Union Budget 2025 Unveils Reforms to Encourage Private Investment in Nuclear Energy

Key Takeaways

The Indian Union Budget aims for a 100 GW nuclear power capacity by 2047, supporting a shift towards cleaner energy sources.
A funding of Rs 20,000 crore will aid research and development of small modular reactors, with plans for operationalizing five by 2033.
Private sector participation in nuclear energy is encouraged through public-private partnerships and specific initiatives for industrial use.

Boosting Nuclear Energy in India

The Indian government is significantly advancing its civil nuclear energy agenda, as outlined in the recent Union Budget. Aiming for a capacity of 100 GW by 2047, the government has proposed amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act. These changes are designed to facilitate greater private sector participation in nuclear energy initiatives.

In a notable financial commitment, Rs 20,000 crore will be allocated toward the development of small modular reactors (SMRs), which are seen as transformative solutions for sectors that are challenging to decarbonize. The objective is to have at least five indigenously developed SMRs operational by 2033. The Economic Survey for FY25 has highlighted the significance of nuclear energy as a reliable and efficient source, emphasizing the necessity for a progressive approach addressing public safety concerns and technology uncertainties, especially given that modern technologies are predominantly controlled by a few nations.

Anujesh Dwivedi, a partner at Deloitte India, pointed out that the government’s announcement reflects a significant policy shift towards nuclear power as a long-term solution. He stressed that this aims to diversify India’s energy portfolio, aligning it with the country’s target of achieving net-zero emissions by 2070.

Rising demand for greener alternatives in industries such as steel, cement, and methanol has spurred the government to promote nuclear energy. Additionally, the growing energy needs of India’s expanding data center sector are being positioned to be met through nuclear and other green energy sources. Experts indicate that achieving the 100 GW target will require an average of 5 GW of new nuclear energy production annually over the next two decades. The Bharat Small Reactors (BSRs), which have a capacity of 220 MW, are anticipated to play a pivotal role in meeting this demand.

Mehul Shah, CEO of Clean Core Thorium Energy, acknowledged the potential of thorium as a fuel source for nuclear reactors and discussed recent partnerships with NTPC Ltd. aimed at exploring the deployment of thorium-based fuels. The government is actively facilitating the establishment of BSRs for industrial use, therefore allowing industries to harness nuclear energy for their operations.

In tandem, the Nuclear Power Corporation of India has issued a request for proposals to industries interested in developing 220 MW BSRs for their captive consumption. This initiative marks a turning point in India’s nuclear energy policy, welcoming private investment into the sector. Moreover, NTPC Ltd. has entered a 51:49 joint venture with the Nuclear Power Corporation to develop the 2,800 MW Mahi Banswara nuclear power project in Rajasthan. Over the next 23 years, NTPC plans to invest between Rs 3 to 4 lakh crore to achieve an additional 20 GW of nuclear capacity, paving the way for a robust nuclear energy framework in India.

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