The Scale of India’s Data Explosion
India's appetite for data is staggering. Driven by rapid cloud adoption, the rollout of 5G, and a surge in AI development, the country's data centre market is undergoing explosive growth. The installed capacity has quadrupled in recent years, jumping
from 375 MW in 2020 to around 1,575 MW today. Projections show this is just the beginning. Forecasts suggest India's data centre capacity could surge from around 1.6 GW in mid-2026 to as high as 10 GW by 2030. This expansion is attracting billions in global investment and is essential for powering India's goal of a USD 1 trillion digital economy. But this digital backbone comes with a significant physical footprint, demanding enormous resources to build and operate.
The Hidden Environmental Cost
Data centres are immensely thirsty for two critical resources: electricity and water. The cooling systems required to prevent servers from overheating are particularly intensive. A single 20 MW data centre can consume about 1.4 million litres of water daily. With projections showing India's total data centre water consumption could reach over 150 billion litres annually, this poses a major challenge, especially as many facilities are located in already water-stressed cities like Chennai, Mumbai, and Bengaluru. The energy demand is equally daunting. The power required for data centres is expected to reach 17 GW by 2031-32. Without a focus on green energy, this could increase reliance on fossil fuels and jeopardise India's net-zero emissions targets.
What Makes a Data Centre 'Green'?
Sustainable data centre design is about much more than just using renewable energy. It involves a holistic approach to efficiency. A key metric is Power Usage Effectiveness (PUE), which measures how much energy is used by the computing equipment versus for overheads like cooling. While a perfect score is 1.0, some Indian operators are achieving ratios as low as 1.3, better than the global average. Advanced cooling technologies are crucial. Innovations like direct-to-chip liquid cooling, immersion cooling, and adiabatic cooling can drastically reduce both energy and water consumption. Other strategies include using recycled water, implementing modular designs to reduce construction waste, and ensuring the entire carbon cost, from construction to disposal, is accounted for.
India's Unique Challenges and Solutions
India faces a unique set of hurdles, including unreliable grid power in some regions and a domestic supply chain for green technology that is still maturing. However, these challenges are also driving innovation and policy change. The government is promoting sustainable growth through various schemes, including the Green Energy Corridor and the National Green Hydrogen Mission. Several states, including Maharashtra, Tamil Nadu, and Uttar Pradesh, have introduced their own data centre policies, offering incentives like subsidies and streamlined approvals for facilities that use renewable energy. Some states are even mandating green practices. Andhra Pradesh, for instance, has set a rule that new data centres must source at least 70% of their power from renewable sources and is incentivising operators to build their own desalination plants to avoid straining local water supplies.
