Why rising project costs for nuclear power matter for India’s clean energy plans
Cost estimates for the four new Russian-designed reactors being added at the Kudankulam Nuclear Power Plant (KKNPP) in Tamil Nadu have risen sharply, with reports putting the increase at around 55% over previous estimates, driven largely by construction delays linked to the Russia-Ukraine war disrupting supply chains and project timelines.
The cost escalation has been uneven across units, with some reactors seeing a steeper rise than others, reflecting differences in equipment sourcing and construction stage at the time delays hit.
Higher capital costs push up the per-unit tariff of electricity from these reactors, creating a affordability challenge in India's price-sensitive power market, where nuclear power must compete with cheaper renewable and thermal sources.
The episode has renewed debate on India's broader nuclear expansion strategy, including diversifying reactor suppliers, accelerating indigenous reactor designs, and opening the sector to greater private and state participation to reduce dependence on any single geopolitical supply chain.
The development is being read as a case study in how global geopolitical shocks can directly raise the cost of domestic clean-energy infrastructure, complicating India's net-zero and energy-security planning.
Kudankulam Nuclear Power Plant and India-Russia Nuclear Cooperation
KKNPP, in Tirunelveli district, Tamil Nadu, is being built in collaboration between the Nuclear Power Corporation of India Limited (NPCIL) and Russia's state nuclear corporation Rosatom (through Atomstroyexport), under an inter-governmental framework dating to a 1988 agreement, updated over subsequent decades. It is envisaged as a six-unit plant using VVER-1000 pressurised water reactors (Russian PWR design), each with a gross capacity of about 1,000 MW.
Key Details
- Units 1 and 2 (each ~1,000 MW) are already in commercial operation, having been commissioned in December 2014 and March 2017 respectively.
- Units 3-6 (also ~1,000 MW each) are at various stages of construction/pre-commissioning, and would take total plant capacity to about 6,000 MW once complete.
- KKNPP is one of the largest single nuclear power sites in India and a flagship of India-Russia strategic and civil nuclear cooperation.
The reactors whose costs have risen are the newer Units 3-6 at Kudankulam — their construction was delayed by nearly three years due to the Russia-Ukraine war disrupting Russian equipment supply and engineering support, directly inflating project costs.
India's Nuclear Capacity Expansion Roadmap (100 GW by 2047)
India's current installed nuclear capacity is around 8.8 GW, a small fraction of its total power mix. The government has set a target of reaching 100 GW of nuclear capacity by 2047 (the year of the "Viksit Bharat" @100 vision) as part of its broader net-zero-by-2070 pathway, to be achieved through a phased mix of NPCIL-led Pressurised Heavy Water Reactors (PHWRs) and Light Water Reactors, plus a later phase opening the sector to private players, joint ventures, and indigenous Small Modular Reactors (SMRs).
Key Details
- India's installed nuclear capacity stood at approximately 8.8 GW as of 2026, expected to rise to about 22 GW by 2031-32 from projects already under construction.
- The government's roadmap envisages roughly 54 GW from NPCIL-led projects (indigenous PHWRs plus LWRs) and the remaining approximately 46 GW through wider participation, including private and state-level players.
- The government has also targeted operationalising at least five indigenous Small Modular Reactors by 2033 as a parallel track to large reactor projects.
Cost overruns at Kudankulam illustrate the execution risk in the large-reactor, import-dependent portion of this roadmap, strengthening the policy case for diversifying toward indigenous reactor designs and SMRs that are less exposed to single-country geopolitical disruption.
Legal-Institutional Framework: Atomic Energy Act and the 2025 Reform Bill
Nuclear power in India has historically been a government monopoly under the Atomic Energy Act, 1962, which vests control over atomic energy activities in the Central Government, implemented through the Department of Atomic Energy (DAE) and its public sector arm, NPCIL. Private and foreign investment in nuclear power generation has been barred. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025 (introduced in Parliament in December 2025) proposes to replace the 1962 Act and amend the Civil Liability for Nuclear Damage Act, 2010, allowing private and joint-venture participation (with a proposed cap around 49% for certain private entities) and easing liability norms to attract investment.
Key Details
- The Atomic Energy Act, 1962 restricted nuclear power generation to government entities; the 2025 Bill is the first major legislative move to open the sector to private capital.
- The Civil Liability for Nuclear Damage Act, 2010 governs compensation liability in case of a nuclear incident; its liability provisions have historically been cited by foreign reactor suppliers as a barrier to investment in India.
- The 2025 Bill was passed by the Lok Sabha in December 2025 with amendments, as part of the push toward the 100 GW-by-2047 target.
Rising costs on Russian-supplied reactors add urgency to the legislative push for private participation and supplier diversification, since spreading nuclear capacity addition across more players and reactor types reduces India's exposure to cost and schedule risk from any single foreign supply chain.
- Cost estimates for Kudankulam's four new reactors have risen by around 55% due to delays linked to the Russia-Ukraine war.
- KKNPP Units 1 and 2 (each ~1,000 MW) are commercially operational since December 2014 and March 2017; Units 3-6 (also ~1,000 MW each) will take total capacity to about 6,000 MW.
- India's installed nuclear capacity is about 8.8 GW (2026), targeted to reach 100 GW by 2047, with an interim milestone of about 22 GW by 2031-32.
- The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025 proposes to replace the Atomic Energy Act, 1962 and amend the Civil Liability for Nuclear Damage Act, 2010 to permit private participation.