India’s Data Centres and Small Modular Reactors Growth

India is witnessing rapid growth in data centre demand and nuclear energy innovation. The expansion is driven by digital transformation, AI adoption, and the need for reliable, clean power. Small Modular Reactors (SMRs) are emerging as a key solution to meet energy needs sustainably.

Rising Electricity Demand from Data Centres

India’s electricity demand has grown steadily but is set to accelerate. Data centres, electric vehicles, green hydrogen, and 5G technologies are major drivers. Data centres support digital India policies, data localisation, and AI advancements. India currently has 1.4 GW of data centre capacity, far below Europe’s 10 GW. This capacity may grow two to five times by 2030 due to AI and 5G expansion.

Energy Consumption Challenges of AI Data Centres

AI data centres consume vast electricity, much more than traditional servers. GPUs in AI racks use 80-150 KW each. Globally, data centre electricity use may rise from 460 TWh in 2024 to 1,300 TWh by 2035. China and the U.S. show rapid growth in power demand due to AI infrastructure. This surge pressures grids and demands new energy strategies.

Geographical Spread of Data Centres

The U.S. leads with 51% of global capacity, mainly in Texas and Virginia. Other countries including China, Norway, and the U.K. are also expanding. In India, cities like Visakhapatnam, Jamnagar, Mumbai, Chennai, Bangalore, and Hyderabad are key hubs. Both government missions and private firms fuel this growth.

Shift to Low-Carbon Power Sources

AI data centres aim to reduce carbon footprints. Renewable energy, green hydrogen, natural gas, geothermal, and nuclear fusion are part of the mix. SMRs are gaining attention for providing stable, low-carbon baseload power near consumption centres. They offer flexibility, safety, and cost advantages over traditional reactors.

India’s Nuclear Energy Mission and SMRs

India’s 2025 budget launched a ₹20,000 crore Nuclear Energy Mission targeting 100 GW nuclear capacity by 2047. Five indigenous SMRs are planned by 2033. The Bhabha Atomic Research Centre is developing the BSMR-200 reactor. Legal reforms aim to attract $26 billion private investment and align with global norms. Collaboration with international partners is key.

Safety Features of Small Modular Reactors

SMRs use passive safety systems needing less human input and external power. Smaller cores reduce accident risks and emergency zones. Features include natural convection shutdown, accident-tolerant fuels, and longer response times. These designs enhance secure and sustainable energy supply.

Regulatory Reforms for SMR Deployment

Current nuclear regulations suit large reactors and are unsuitable for SMRs. New frameworks focus on technology neutrality, streamlined licensing, modular manufacturing, and international harmonisation. Countries like the U.S., Canada, and the U.K. are pioneering reforms. The IAEA supports global regulatory cooperation and standardisation.

Transportation and Waste Management Concerns

SMR factory fabrication and transport raise security and radiation risks. Regulations for transport liability and accident prevention are needed. New fuel types may create novel radioactive waste requiring fresh disposal strategies. On-site interim storage is planned, but long-term disposal pathways remain uncertain.

Questions for UPSC:

1. Discuss in the light of India’s energy transition, how Small Modular Reactors can address challenges of grid stability and carbon emissions.
2. Critically examine the role of data centres in India’s digital economy growth and the associated environmental impacts.
3. Explain the importance of regulatory reforms in nuclear energy, and discuss how international cooperation can facilitate the deployment of advanced nuclear technologies like SMRs.
4. With suitable examples, discuss the implications of rapid AI adoption on global electricity demand and the strategies to ensure sustainable energy supply.

Answer Hints:

1. Discuss in the light of India’s energy transition, how Small Modular Reactors can address challenges of grid stability and carbon emissions.

1. SMRs provide stable, 24/7 baseload power complementing intermittent renewables like solar and wind.
2. Compact and modular design allows flexible capacity addition matching grid demand growth and stability needs.
3. SMRs emit near-zero carbon, helping India reduce greenhouse gas emissions and meet climate goals.
4. Factory fabrication reduces costs and construction times, accelerating clean energy deployment.
5. SMRs can be located close to consumption centers, minimizing transmission losses and infrastructure costs.
6. India’s Nuclear Energy Mission targets 100 GW nuclear capacity by 2047, with SMRs playing a key role in decarbonization and grid modernization.

2. Critically examine the role of data centres in India’s digital economy growth and the associated environmental impacts.

1. Data centres support Digital India, data localisation, AI, 5G, and IoT, driving digital economy expansion.
2. India’s data centre capacity (1.4 GW) is low compared to Europe (10 GW), but expected to grow 2-5 times by 2030.
3. AI data centres consume very high electricity (80-150 KW per rack), increasing energy demand.
4. Rising power consumption strains grids and increases carbon footprint unless low-carbon energy sources are used.
5. Shift to renewables, green hydrogen, and SMRs is critical to mitigate environmental impacts of data centre growth.
6. Private investments and government missions like IndiaAI accelerate data centre infrastructure while raising sustainability challenges.

3. Explain the importance of regulatory reforms in nuclear energy, and discuss how international cooperation can facilitate the deployment of advanced nuclear technologies like SMRs.

1. Existing nuclear regulations are designed for large reactors and unsuitable for SMRs’ modular, innovative designs.
2. Regulatory reforms focus on technology-neutral frameworks, streamlined licensing, fleet approvals, and modular manufacturing.
3. International harmonisation (via IAEA standards, NHSI) reduces duplication, accelerates approvals, and ensures safety.
4. Examples – U.S. ADVANCE Act, Canada’s Vendor Design Review, U.K.’s regulatory sandbox promote faster SMR deployment.
5. Global cooperation enables sharing best practices, safeguards integration, and coordinated safety/security standards.
6. India’s legal amendments aim to attract private investment and align with international norms to facilitate SMR adoption.

4. With suitable examples, discuss the implications of rapid AI adoption on global electricity demand and the strategies to ensure sustainable energy supply.

1. AI data centres dramatically increase electricity consumption due to GPU-intensive workloads (80-150 KW per rack).
2. Global data centre electricity use projected to nearly triple from 460 TWh (2024) to 1,300 TWh (2035).
3. China’s data centres show 25% annual growth in power demand, reaching over 400 billion kWh by 2025.
4. U.S. regions hosting large data centres project over 25% demand growth within five years.
5. Strategies include adopting low-carbon power sources – renewables, green hydrogen, SMRs, and emerging technologies.
6. Energy efficiency improvements, regulatory support, and diversified energy mixes are essential to balance AI growth and sustainability.