Research area: Energy Transitions

What do India’s nuclear power ambitions mean for its energy future?

India has set a short-term goal to increase its nuclear power capacity to 22.5 GW by 2032, and a long-term target ambition to reach 100 GW by 2047, as part of its broader strategy to achieve energy independence. In the Budget 2025-26, the Government of India introduced a Nuclear Energy Mission and allocated INR 20,000 crores to develop at least five domestically designed and operational small modular reactors (SMRs) by 2033. These ambitions represent a strategic shift, positioning atomic energy as an integral component of India’s 21st century energy portfolio and a vital driver of economic growth towards realising Viksit Bharat (Developed India) by 2047.

Nuclear energy, a symbol of scientific prowess in the mid-20th century, has been an important part of the global electricity mix for the last five decades. It accounted for about one-fifth of global electricity generation in the 1990s, subsequently plateaued, and currently accounts for just below one-tenth of global electricity (see Fig. 1). Yet, it is the second largest source of clean energy after hydropower (see Fig. 2).

Despite a long history of initiatives, ambitious promises, and consistent public spendings, nuclear power currently accounts for less than 2% of India’s total electricity capacity and about 3% of overall generation – a meagre share compared to other major economies (see Fig. 3). Achieving the 2047 targets will require a 12-fold increase in installed capacity. What drives the renewed push for nuclear energy? How does this align with India’s energy transition goals? What are the challenges to realising this ambition?

Fig 1: Nuclear Power Generation, India & World (terawatt hours – TWh). Source: Our World in Data

Fig 2: Electricity Generation by Source, World (TWh). Source: Our World in Data

Fig 3: Share of Nuclear Power in Electricity Generation by Country, 2023. Source: IEA

The return of nuclear power

Lately, there has been a renewed global momentum behind nuclear power. In COP28 (2023), 25 countries (with about two-third of global nuclear energy capacity) signed a declaration pledging to triple nuclear energy capacity globally by 2050 to limit global warming. Subsequently, the United States has unveiled a plan to add 200 GW nuclear capacity by 2050 and Sweden has launched a roadmap for 25 GW additional nuclear capacity by 2035. Even countries that have an uneasy past with nuclear energy, such as Japan and Germany, appear to be pivoting back. The European Union green taxonomy has labelled nuclear power as green – environmentally sustainable energy source – as long as it is used to replace dirtier fossil fuels such as coal and oil. The World Bank has recently put an end to the ban on funding nuclear power.

The first major push for nuclear power occurred during an energy supply crisis – the oil crises of the 1970s. After half a century, the resurgence of interest in nuclear power is largely driven by exceptional growth in energy demand alongside increasing pressures to decarbonise energy consumption. Global electricity demand is rising fast, not only for conventional end-uses (lighting and thermal comfort) and energy switch (transport electrification), but also for new demands from data centres, cryptocurrency, and artificial intelligence. The earlier assumption about the global energy demand trajectory – that developed economies have already peaked energy demand and can taper their energy consumption for climate action – is proving wrong. Additionally, the escalation of geopolitical conflicts, exemplified by the Ukraine-Russia conflict and its impact on the global energy supply chain, has re-emphasised the importance of national energy security as a priority. Consequently, there is an emerging global policy shift that puts national energy security first, making space for nuclear power as a key solution for energy security and decarbonisation.

India’s current nuclear ambition might be influenced by the global hype, but it is not abrupt. While championing a rapid global transition to renewable energy (RE), India’s own energy transition goals have always been pursued within the broader framework of its domestic energy security, with an all-of-the-above approach to capacity addition. Responding to the demand surge in recent years and economic growth aspirations, India is doubling down on RE, hydro, coal, and nuclear simultaneously.

India’s current nuclear ambition represents a significant shift in approach from its previously protected and public-funded nuclear programme. First, the Atomic Energy Act was amended to enable Nuclear Power Corporation of India (NPCIL) to form joint ventures (JVs) with other public sector undertakings (PSUs) for setting up nuclear power plants. The expectation is that the PSU partner will bring investible surplus capital, while the NPCIL brings nuclear expertise and keeps a controlling stake. NPCIL has launched JVs with Indian Oil Corporation, NALCO, and NTPC. Second, the government is planning to amend the laws to open nuclear energy to private and foreign players. The private sector is expected to advance technological upgrades, fill the finance gap, and address time and cost overrun challenges, and thus, make nuclear power cost competitive. Third, keeping with the global trend, India is also betting heavily on SMRs (16 MW – 300 MW size) through the Nuclear Energy Mission. SMRs promise to have a short gestation period, better upfront capital cost affordability, and fit for captive use and co-generation for industrial decarbonisation. Finally, India seeks to boost domestic capacity by designing indigenous reactors to avoid risks of import dependency.

India’s current nuclear promises are based on two recent studies. An IIM Ahmedabad study (supported by the Principal Scientific Advisor to the Government of India and NPCIL) suggests that an energy mix with half of the electricity generated from nuclear power is the most likely scenario to achieve the lowest levelised cost of electricity in 2070, while meeting India’s net-zero targets. Another study by Vivekananda International Foundation makes similar projections for nuclear energy. Both studies emphasise the promise of nuclear power to be the most cost-effective and low-carbon option for baseload generation that can power India’s ambitious economic growth trajectory.

How does nuclear power fit into India’s energy mix?

India faces the challenge of meeting growing energy demand while reducing its reliance on fossil fuels to achieve net-zero emissions. Is nuclear power a suitable alternative to reduce India’s dependency on coal? Will nuclear power complement India’s ambitious plan for RE or compete with it? To answer these questions, we need to understand the comparative advantages of nuclear and RE as clean energy options.

1. Dispatchability: RE generation is intermittent, and requires complementary energy storage to be dispatchable — where output can be adjusted to meet variable demand. Planning for seasonal variations in RE generation and exposure to extreme weather events requires oversizing both RE and storage capacity. The practicality of large-scale storage solutions required for a complete shift to RE are currently unclear.

Nuclear power is advocated as an alternative clean and dispatchable energy source. Though nuclear power plants are often designed to run at full capacity to meet baseload, they can also be designed to ramp up or down at a rate of 3 to 4% of plant capacity per minute.

2. Cost competitiveness: Cost projections are optimistic for both RE-plus-storage and nuclear power. Solar-plus-storage bids have come at INR 3.10 – 3.50/kWh (with limited storage), and 100% reliability is estimated to cost below INR 6/kWh. RE-plus-storage price is on a declining trend.

The IIM Ahmedabad study projects nuclear power cost at INR 2.76 – 3.60/kWh (at 2020 constant price) in 2070 (Average tariff of nuclear power in India was INR 3.83/kWh in 2023-24.). Nuclear projects are often affected by time and cost overruns, resulting in high tariffs. Advocates argue that nuclear power could be made cost competitive by managing indirect costs during the construction period. Critics point out uncertainties in predicting future cost of nuclear power.

3. Modularity: RE technology is modular, which allows deployment at a faster pace and varied scale. Traditional nuclear power has been very large, with higher cost and geographical requirements. SMRs are being designed to bring modularity through factory fabrication, which in turn will address time and cost overruns, and unlock nuclear power from large capital requirements. While RE, particularly solar, is an option for small consumers (household, commercial and farm use), SMRs, if successful, could fit for captive use by energy intensive industries.

4. Land intensity: As RE projects are land intensive, land acquisition and use are emerging as concerns in RE transition. India is already experiencing early land conflicts in case of RE projects. Even though nuclear power has specific geographical requirements, it is still considered the most land efficient among various energy technologies (see Fig. 4). SMRs used for captive use may further reduce land requirement.

5. Safety: Safety risks associated with nuclear power have been a major reason for public resistance and have caused slowdown in capacity expansion in the last two decades. Radiation leaks and exposure to natural disasters have led to nuclear accidents in the past. The risks are even higher for SMRs, as they tend to produce more voluminous and radioactive wastes. Lack of proper waste disposal infrastructure and robust regulatory safeguards heightens the risks.

RE waste also has potential toxic impacts on human and environmental health. However, studies estimate that RE (wind and solar) waste will still be less voluminous compared to coal and other wastes in 2050. A substantial part of RE waste could potentially be recycled. Rising concerns over RE waste and scarcity of materials and critical minerals are likely to boost the imperative for circularity in the RE supply chain.

Fig 4: Land use of energy sources per unit of electricity. Source: Our World in Data

Key challenges to realise India’s nuclear ambition

Nuclear power promises to be a complementary option for India’s 21st century energy portfolio. While its dispatchability and projected cost-competitiveness makes it an option for coal substitutions, potential for faster ramp-up and ramp-down makes it a complement to variable RE. However, nuclear power has to pass many tests before it can deliver on its potential.

– Social legitimacy: Risk perceptions associated with nuclear radiation have been a barrier to nuclear power projects in India and globally. The first test would be to gain social legitimacy through effective regulatory and enforcement mechanisms for secure waste management, better risk management, and public awareness.

– Finance & private sector participation: Nuclear power requires larger capital investment than its alternatives. India’s nuclear ambitions rely on the effective mobilisation of capital, which would be consequential to its cost competitiveness and pace of development. The scale of investment requires private capital and private sector participation, which could be unlocked through enabling regulations, policy certainty and risk sharing. The Government of India is already planning necessary legislative reforms and the private sector has shown keen interest.

– Domestic manufacturing: Nuclear power expansion requires heavy engineering manufacturing capacity. While this is a constraint with limited capacity in India (dominated by players like Larsen & Toubro, Bharat Heavy Electricals Ltd. and Bharat Forge Ltd.), it is also an opportunity to boost domestic capacity and reduce dependency on global equipment supply chains.

– Fuel supply security: Expanding nuclear capacity requires a strategic uranium fuel reserve to maintain supply chain resilience. India relies on Kazakhstan and Russia for additional uranium fuel due to insufficient domestic supply. Its historical three phase programme has always been on a path towards making thorium reactors viable, thereby utilising a fuel source which is available in abundance in India. While thorium reactors are yet to be deployed commercially, China built the world’s first operational (experimental) thorium reactor in April 2025. India’s prototype fast breeder reactor in Kalpakkam is yet to be commissioned.

– SMRs: SMRs are a promising option for flexible electricity generation and specific end-uses. Globally, there are more than 80 SMR designs and concepts at various developmental stages. India is also investing in SMR technology. The maturity of this technology will have significant implications for India’s nuclear development.

– Exposure to climate hazards: Existing and new nuclear power plants are susceptible to rising climate-related extreme weather events, including heatwaves, droughts, sea-level rise, altered precipitation patterns, and storms. In 2025, several nuclear power plants in Europe reduced operations or temporarily shut down due to heatwaves. The cooling water reached temperatures that were not suitable for effective cooling processes. Adaptation strategies and enhanced safety measures could help address these risks, though they may require additional costs and time.

If India can address these challenges, nuclear power may help reduce its reliance on coal. However, it is not a substitute for its RE pursuits. India has to be mindful that capital requirements for nuclear energy do not cannibalise RE investments. Rather, as nuclear power gestation period is longer, India must double down on RE deployment to meet the interim demands. Besides, India has to plan carefully for potential geopolitical instabilities (like USA’s attack on Iran’s nuclear sites) and its implications for pace of development, fuel supply security, and thus, for its energy independence goal. Overlooking these challenges may render nuclear power an expensive and hazardous distraction in the 21st century energy transition.

Is net zero net positive? – Opportunities and challenges for pursuing a socio-economically sensitive net-zero transition for India

Abstract

At COP26 in Glasgow, India announced a long-term ambition to achieve net-zero greenhouse gas emissions by 2070. Existing emissions-economy modelling studies highlight that India’s emissions show no sign of peaking before mid-century and will not reach net zero by 2070 in a business-as-usual scenario with current policies. Using a mixed methodology of expert elicitation and system dynamics modelling, this article examines the policy gap that needs to be bridged for India to realize its net zero by 2070 commitment. The study discusses a socio-economically sensitive policy mix that could set India on a trajectory to peak its emissions in a decade and zero out its carbon dioxide (CO2) emissions by mid-century, leaving about one gigaton of other greenhouse gases to be decarbonized by 2070 to meet India’s net-zero goal. The policy mix realizes this goal while maintaining the government’s fiscal stability, and increasing employment and GDP beyond business-as-usual. The trajectory reported here is one of many possible low-carbon development pathways that could potentially be a net socio-economic positive for India. However, barriers such as the country’s lack of clean energy innovation and industrial policies, the gap between its domestic manufacturing capacity and deployment requirements, individual sector readiness for decarbonization, and the distributional implications of government revenue shifts through the energy transition remain significant challenges that need to be addressed to realize these potential socio-economic benefits of decarbonization.

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The Regulatory and Market Landscape for Climate Finance Into India’s Renewable Energy Sector

Executive summary

India’s clean energy landscape has developed rapidly over the last decade, enabled by an improving policy and regulatory architecture. Nevertheless, challenges remain that have impacted the scale and direction of climate finance flows to this sector, particularly from international sources. As India aims to further ramp up the pace of its RE deployment, both large- and small-scale, this brief analyzes these challenges from regulatory, institutional mandate, coordination and market development angles, and explores ways to address them.

Based on a literature review and 13 expert interviews in the large scale renewable energy, rooftop solar, and energy efficiency sectors, we find that regulatory challenges are relatively minor in the large scale RE sector, and that this may cause international funders to channel finance accordingly. In other words, the established governance structure facilitates a relatively easy flow of climate finance. On the other hand, the small scale renewables and energy efficiency sectors have received comparatively less policy support, and a lack of awareness and scale contributes to considerably less funding flowing to these sectors.

Overall, while the government has an important role to play in continuing to improve the policy and regulatory environment for clean energy finance – including international flows into the country – there is an equal role for funders to adapt their funding processes and scopes to the domestic context. Harmonizing these parallel efforts will require improved coordination between the various actors, including through more defined processes for consultations within the overall institutional architecture for climate action in India.

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Energy Transitions Preparedness Initiative: Buildings Sector

Executive Summary

  • India’s buildings sector will play a critical role in meeting the country’s climate targets while promoting resilient cities (IEA 2021b). Buildings also represent the demand side of the energy transition, which is otherwise generally dominated by discourses on the supply side. The sector is undergoing clean energy transition while also contributing to it. Urgent political attention and coordinated action between national and sub-national actors across the buildings value chain are needed if energy transition goals must be achieved in a cost-effective and timely manner.

  • The Energy Transition Preparedness Initiative (ETPI) provides a framework to study and understand state-level plans, actions, and governance processes towards energy transition. The framework covers multiple themes in 24 indicators, representing crucial aspects of energy transition in the electricity, buildings, and transport sectors. The buildings sector covers many themes across five indicators.

  • Buildings are a state subject and therefore energy transition actions in the sector must be studied at the state level. Evidence suggests that buildings are contributing to national and state-level energy transition goals in many ways. There are examples of effective and ambitious policy initiatives with varying scales of action to facilitate transition. Despite the progress, greater efforts are required to implement stated policies in order to achieve the sector’s transition objectives.

  • This study aims to understand the energy transition preparedness of the buildings sector of 10 states in India and highlights good examples from the states. Drawing on information available in the public domain, it sheds light on the level of energy transition preparedness in these states for FY 2020-21.

  • This report studies energy transition preparedness across multiple states, facilitates cross learning between them, and promotes adoption of approaches suitable to their specific contexts.

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SFC Perspectives on Adaptation and Resilience, Climate Policy, Energy Transitions, and Environmental Governance and Policy

Overview

SFC Perspectives are intended to stimulate discussion by providing an overview of key issues and avenues for action to inform India’s sustainable development trajectory.

Read our Perspectives on:

1. Adaptation and Resilience: Building systems that allow India to adapt to climate impacts (by Aditya Valiathan Pillai and Tamanna Dalal)
2. Perspectives on Climate Policy: Embedding a development-centric, climate-ready approach to policymaking (by Aman Srivastava, Easwaran J Narassimhan and Navroz K Dubash)
3. Enabling the Energy Transition: Technology, politics & institutions in India’s energy system (by Ashwini K Swain, Sarada Prasanna Das, Suravee Nayak, Catherine Ayallore and Navroz K Dubash)
4. Perspectives on Environmental Governance and Policy: Systemic transformations to limit the health burden of air pollution (by Bhargav Krishna, Shibani Ghosh, Arunesh Karkun and Annanya Mahajan)

Enabling the Energy Transition: Technology, politics & institutions in India’s energy system

Introduction

India must build a 21st century energy system while simultaneously grappling with 20th century problems of energy access, operational inefficiencies, and financial leakages in electricity distribution. Unlike industrialised economies which are in a position to taper their demand, India needs to expand energy use to fuel economic growth and social aspirations. How India chooses to meet its future energy demand – how it produces and consumes energy – is consequential for India’s development future, but also the global energy transition.

India has positioned itself as a frontrunner in the energy transition by setting ambitious near-term targets for clean energy to contribute toward the long-term pledge of net-zero emissions by 2070. Its domestic energy targets include 500 GW non-fossil energy generation capacity, inclusive of 450 GW of renewable energy (RE), and renewable purchase obligations (RPOs) – a de facto generation target – of 43% to be met by 20302. Besides, as part of its G20 presidency, India mobilised a consensus to triple RE capacity and double energy efficiency globally by 2030, subsequently reflected in the Dubai Declaration.

The transition from fossil fuel to RE comes with the potential for energy self-sufficiency, a promise of low-cost power to meet welfare demands, and an opportunity for competitive, job-creating and green industrialisation. However, these opportunities are neither automatic nor free of costs. While an affordable, cleaner, greener, job-creating energy future beckons, the path from here to there will be disruptive, likely creating losers who have an incentive to slow-down changes, potentially risking stability of energy supply, and will depend on far greater finance and infrastructure investments. 

The technology shift that undergirds India’s energy transition will need to be accompanied by foundational institutional changes. Tapping the potential of RE depends on clear and coherent plans, institutional capacities, and governance processes that enable the unwinding of lock-ins to incumbent technologies, and create space for new and emerging technologies. Managing likely disruptions and enabling the transition requires fundamental shifts in politics and institutions in Indian energy along with adoption of new technology.

Our research and engagements at the Sustainable Futures Collaborative (SFC) focus on rethinking the configuration of technology, politics and institutions in Indian energy as a necessary complement to techno-economic solutions for enabling the transition. To explain the configuration and suggest priorities for change, we focus on three interlinked areas: the economic viability of electricity distribution, subnational preparedness, and just energy transition.

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Uneven and Combined Development and the Politics of Labour in an Eastern Indian Coalfield: Shifts and Changes from Late Colonialism to Neoliberalism

Introduction

Trotsky’s notion of uneven and combined development has been discussed extensively in the literature on extractive industries in the Global South. The debates originated in studies on Latin America but they are equally relevant for any other country of the Global South. In the Indian context, the development of extractive industries such as coal mining rests on, reproduces and constantly re-combines unevenness between India and other countries as well as within the country. This was the case when large-scale industrial mining began in India during the colonial period, primarily for railways, such as the East Indian Railway, and for local industries and export trade (Ghosh 1977). Mining continued to set the trajectory after the country gained Independence in 1947, when the state expanded the extraction of coal to feed its ambitious project of rapid industrialization in the name of ‘development’. Both, the ‘temples of modern India’ – as the first Prime Minister Nehru called the large integrated steel mills – and the large coal mines were concentrated in the subnational states in central and eastern India, such as Odisha, Jharkhand (formerly part of Bihar) and Chhattisgarh formerly part of Madhya Pradesh) (Das 1992; Adduci 2012; Adhikari and Chhotray 2020). As is well known, the expansion of open-cast coal mines entailed a plethora of environmental degradation as well as the large-scale dispossession and displacement of usually marginal agriculture-based communities and the dismantling of their agrarian structure (Nayak 2020; Noy 2020). The changing industrial policies since Independence also re-created and re-combined unevenness in the labour regimes, first by expanding the formalization of the erstwhile almost exclusively casual mining labour forces and later on by re-informalizing them.

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