The nuclear investment thesis: India's atomic energy expansion story

India is placing a bold bet on nuclear energy as it races to power its economy while slashing emissions. As the country grows, so does its power demand. The push for clean and renewable energy has brought nuclear energy into focus. Over the past decade, India has made notable progress in expanding its nuclear capacity.

Fig: India ranks sixth in nuclear capacity addition. Source: Global Energy Monitor

The global nuclear story: From boom to bust to bounce-back

Nuclear power once promised abundant, low-carbon electricity, leading to a boom in the US, Europe, and Japan during the 1960s and 70s. But disasters—Three Mile Island (1979), Chernobyl (1986), and Fukushima (2011)—soured public opinion, prompting phase-outs in countries like Germany and Italy.

A shift is underway. With energy security and climate goals becoming urgent, nuclear is back in favour. At COP28 in 2023, 20 nations pledged to triple global nuclear capacity by 2050. Currently, 69 reactors are under construction and 110 more are planned—mainly in China, India, and Russia.

Global context: Nuclear Energy’s strategic resurgence

Globally, 439 nuclear reactors supply about 9% of the world’s electricity. The US leads in operating reactors, while China dominates new construction. France remains a standout, generating over 67% of its electricity from nuclear power.

Economic challenges remain: high upfront costs, long lead times, and public concerns over safety and waste management. However, with climate goals looming and energy security concerns deepening, nuclear’s appeal is rising, with governments offering incentives to de-risk investments.

India’s unique path: Self-reliance in nuclear energy

Due to its nuclear weapons programme and refusal to sign the Nuclear Non-Proliferation Treaty, India had limited access to international technology and fuel. As a result, it built self-reliance across the nuclear fuel cycle—from uranium mining to reactor design and waste management.

India’s Atomic Energy Commission formulates nuclear policy, while NPCIL handles construction and operation. The Atomic Energy Act, 1962, restricts plant ownership to government bodies or PSUs. Private sector participation is limited to auxiliary services. Direct foreign investment in generation is prohibited.

The plan and recent milestones

Under the Viksit Bharat vision, India targets a nuclear capacity of 22.48 GW by 2031–32 and 100 GW by 2047.

Recent milestones include:

• Indigenous 700 MW reactor at Kakrapar began operations in 2024
• Kalpakkam’s 500 MW Prototype Fast Breeder Reactor achieved commissioning targets
• New uranium finds in Jaduguda extended fuel availability by 50 years
• Rajasthan Atomic Power Project Unit-7 achieved criticality in Sep 2024
• ASHVINI, a joint venture of NPCIL and NTPC, will develop nuclear sites like the 4x700 MW Mahi-Banswara project

Technologies powering India’s nuclear expansion

• PHWRs: Backbone of India’s programme; 10 more 700 MW units planned
• FBRs: Key to India’s 3-stage plan; breed more fuel and reduce waste
• SMRs: Under development by BARC for grid and industrial use
• Thorium Fuels: With 25% of global reserves, India is testing thorium-HALEU fuel (ANEEL) to cut waste and improve efficiency

Challenges and Opportunities

Challenges:

• Public protests have delayed several plants
• High capital costs require government backing
• Fuel supply, especially uranium, remains tight

Opportunities:

• Stable baseload for a renewable-heavy grid
• A powerful tool for decarbonization
• Indigenous expertise lowers import dependence
• SMRs may revolutionize industrial energy
  

Companies in India’s nuclear value chain– a partial list

The road ahead

India plans to scale nuclear capacity through indigenous designs, innovative fuels, and collaborative public-sector ventures. For global energy watchers, India’s nuclear journey could be a pivotal chapter in the clean energy revolution.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)