service, users will pay 60 paise per kilowatt-hour (kWh) in 2030–31, with the cost escalating by 1 paise annually.
Prospective users must meet stringent requirements, including a demand for 2,500 million units (MUs) of electricity, a strong credit rating, and a minimum net worth of ₹3,000 crore.
To accommodate this new model, these nuclear plants are expected to receive “captive generating plant” status. A proposal to amend the Electricity Rules, 2005, under the Electricity Act, 2003, is currently under review by the Ministry of Power. For those seeking to sell electricity externally, the tariff will be determined by the Department of Atomic Energy (DAE) in accordance with the Atomic Energy Act, 1962.
“The project is to be constructed by the user under the supervision and control of the NPCIL, and on completion, the asset is to be transferred to NPCIL for operation,” the RFP stated. “Once the NPP under BSR project has been fully constructed, the entire asset will be transferred for (the) purpose of operation thereof to NPCIL under long-term comprehensive O&M (operations and maintenance) agreement.”
India’s small nuclear initiative now stands as a potential game-changer in the country’s clean energy future, aligning industrial power demands with sustainable infrastructure in an increasingly electrified digital world.
