Demand Drivers: Data center growth in India is fueled by the government’s Digital India and data localization policies, increased data consumption, and the 5G rollout enabling data-intensive technologies like IoT and AI.
Capacity Lag: India has twice the number of internet users as Europe but significantly lags in data center capacity (1.4 GW vs. Europe’s 10 GW).
Projected Growth: India’s data center capacity is expected to grow two to three times by 2027 and over five-fold by 2030 (including large AI infrastructure).
Power Intensity: AI data centers are computational powerhouses utilizing Graphic Processing Units (GPUs), with individual racks consuming 80-150 KW, significantly more than traditional servers (15-20 KW).
Global Impact: Global data center electricity generation is projected to surge from 460 TWh in 2024 to over 1,000 TWh by 2030, with some regions seeing peak demand growth exceeding 25% due to GW-scale data centers.
Locations in India:Visakhapatnam and Jamnagar have been chosen for GW-scale AI data center ambitions by Google and Reliance, respectively. Other plans are underway in Mumbai, Chennai, Bangalore, and Hyderabad.
Small Modular Reactors (SMRs) as a Low-Carbon Power Source
Decarbonization Push: AI data centers are urgently seeking reliable, low-carbon baseload power due to corporate decarbonization targets and soaring energy demands.
Current Power Mixes: Rely on a mix of intermittent renewables, natural gas, developing storage, and emerging alternatives like geothermal and Small Modular Reactors (SMRs).
SMR Advantages: SMRs have caught the attention of Big Tech for their:
Flexible sizing (1 MW to 300 MW).
Factory manufacturing capability for cost savings.
Passive safety enhancements.
24/7 stable baseload power production, eliminating the need for expensive, centralized transmission infrastructure.
SMR Safety: Modern SMR designs use inherent and passive safety systems (like natural convection) to provide secure, reliable energy with a reduced likelihood of core-damaging accidents and smaller emergency planning zones.
Nuclear Mission: India’s budget initiated a Nuclear Energy Mission (₹120,000 crore outlay) aiming for 100 GW of nuclear capacity by 2047 and at least five indigenously manufactured SMRs in operation by 2033. Read more on Nuclear Energy in India
Indigenous Development: Bhabha Atomic Research Centre is developing the BSMR-200 pressurized heavy water reactor and a 55 MW variant for remote areas.
Reforms for Private Investment: The government is planning amendments to the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 to attract an estimated $26 billion in private investment.
Recommendations: India should leverage SMR technology transfer agreements, pre-approve existing coal sites and green hydrogen hubs for nuclear projects, and facilitate collaboration between SMR vendors, AI data center players, and renewable energy companies.
Regulatory and Logistical Challenges
Regulatory Hurdles: Licensing processes, originally designed for large reactors, are time-consuming, expensive, and opaque and often don’t apply to advanced SMR technologies.
Global Regulatory Reforms: Focus on six areas, including a technology-neutral framework, streamlined licensing (fleet approvals), and international harmonization (IAEA standards). Most jurisdictions aim for framework completion by 2026.
Transportation and Waste: Regulations are needed for the security and radiation leakage risks associated with transporting factory-fabricated, fuel-loaded SMRs. New forms of radioactive waste from advanced fuels (like HALEU) require new disposal and storage plans.
