In the 2025–26 budget speech, Finance Minister Nirmala Sitharaman announced that India’s installed nuclear power generation capacity will increase from 8,180 MW to 1,00,000 MW (100 GW) by 2047. He also signaled transformative legislative changes, leading to the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (Peace) Bill being introduced and swiftly passed in December 2025.
The scope of the envisaged changes is dramatic. Till now all nuclear activities were under the Department of Atomic Energy (DAE). The PEACE Act promises to transform India’s nuclear energy landscape by bringing in private companies to build, own and operate nuclear power plants, provide statutory status to the Atomic Energy Regulatory Board (AERB), and modify the liability framework to encourage private and even foreign investment. The Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act (CLNDA) of 2010 have been repealed and replaced by the Peace Act (2025).
However, realizing the promise of 100 GW will require putting in place the nuts and bolts of implementation, notification of supporting rules and regulations that are in line with the transformative spirit underlying the Peace Act.
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pushing forward reforms
Two key announcements drive the reforms: a developed India by 2047 and achieving net-zero emissions by 2070. As society moves up the ladder of development, the nature of energy consumption shifts from traditional methods of energy such as firewood, fossil fuels for transportation and heating, and coal to electricity for industry. As a result, the “net zero” target also imposes a parallel shift away from fossil fuel-based electricity generation toward renewable energy and other low-carbon alternatives. In 2024, India’s per capita electricity generation was 1,418 kWh (kilo-watt-hour), compared to 7,097 kWh for China and 12,701 kWh for the United States. The OECD average is just above 8,000 kWh. It indicates how far India has to go to achieve the goal of developed India. The second goal of “net zero” imposes its own conditions. In 2024, India’s per capita energy consumption was 7,893 kWh, indicating that only one-fifth of energy consumption is from electricity.
In June 2025, India’s electricity generation capacity is expected to reach 476 gigawatts (Giga-Watts) and about 50% will be non-fossil fuel sources. Renewable sources are 227 GW, including solar power 111 GW, wind power 51 GW and hydropower 48 GW, with an additional 5 GW from micro-hydraulic projects and bioenergy 12 GW. In addition, nuclear power – which is seen as low carbon and not strictly renewable because it consumes fissile material as fuel – was 8.8 GW. Thermal power, mainly based on coal, is 240 GW. India has committed to increase the installed capacity of renewable energy to 500 GW by 2030. However, installed capacity does not give the full picture. The output of renewable sources depends on the time of day, climate and seasonal conditions, and geography. India generated a total of 1,824 TWh (tera-watt-hours) during 2024-25. Renewable sources include 403 TWh (solar 144 TWh, wind 83 TWh, hydro 160 TWh and bioenergy 16 TWh). Nuclear power generation was 57 TWh while thermal power generation was 1,363 TWh. Therefore, thermal power contributes 75% to the electricity produced with 50% generation capacity, while 50% renewable capacity provides 22%, while nuclear power contributes 3% with 1.8% generation capacity. This is because thermal and nuclear sources provide stable baseload power. To make renewable energy available on a large scale, large investments in energy storage become necessary. This is why renewable energy capacity addition now faces headwinds as 40 GW of projects are stuck without power-purchase contracts.
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India’s nuclear energy journey and options
Conservative estimates indicate that India will need to increase its power generation capacity by more than 2,000 GW to reach developed India levels. Even with more efficient and cheaper battery storage, renewables such as solar and wind farms are about 10 times more land intensive than thermal power plants; Since coal is incompatible with “net zero”, nuclear power remains the preferred baseload means to achieve “net-zero”.
India’s first nuclear power reactor became operational in 1969 at Tarapur. Today, Nuclear Power Corporation of India (NPCIL) is managing 24 nuclear power plants with an installed capacity of 8,780 MW (one reactor at Rawatbhata has been shut down). The two oldest are boiling water reactors (BWRs), two at Kudankulam are Russian designed VVERs (pressurized water reactors or PWRs) and the remaining are pressurized heavy water reactors (PHWRs). The original design was 220 MW; It has been successfully indigenized and adapted into 540 MW and 700 MW designs.
DAE’s budget during the last three years has averaged between ₹24,000 crore and ₹26,000 crore. India’s 700 MW PHWR construction cost is $2 million per MW, the lowest globally for nuclear power. Adding 90 GW over the next two decades would require an outlay of more than $200 billion (₹18 lakh crore), which is possible only with private investment; Both domestic and foreign.
In 2017, the government had given administrative and financial approval to build 10 reactors of 700 MW each in fleet mode, but work has not started. The logic of fleet mode was to streamline production to achieve economies of scale. Three other locations – Jaitapur (Maharashtra), where it is planned to install six reactors of 1,650 MW each based on the French (EDF) design, and Mithi Virdi (Gujarat) and Kovvada (Andhra Pradesh), each of which is planned to install six reactors of 1,000 MW capacity each using Westinghouse-Toshiba and GE-Hitachi designs – have been under consideration for more than a decade. The potential cost of producing electricity from these unproven designs is likely to exceed $5 million per MWh.
Many industries have captive power plants ranging from 10 MW to 200 MW; Most of these are fossil fuel based. The current estimate of installed capacity is 90 GW with plants of 100 MW and above accounting for two-thirds of the capacity. The government has allocated ₹20,000 crore for research and development of five indigenous models of small modular reactors (SMR) of 5 MW, 55 MW and 200 MW capacity by 2033. The indigenous 220 MW PHWR model (15 are currently operational), meanwhile, can be a reliable workhorse. With efficient project management, some amount of modularization and economies of scale, the time from concrete pour to going on stream can be reduced to 40 months. Steel, primary metals, cement, petrochemical and paper industries and now, data centers have shown interest.
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three-front nuclear strategy
Achieving the 100 GW target requires careful planning on three fronts. The EDF and Westinghouse designs are comparatively new and will need to be indigenized to reduce costs. China has demonstrated this by building a supporting industry base and plans to build 33 1,000-MW reactors over 10 years at less than $2 million per MWh. Second, DAE should identify institutions to accelerate research and development for indigenous SMRs, especially molten salt reactor designs. Another research area is the use of thorium cladding with Halleu (high assay low enriched uranium) which may provide an alternative to the breeder reactor route to allow early exploitation of India’s thorium reserves. Third, the indigenous 220 MW PHWR model is set to be modular as an economically viable replacement for many captive power plants; Few Indian private sector companies have the requisite design, construction and manufacturing experience. Since nuclear power generation requires high initial capital costs but low operating costs over a long (60 years) operating life, an appropriate financing model will need to be worked out. The existing exclusion zone rules for multiple reactors at one location will need to be modified for captive single unit reactors.
Conceptually, the PEACE Act attempts to split between strategic and defense-related nuclear activities and civilian power generation; Now, this should be clear in the rules and regulations to be issued. The issues of nuclear energy tariffs, ownership of nuclear fuel, waste management, insurance and liability, dispute settlement mechanisms and an autonomous regulator will need to be settled in a transparent manner. Only then will the Peace Act fulfill its promise.
Rakesh Sood is a former diplomat and currently distinguished fellow at the Council for Strategic and Defense Research
published – April 06, 2026 12:56 am IST
