In the FY2024-25 budget, Finance Minister Nirmala Sitharaman allocated Rs. 20,000 crore for research and development (R&D) in Small Modular Reactors (SMRs) in India. The minister highlighted that achieving net-zero emissions requires a diverse energy mix, including nuclear power. As part of this strategy, the government aims to reach 100 GW of nuclear energy capacity by 2047 under the country's Nuclear Energy Mission.
The moot question is why is the government focusing on nuclear energy, and why is India actively seeking technology partners to develop SMRs?
What is a Small Modular Reactor (SMR)?
Small Modular Reactors (SMRs) are compact, next-generation nuclear reactors designed to be safer, more efficient, and scalable than traditional nuclear power plants. As the name suggests, SMRs are smaller in both size and capacity, typically producing up to 300 megawatts (MW) of electricity, compared to the thousands of MW produced by conventional nuclear reactors.
Deploying SMRs across the country, especially in locations unsuitable for large nuclear plants, can produce a significant amount of low-carbon electricity. To reduce reliance on fossil fuels, SMRs can replace aging fossil fuel-based power plants.
However, SMRs are not intended to replace conventional large nuclear power plants, which serve as base-load plants.
That said, the technological and commercial aspects of SMRs are still in their early stages, even in developed nations.
Why is the government keen on SMRs?
The government and public sector energy companies are focusing on developing SMRs as part of India’s ambitious energy transition. With the goal of achieving 500 GW of non-fossil fuel power capacity by 2030, nuclear power is seen as a crucial part of this plan.
Experts believe SMRs are particularly well-suited to India’s energy needs. One key reason is that not every state in India can host large-scale nuclear power plants due to space and security requirements. In contrast, SMRs can be installed and operated without these constraints. Additionally, global companies are more willing to share technology related to SMRs, which could foster greater collaboration between Indian and international companies.
Challenges for the SMR Industry
SMRs come in a wide range of sizes, from under 30 MW to over 300 MW. As a result, many different SMR designs are being developed. Experts believe having too many options can slow the growth of the industry. Too many designs could create regulatory challenges and make it harder to control costs. To move forward, the number of designs should be narrowed down to a few key ones.
According to a Niti Aayog report, the technology behind SMRs needs to advance further before it can be widely adopted by utilities, investors, and governments. The industry still lacks a fully developed facility for mass-producing SMR components, which would require significant investment. Developers also face challenges raising the funds needed for technology development, licensing, and building prototype plants.
Private investment in SMRs remains limited and does not meet the required level.
To overcome these challenges, the development of SMRs must focus on designing and creating standardized small reactors that can be manufactured repeatedly in a factory with high quality control. By leveraging modern tools and techniques from the Industry 4.0 paradigm, this approach will help improve efficiency. Over time, as production becomes more streamlined, the costs of manufacturing will decrease due to the learning curve and economies of scale.
India’s Nuclear Power and Private Sector Involvement
As of January 30, 2025, India’s nuclear power capacity is 8,180 MW. To boost this, the country is partnering with the private sector to develop more nuclear energy. This plan supports India’s goal of achieving 500 GW of non-fossil fuel-based energy by 2030 and sourcing 50% of its energy from renewable sources by the same year.
The focus of this partnership is on developing Bharat Small Reactors (BSRs) and Bharat Small Modular Reactors (SMRs), as well as exploring new nuclear technologies. In this effort, private companies will provide land, cooling water, and capital, while the Nuclear Power Corporation of India Limited (NPCIL) will handle the design, quality checks, and operation of the plants.
Bharat Small Reactors (BSRs) are 220 MW Pressurized Heavy Water Reactors (PHWRs), which will help expand India’s nuclear energy capacity.
Private Companies in India’s Nuclear Sector
Several big private companies are showing interest in India’s nuclear power industry. For instance, NTPC, one of India’s largest power companies, has been exploring the SMR space and is working with the Bhabha Atomic Research Centre to develop local SMR technology. NTPC has also teamed up with NPCIL on nuclear projects.
Tata Power plans to enter the nuclear sector once the government updates regulations to allow public-private partnerships for building plants and small reactors. As per the reports L&T and the Adani Group are also considering investments, as the government plans to attract $26 billion in the nuclear sector.