India’s Finance Minister Nirmala Sitharaman has presented a wide-ranging Union Budget for 2024-2025, which recognised the importance of nuclear energy and announced plans to partner with the private sector to develop small modular reactors (SMRs).
“The Budget For Viksit Bharat ensures inclusive growth, benefiting every segment of society and paving the way for a developed India,” said Prime Minister Narendra Modi on X. Viksit Bharat (Developed India) 2047 represents the government’s vision to transform India into a developed entity by its 100th anniversary of independence in 2047.
Energy security is just one of nine priorities in the budget, the others relating to agriculture, employment, human resource development, manufacturing urban development infrastructure, R&D, and “next generation reforms”.
The paragraph on nuclear development says: “Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat. Towards that pursuit, our government will partner with the private sector for (1) setting up Bharat Small Reactors, (2) research & development of Bharat Small Modular Reactor, and (3) research & development of newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector.
As well as nuclear, the Energy Security section (paragraphs 72-78 of the 165- paragraph budget) also covers rooftop solar plants; pumped storage projects; development of indigenous technology for Advanced Ultra Super Critical thermal power plants; energy efficiency and emissions targets; and an energy audit of traditional micro and small industries. The budget allocates a total of INR249.69bn ($2.983bn) to the Department of Atomic Energy.
Currently only two government-owned enterprises – Nuclear Power Corporation of Indiua Ltd (NPCIL) and Bharatiya Nabhikiya Vidyut Nigam Limited (BHAVINI – established to build and operate fast reactors) are authorised to own and operate NPPs. India’s Atomic Energy Act of 1962 prohibits private control of nuclear power generation. However, the possibility of involving other public sector and private corporations has been under consideration for some time.
India currently has 23 operable nuclear reactors providing some 7,425 MWe of generating capacity, with seven units currently under construction, including both Indian-designed and Russian-designed units as well as one fast breeder reactor. It has plans for a fleet of Indian-designed and built 700 MWe pressurised heavy water reactors as well as for large reactors from overseas vendors, including further Russian-designed VVER reactors in addition to those already in operation and under construction at Kudankulam in Tamil Nadu.
Indian External Affairs Minister Subrahmanyam Jaishankar, during a visit to Russia in January, signed agreements with Russia for additional units of the Kudankulam and also reportedly discussed SMRs. In August 2023, Minister of State Jitendra Singh told parliament that the government was considering options for SMRs, including possible participation of the private sector and start-ups in such projects.
Earlier this year, government sources said India was planning to invite private firms to invest some USD26 billion in its nuclear energy sector, and holding talks with several private firms to secure investments to support the construction of some 11,000 MWe of new nuclear.
The NITI Aayog (National Institution for Transforming India), which replaced the Planning Commission in 2015, has been urging the government to look at small reactors more seriously. “Private sector being permitted is a big new opening,” says Dr VK Saraswat, Member of Science and Technology at NITI Aayog. “I am very happy to see the government has accepted the further development of small reactors since atomic energy has a very low carbon footprint and offers assured base power supply,” he added. He noted new possibilities have opened and soon “an enabling policy and legal environment can be created to make sure the private sector can also contribute in generating atomic energy”.
Dr Saraswat explained that the Bharat Small Reactor (BSR) refers to India’s 220 MWe, pressurised heavy water reactor (PHWR),16 units of which are already functioning. Now, the private sector will be allowed to partner in this.
Bhuvan Chandra Pathak, Chairman and Managing Director of NPCIL also welcomed the budget. “It is a very welcome move that the private sector will be permitted to partner in the development of atomic energy,” he said. With the private sector being permitted to partner, a whole new avenue of financing these capital-intensive power plants will open up.
As to SMRs, experts at NPCIL say the Bharat SMR can be assembled in less than four years and the rough per megawatt cost could be comparable to the BSR. In the initial stage, the new private sector small reactors may run on ‘Government Owned but Company Operated’ (GOCO) mode with investments coming from the private sector and the fuel being owned by the Department of Atomic Energy and the used fuel also reverting to the government. The design of the BSMR is underway at the Bhabha Atomic Research Centre (BARC), with the expectation that it could also run on natural uranium.
