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What Will Power AI Data Centres?

31 Oct 2025 GS 3 Science & Technology
What Will Power AI Data Centres? Click to view full image

Context

  • Rapid rise of AI, data localisation, EVs, green hydrogen, and 5G is pushing global electricity demand sharply upward.

  • AI data centres are emerging as major energy consumers, driving a push for low-carbon, high-reliability power (including nuclear, renewables, and hydrogen).

Why Data Centres Are Booming in India

  • Driven by:

    • Digital India & data localisation policies

    • 5G & IoT rollout → massive data generation

    • Growing adoption of AI and cloud services

  • India’s capacity: 1.4 GW vs Europe’s 10 GW

  • Expected growth:

    • 2–3x by 2027

    • 5x by 2030 (especially with AI infrastructure)

Energy Demand of AI Data Centres

Type

Power Consumption per Rack

Traditional servers

15–20 kW

AI Data Centres (GPUs)

80–150 kW

  • Global data centre electricity demand:

    • 2024 → 460 TWh

    • 2030 → 1,000 TWh+

    • 2035 → 1,300 TWh

  • China: Data centres may use 400+ billion kWh (4% of total) by 2025, with 18% CAGR (2023–2030).

  • U.S.: Dominion Energy (Virginia) projects >25% rise in total & peak electricity demand in 5 years.

Key Global & Indian Data Centre Locations

  • U.S.: Texas, Wisconsin, Virginia, Phoenix, Ohio, Pennsylvania (Around 51% of global capacity).

  • India:

    • Visakhapatnam (Google)

    • Jamnagar (Reliance)

    • Private players: Yotta, AdaniConneX, Sify, CtrlS → building AI data centres in Mumbai, Chennai, Hyderabad, Bengaluru.

  • Policy push: “IndiaAI Mission” and private investment.

Why Shift Toward Low-Carbon Energy?

  • To meet corporate decarbonisation goals.

  • Energy intensity of AI → utilities may struggle to expand grid fast enough.

  • Regulatory & investor pressure for sustainability.

Emerging Power Solutions for AI Data Centres

Source

Purpose

Renewables (solar, wind)

Clean power (intermittent)

Green hydrogen

Onsite fuel source

Natural gas

Grid reliability

Geothermal

Continuous base power

Nuclear (esp. SMRs)

24/7 stable baseload

Small Modular Reactors (SMRs)

  • Capacity: 1 MW – 300+ MW.

  • Investments: $15.4 billion (public $10B, private $5.4B).

  • Benefits:

    • Scalable and modular → factory-built for cost reduction.

    • Passive safety (less need for external power).

    • 24×7 baseload stability.

    • Reduced transmission cost (can be located near consumption).

  • Challenges:

    • Waste disposal & safety concerns.

    • Regulatory delays and high certification costs.

India’s Nuclear & SMR Strategy

  • Budget 2025: ₹20,000 crore “Nuclear Energy Mission”.

  • Goal:

    • 100 GW nuclear capacity by 2047.

    • At least 5 indigenously built SMRs by 2033.

  • Ongoing R&D:

    • BSMR-200 (Pressurised Heavy Water Reactor) – 200 MW.

    • 55 MW variant for remote/island areas.

  • Reforms proposed:

    • Amend Atomic Energy Act (1962) & Civil Liability for Nuclear Damage Act (2010).

    • Attract $26 billion private investment.

    • Tech partnerships with Holtec International (USA) & others.

SMR Safety Features

  • Passive safety systems (natural convection cooling, automated shutdown).

  • Accident-tolerant fuels → integrity at high temperature.

  • Lower radioactive material → smaller emergency zones.

  • Extended response time → hours/days for mitigation.

Global Regulation & Harmonisation

  • Existing laws designed for large reactors new rules needed.

  • Reform areas:

    1. Tech-neutral frameworks

    2. Simplified fleet licensing

    3. Factory certification

    4. International harmonisation (IAEA NHSI)

    5. Risk-informed zoning

    6. Fast-track deployment

IAEA’s global SMR cooperation framework:

  • SMR Regulators’ Forum → allows countries to share best practices on licensing and safety.

  • NHSI (Nuclear Harmonization and Standardization Initiative) → aims to align global regulatory standards for SMRs.

  • Safeguards by Design → integrates safety, security, and non-proliferation considerations into early design stages.

  • Examples:

    • U.S. ADVANCE Act (2024)

    • Canada’s Vendor Design Review

    • U.K.’s Regulatory Sandbox

  • Target: Frameworks by 2026, first commercial SMRs by 2030.

SMR Transport & Waste Concerns

  • Transport risks: Radiation & liability in accidents.

  • Fuel: New types (e.g., HALEU) may create different waste streams.

  • Storage: Interim on-site storage used; no clear long-term disposal pathway yet.

HALEU is an acronym for High-Assay Low-Enriched Uranium, a nuclear fuel with a uranium-235 concentration between 5% and 20%.

It is intended for use in advanced nuclear reactors, allowing them to be smaller, more efficient, and operate for longer cycles than traditional reactors. Commercial HALEU production is not yet widely available, leading to efforts by governments and companies to build domestic supply chains.


Prelims Practice MCQ

Q. Consider the following statements about Small Modular Reactors (SMRs):

  1. SMRs can be factory-fabricated and deployed in modular units.

  2. SMRs typically range from 1 MW to 300 MW capacity.

  3. SMRs cannot operate independently of a grid connection.

Which of the above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

✅ Answer: (a)

🧾 Explanation:

  • Statement 1 – Correct: SMRs are designed to be factory-built modules, allowing faster, cheaper, and scalable deployment compared to conventional nuclear reactors.

  • Statement 2 – Correct: Their capacity typically ranges from 1 MW (micro SMRs) to 300+ MW, making them flexible for industrial, remote, or AI data centre applications.

  • Statement 3 – Incorrect: SMRs can operate independently of the main grid — especially the smaller variants meant for remote or off-grid areas.

Hence, statements 1 and 2 are correct.

Q. In the context of India’s Nuclear Energy Mission (2025), which of the following is not correct?

(a) The mission aims for 100 GW nuclear capacity by 2047.
(b) India plans to deploy five indigenously manufactured SMRs by 2033.
(c) SMRs in India are expected to be imported from France under the IAEA NHSI.
(d) Reforms include amendments to Atomic Energy Act, 1962 and CLND Act, 2010.

✅ Answer: (c)

🧾 Explanation:

  • (a) Correct: The mission indeed targets 100 GW nuclear capacity by 2047 as part of India’s clean energy goals.

  • (b) Correct: India plans to put five indigenously designed SMRs into operation by 2033.

  • (c) Incorrect: India’s SMR collaboration is with Holtec International (USA) and domestic agencies like BARC, not with France.

  • (d) Correct: The government plans to amend the Atomic Energy Act (1962) and Civil Liability for Nuclear Damage Act (2010) to allow private investment (~$26 billion) in nuclear projects.

Thus, (c) is the incorrect statement.

Q. The International Atomic Energy Agency (IAEA) supports SMR development through which of the following?

  1. SMR Regulators’ Forum

  2. Nuclear Harmonization and Standardization Initiative (NHSI)

  3. Safeguards by Design Programme

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 only

✅ Answer: (c)

🧾 Explanation:

All three mechanisms are part of IAEA’s global SMR cooperation framework:

  • SMR Regulators’ Forum → allows countries to share best practices on licensing and safety.

  • NHSI (Nuclear Harmonization and Standardization Initiative) → aims to align global regulatory standards for SMRs.

  • Safeguards by Design → integrates safety, security, and non-proliferation considerations into early design stages.

Together, these promote safe, harmonised, and rapid deployment of SMRs worldwide.

Hence, all three are correct.



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