Nuclear Energy for Data Centres in India
The Indian government is considering using nuclear energy to power the growing demand for data centres, driven by artificial intelligence (AI) advancements. The IT Ministry is exploring the deployment of Small Modular Reactors (SMRs) for a reliable and carbon-free power supply as part of a national data centre policy.
Energy Demand and Challenges
- Data centres have a massive energy demand, with electricity usage possibly doubling by 2026, as per the International Energy Agency (IEA).
- Significant players like Google and Microsoft are already collaborating with nuclear power plants to meet this demand.
- Key costs for data centres include:
- 40% of capital expenditure (capex) goes towards electrical systems.
- 65% of operating costs are due to electricity consumption.
- Setting up 1 MW of data centre capacity costs between Rs 60-70 crore.
Market Potential
- India's data centre market is valued at $10 billion, with $1.2 billion generated in FY24.
- By 2027, India is expected to add 795 MW of new capacity, reaching a total of 1.8 GW.
Renewable vs. Nuclear Energy
- While renewables are preferred, nuclear provides a clean, round-the-clock power source.
- SMRs, with capacities of 30MWe to 300 MWe, are seen as crucial for addressing AI and data centre energy needs.
Global and National SMR Developments
- Operational SMRs include Russia's Akademik Lomonosov and China's HTR-PM.
- India aims to enter the SMR manufacturing value chain to support its clean energy transition and foreign policy.
Legislative and Policy Changes
- The Civil Liability for Nuclear Damage Act, 2010 poses challenges for foreign equipment vendors due to liability issues.
- Proposed amendments aim to:
- Allow private companies in nuclear power operations.
- Enable foreign companies to hold minority equity in new nuclear projects.
- These changes are part of leveraging the Indo-US civil nuclear deal and broader trade agreements.
The Indian government is committed to passing these legislative amendments to facilitate the integration of nuclear energy into the data centre ecosystem.
