In a strategic move that could significantly boost its energy security and economic development, India is poised for a major expansion in nuclear power. The nation's installed capacity is set to surge by 70% in the next five years, from 7.48 GW to 13.08 GW. This ambitious plan, which includes building 18 new reactors and reaching 100 GW capacity by 2047, is a critical step towards India's clean energy goals and its vision for a sustainable future.

 

INDIA’S NUCLEAR ASPIRATIONS

India has set ambitious clean energy targets, aiming to increase the share of non-fossil fuel sources in its electricity generation mix to 40% by 2030, and to achieve a net-zero emissions target by 2070. Nuclear power plays a crucial role in diversifying India’s energy mix away from fossil fuels such as coal and natural gas, which currently dominate the electricity sector. Such diversification is essential for achieving sustainable development goals and reducing environmental impacts.

A study by the OECD Nuclear Energy Agency and the International Energy Agency found that the median value for lifecycle GHG emissions from nuclear power is around 12 gCO2eq/kWh, significantly lower than coal (820 gCO2eq/kWh) and natural gas (490 gCO2eq/kWh). This makes nuclear power an essential component of a diversified, low-carbon energy mix. India’s transition towards greater nuclear power generation can directly contribute to its Nationally Determined Contribution (NDC) under the Paris Agreement. The country has committed to reducing the emissions intensity of its GDP by 45% from 2005 levels by 2030 and achieving net-zero emissions by 2070.

Currently, nuclear power contributes only 2% to 3% to India’s total power generation, which is largely dominated by coal. However, the government recognizes the importance of nuclear energy in providing reliable, carbon-free baseload power to support the country’s growing economy and population. To achieve this target, India plans to add 7 new nuclear reactors. Currently, India operates 22 nuclear reactors across several parts of the country, collectively generating around 6,780 megawatts (MW) of electricity. The addition of these seven new reactors is projected to substantially increase the country’s nuclear power capacity.By 2031, the total installed capacity is anticipated to rise to 22,480 MW, marking a significant leap forward in clean energy production.

 

NUCLEAR POWER EFFICIENCY

Nuclear reactors typically operate at capacity factors of over 90%, meaning they generate electricity close to their maximum potential almost all the time. This is much higher than the average capacity factors of coal (57.9%), natural gas (54.6%), and renewable sources like solar (24.1%) and wind (34.7%) in India. India is also making progress on its first Prototype Fast Breeder Reactor (PFBR) at Kalpakkam, which is expected to achieve initial fuel loading and criticality in the coming months.

This 500 MW sodium-cooled fast reactor is a key milestone in India’s three-stage nuclear programme, which aims to utilize the country’s vast thorium resources for long-term energy security.Beyond these large-scale reactor projects, India is also focusing on developing advanced nuclear technologies such as Bharat Small Reactor (BSR) and Bharat Small Modular Reactor (BSMR). These smaller, more localized reactor designs could help increase access to nuclear power in remote areas and support the nation’s growing energy needs.

 

IDEAL FOR INDIA TO BECOME A GLOBAL MANUFACTURING HUB 

Nuclear reactors provide reliable baseload electricity, meaning they can operate continuously and provide a stable power supply regardless of fluctuations in demand or the availability of renewable sources such as solar and wind. This expansion will provide a major boost to the stability and efficiency of India’s industrial sector. Baseloadpower from nuclear plants can support energy-hungry industries like steel, cement, chemicals, and mining, which require uninterrupted electricity to maintain their production processes. Frequent power outages or voltage fluctuations can lead to equipment damage, quality issues with products, and costly downtime for these industries.

 

STABLE AND RELIABLE POWER SUPPLY

Nuclear reactors operate at high-capacity factors (typically above 90%), ensuring a reliable and stable electricity supply for industries. This stability reduces  operational disruptions and downtime, crucial for industries reliant on continuous power. The predictability of nuclear power also allows industrial consumers to better plan their operations. This predictability helps them manage their energy costs more effectively. With a reliable baseload supply, industries can optimize their production schedules, reduce reliance on expensive backup generators, and negotiate more favourable electricity tariffs from utilities.

 

COST-EFFECTIVE, UNINTERRUPTED POWER

The expansion of nuclear power generation capacity in India has the potential to drive down electricity costs for industrial consumers, enhancing the competitiveness of the country’s manufacturing and heavy industries. Nuclear power plants have relatively low and stable operating costs compared to fossil fuel-based plants, which are subject to volatile fuel prices. Industries benefit from nuclear power’s low operating costs once the plant is built.

For example, according to industry reports, nuclear power in the United States is among the cheapest sources of electricity, with an average cost of around 2.5 cents per kilowatt-hour (kWh) for nuclear-generated electricity. Moreover, the long operating lifetimes of nuclear plants, often 40-60 years, provide industries with the assurance of a stable and affordable energy source for decades to come. This long-term certainty is crucial for capital-intensive industries that make investments based on multi-year horizons.

 

ECONOMIC BENEFITS

A report by the Confederation of Indian Industry (CII) estimates that a 10% reduction in industrial electricity tariffs could boost India’s manufacturing GDP by 1.2%, and create an additional 1 million jobs. Similarly, a study by the National Institute of Public Finance and Policy (NIPFP) found that a 20% reduction in industrial power costs could increase India’s manufacturing output by 3.3%. However, the realization of these cost-reduction benefits will depend on the successful execution of India’s nuclear expansion plans, as well as addressing challenges like high upfront costs and public acceptance issues.Nonetheless, the potential for nuclear power to drive down industrial electricity prices remains a compelling prospect for India’s industrial development.

 

INVESTMENT OPPORTUNITIES

Generation companies, equipment manufacturers, EPC players, civil construction, cable manufacturers, consultants, power financing companies and many others who are operating in the entire value chain like L&T, BHEL, ABB, Siemens, NTPC and other smaller players carrying different kinds of activities like Hindustan Construction, Patel Engineering, OM Infra, and many others, could remain in the limelight.Moreover, there is growing emphasis on the increased participation of private players in India. Currently, most nuclear power plants are run by state utilities like Nuclear Power Corporation of India. Indian companies are also participating in the construction of these power plants in overseas markets like Bangladesh.

 

 

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