Small Modular Reactors: Fueling the AI Data Centre Boom in India

Small Modular Reactors: Fueling the AI Data Centre Boom in India

Context:

AI data centres are the backbone of Generative AI and cloud computing, requiring continuous, high-density energy.
Global energy demand from data centres is rising sharply, pushing countries to explore low-carbon, 24×7 energy sources.
Small Modular Reactors (SMRs) are emerging as a viable solution to meet this demand sustainably.
In India, the Nuclear Energy Mission (2025) aims to deploy indigenously built SMRs to power the growing AI and data infrastructure.

1. India’s Electricity Demand: Data and Trends

Rising Demand: Electricity growth was steady at ~5% per year for two decades but is now increasing due to AI, EVs, and green hydrogen.
Industrial Shifts: Energy-intensive sectors like data centres, 5G, and digital manufacturing are adding new base-load layers.
Capacity Challenge: India, the third-largest electricity producer, faces localized shortages and transmission stress.
Decarbonisation Pressure: With a target of 500 GW of renewables by 2030, intermittency of solar and wind makes 24×7 supply challenging.

2. Need for AI Data Centres in India

Digital India Push: Policies like data localisation and Digital India require massive domestic storage and processing capacity.
5G & IoT Explosion: The rollout of 5G and IoT devices generates exponential data, necessitating high-performance computing hubs.
AI and Cloud Workloads: Generative AI and large language models (LLMs) demand high-density GPUs, transforming data centres into computational grids.
Security & Sovereignty: Sensitive data must be processed within national borders due to India’s data protection regulations.
Economic Multiplier: AI data centres can create jobs, attract FDI, and strengthen India’s global digital presence.

3. Global and India Scenario

Global Growth: Electricity consumption by data centres may rise from 460 TWh (2024) to 1,300 TWh (2035).
U.S. Leadership: The U.S. accounts for 51% of global capacity, with hubs in Texas, Virginia, Phoenix, driving 25% grid demand growth.
India’s Expansion: Current 1.4 GW capacity may reach 7 GW by 2030, with investments by Google, Reliance, AdaniConneX, Yotta.
Regional Focus: Emerging clusters are in Mumbai, Chennai, Bengaluru, Hyderabad, Jamnagar, Visakhapatnam under the IndiaAI Mission.

4. Role of Small Modular Reactors (SMRs) in Power Supply

Baseload Solution: SMRs provide 24×7 low-carbon power, ideal for AI data centre operations.
Scalable & Modular: Capacity ranges 1–300 MW, deployable near consumption hubs to reduce transmission losses.
Safety by Design: Features like passive cooling, smaller cores, and accident-tolerant fuels enhance reliability.
Global Investment: Billions invested globally; India plans five SMRs by 2033.
Policy Backing: ₹20,000 crore Nuclear Energy Mission aims for 100 GW by 2047, attracting private investment.

5. Limitations and Concerns of SMRs

Regulatory Bottlenecks: Licensing designed for large reactors delays SMR approvals.
High Costs: Despite modularity, initial capital costs are high without scale.
Waste Disposal: Advanced fuels like HALEU present long-term waste management challenges.
Transportation Risks: Factory-built units need secure logistics and radiation safeguards.
Public Acceptance: Social resistance and nuclear liability concerns persist despite improved safety.

6. Way Ahead

Regulatory Reforms: Streamlined, technology-neutral licensing aligned with IAEA frameworks.
Public-Private Partnerships: Collaborations between SMR vendors, AI data centre operators, and renewable energy firms.
Site Repurposing: Convert retired coal plants and hydrogen hubs into SMR-ready sites.
Skilling & Research: Train regulators, reskill coal workforce, and promote global R&D collaborations.
Integrated Power Strategy: Combine renewables, SMRs, and storage for resilient digital energy ecosystems.

Conclusion:

As AI becomes the industrial engine, energy acts as its critical oxygen.
India’s SMR adoption, combined with renewable energy, provides a sustainable solution to power AI data centres.
The nations that balance high computational demand with clean, continuous, and responsible energy will lead the digital intelligence revolution.