(Bloomberg) -- State-run Indian Oil Corp. Ltd. is in preliminary talks with India’s atomic power monopoly to build small nuclear units, an early-stage technology seen as a cost-effective alternative to larger plants.

The refiner and fuel retailer is exploring a partnership with state-controlled Nuclear Power Corp. of India Ltd. to use small modular reactors, or SMRs, in its refineries for clean power, Alok Sharma, Indian Oil’s director for research and development, said at a conference in New Delhi Wednesday.

As several bigger projects face delays, policymakers are promoting small-scale nuclear technology with a capacity of up to 300 megawatts, which is quicker to build and easier to adjust to the requirements of the grid. To boost the nascent sector, the Indian government is considering allowing private firms to manage and operate reactors. 

Besides Indian Oil, state-run power producer NTPC Ltd. and hydrocarbons producer Oil & Natural Gas Corp. Ltd. are among companies exploring opportunities in nuclear. India produces about three-quarters of its electricity from coal, while nuclear accounts for about 3% of the generation.

Globally, only China and Russia have operating SMR units, while some other countries are preparing for their commissioning, the International Atomic Energy Agency said.

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