As the global artificial intelligence (AI) boom accelerates, India is taking proactive steps to address the growing energy demands of data centers that power this technological revolution. Recognizing the critical role data centers play in AI development and deployment, the Indian government is crafting a roadmap to ensure a sustainable and sufficient power supply for these facilities. This initiative, spearheaded by the IT Ministry, aims to make computing capacity more accessible for smaller entities such as start-ups and research institutions, thereby fostering innovation and inclusivity.
Collaborations Across Ministries
The Ministry of Electronics and Information Technology (MeitY) is engaging with the Ministries of Power, New and Renewable Energy, and other relevant agencies to address the pressing need for a robust energy infrastructure. Speaking on the matter, IT Secretary S. Krishnan highlighted the pivotal role of power availability in enabling AI adoption. “The biggest question today is the availability of power… As we adopt AI more and more, do we have enough power supply to sustain this growth?” Krishnan remarked, emphasizing the importance of a reliable power framework.
The energy-intensive nature of data centres, coupled with the surging demand for AI-powered solutions, underscores the urgency of this initiative. According to the International Energy Agency, data centre electricity consumption could double by 2026, presenting a formidable challenge for companies striving to achieve net-zero or carbon-negative goals by 2030.
Global Context and Local Aspirations
Global tech giants like Google and Microsoft have begun securing power deals with nuclear energy providers to meet their data centre requirements sustainably. In India, the government is leveraging the AI boom by exploring subsidies to support data centre development. This approach not only aims to reduce barriers for start-ups and research entities but also positions India as a competitive hub in the global data economy.
A recent report by S&P Global revealed that India boasts a leased data centre capacity of 1–3 GW, the highest among emerging markets like Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. Most of this capacity is concentrated in Mumbai (55%), with Delhi-NCR and Chennai accounting for around 12% each. Projections by Savills, a real estate consultancy, anticipate an additional supply of over 2,000 MW of data centre capacity between 2024 and 2028.
Addressing Energy Costs and Infrastructure Challenges
Energy consumption represents a significant portion of data centres’ operational and capital expenditure. According to CareEdge Ratings, electrical systems account for 40% of data centre capital expenditure, while electricity consumption constitutes approximately 65% of operating costs. Establishing one megawatt (MW) of data centre capacity in India costs between ₹60–70 crore, further highlighting the financial challenges tied to power supply.
To mitigate these challenges, India is focusing on integrating renewable energy sources into its data centre ecosystem. For example, Adani Group plans to supply 61 MW of renewable energy from its solar-wind hybrid project in Gujarat to Google’s cloud operations in India. Similarly, Tata Power Company is developing two pumped storage plants (PSPs) near Pune with a combined capacity of 3,000 MW. These facilities aim to cater to the growing power demands of data centres in Mumbai, starting January 2027.
Planning for the Future: Grid and Load Management
The Central Electricity Authority (CEA) and other national agencies are closely monitoring the anticipated surge in power demand from data centres. During an October meeting of the National Committee on Transmission (NCT), the CEA directed its Power Data Management and Load Forecasting Division to study the unique load patterns associated with data centres. This decision followed an incident in June when a grid event in North India led to a significant load reduction of approximately 16.5 GW.
As data centres increasingly connect to the Inter-State Transmission System (ISTS), experts stress the importance of reactive power compensation near these load centres. Such measures are crucial for maintaining voltage stability and preventing grid failures, ensuring uninterrupted power supply for high-demand facilities.
Improving Energy Efficiency in Data Centres
Energy efficiency remains a top priority for data centre developers in India. A key metric for this is the Power Usage Effectiveness (PUE) ratio, which measures the energy efficiency of a data centre. The average PUE for Indian data centres is around 1.9, while green data centres, designed with sustainability in mind, achieve a lower PUE of 1.3. These improvements not only reduce operational costs but also align with global sustainability standards.
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sustainable power supply to AI-driven data centres
India’s roadmap for ensuring sustainable power supply to AI-driven data centres reflects its commitment to harnessing the potential of artificial intelligence while addressing the associated challenges of energy consumption and infrastructure. By fostering collaborations between ministries, incentivizing renewable energy adoption, and investing in advanced energy-efficient technologies, India is positioning itself as a leader in the global data economy. This initiative not only supports the country’s burgeoning AI ecosystem but also reinforces its commitment to sustainable development and energy security in the face of rising technological demands.