NTPC's Nuclear Ambition: Replacing Coal with Small Modular Reactors

India's National Thermal Power Corporation (NTPC) is making a bold move to transition from coal-fired power plants to small modular reactors (SMRs). This shift is part of a broader strategy to reduce the country's reliance on fossil fuels and meet its ambitious climate goals. The decision comes as India aims to significantly increase its nuclear capacity, from the current 8 GW to at least 100 GW by 2047.



The Economic and Environmental Case for SMRs

NTPC's decision to explore SMRs is driven by both economic and environmental considerations. SMRs offer a more cost-effective and scalable solution compared to traditional large nuclear plants. According to a joint report by the Nuclear Energy Agency (NEA) and the International Energy Agency (IEA), nuclear power, including SMRs, is expected to have the lowest Levelized Cost of Energy (LCOE) among dispatchable low-carbon technologies by 2025, ranging from $55 to $95 per MWh. This makes SMRs more competitive than coal ($100/MWh) and gas ($80/MWh) in the long run.

Moreover, SMRs are simpler in design and can be scaled up to meet demand, making them an attractive option for a country like India, which is rapidly expanding its energy infrastructure. NTPC's tender document highlights the company's intention to identify coal plants that can be retired in the next five years and replaced by SMRs. This phased approach allows for incremental investments, reducing the financial burden on the company.

Policy Support and Foreign Investment

The Indian government's recent amendment to its nuclear liability law has played a crucial role in facilitating this transition. The amendment, announced in early 2025, aims to boost foreign and private investments in the nuclear sector. This change has made India's nuclear market more attractive to foreign firms, which were previously deterred by the strict liability laws.

NTPC has already engaged in talks with foreign firms, including those from Russia and the U.S., to build SMRs. The company's executive director, Prasenjit Pal, confirmed discussions with a Russian company and U.S. firms like Holtec International Corp. This foreign collaboration is essential for technology transfer and funding, as India's nuclear program has historically faced delays and cost overruns.

Challenges and Risks

While the transition to SMRs offers numerous benefits, it is not without challenges. The high initial capital costs of SMRs remain a significant hurdle. Additionally, the technology is not yet proven at scale, and India's strict nuclear liability laws pose legal risks. The country's history of delayed nuclear projects also raises concerns about the feasibility of NTPC's ambitious plans.

Conclusion

NTPC's decision to build SMRs to replace its older coal plants is a strategic move that aligns with India's energy and climate goals. The transition offers long-term economic and environmental benefits but faces significant hurdles, including high upfront costs, reliance on foreign technology, and India's history of delayed nuclear projects. Success hinges on leveraging policy reforms, securing foreign partnerships, and addressing grid infrastructure gaps. If NTPC can navigate these challenges, it could pave the way for a cleaner, more sustainable energy future for India.