India Embraces Nuclear Energy for Data Centres

The Indian government is showing a strong interest in harnessing nuclear energy, particularly through small modular reactors (SMRs), to meet the energy demands of its rapidly expanding data centre sector. As artificial intelligence (AI) continues to grow, data centres are facing unprecedented energy needs, with projections indicating that their power requirements could double by 2026.

The IT Ministry is encouraging the adoption of SMRs as part of a national policy aimed at providing long-term, reliable, and carbon-free energy sources for data centres. This shift is crucial as companies like Google and Microsoft are already seeking partnerships with nuclear power plants to secure energy for their operations.

Data centres consume a significant amount of energy, accounting for a large portion of their capital and operational costs. According to reports, about 40% of the capital expenditure and 65% of the operating costs of data centres in India are attributed to power consumption. Establishing a single megawatt (MW) of data centre capacity costs approximately Rs 60-70 crore. With the Indian data centre market valued at around $10 billion, the stakes in optimizing energy use are high.

While renewable energy sources have been the preferred choice for many companies, challenges related to their reliability raise concerns. Nuclear energy presents a viable alternative, especially since it provides a consistent power supply that can support the round-the-clock demands of AI applications, overcoming the intermittent nature of renewables.

SMRs, which have a capacity range of 30MWe to 300MWe, are increasingly recognized as a commercially viable option for future energy needs. Globally, only a couple of SMR projects have reached operational status, with India aiming to join this emerging technology landscape.

To facilitate this shift, the Indian government is considering amendments to existing nuclear laws, which may encourage private sector participation in nuclear power operations. These reforms are seen as essential to unlock the potential of nuclear energy in India, especially in the context of international collaborations, including the Indo-US civil nuclear deal.

As discussions around energy policy continue, India stands at a pivotal moment, ready to embrace nuclear energy to power its future technological advancements and support its growing data centre infrastructure.