Government Promotes Sustainable Growth of Data Centres through Energy-Efficient and Clean Energy Measures

Executive Summary This report outlines the Indian government's strategy to ensure the sustainable growth of the data centre industry through clean energy and energy-efficient measures. Driven by AI and high-performance computing, data centre power demand is projected to reach 17 GW by 2031-32, necessitating the adoption of renewable energy and advanced resource management. Key actions include the implementation of new efficiency standards, the enactment of the SHANTI Act for nuclear energy, and the expansion of infrastructure into new investment destinations.

Key Points / Main Content

• Industry Expansion and Capacity:

  • Data centre capacity has grown from 375 MW in 2020 to approximately 1575 MW currently.
  • While majorly located in hubs like Mumbai, Chennai, and Delhi NCR, the industry is expanding into Andhra Pradesh, Madhya Pradesh, Chhattisgarh, and West Bengal.
  • Data centres currently account for less than 1% of the country’s installed power capacity, but demand is expected to scale significantly by 2031-32.

• Renewable and Clean Energy Initiatives:

  • The government is promoting renewable energy through the Green Energy Open Access Rules, Green Hydrogen Mission, Solar Park Scheme, and Offshore Wind VGF Scheme.
  • The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act was enacted to provide clean power for AI and data centres via Small Modular and Micro Nuclear Reactors.

• Regulatory Standards and Efficiency Norms:

  • The Bureau of Indian Standards (BIS) has published specific standards for Power Usage Effectiveness (PUE), Carbon Usage Effectiveness (CUE), Cooling Efficiency Ratio (CER), and Water Usage Effectiveness (WUE).
  • The Bureau of Energy Efficiency (BEE) has notified the Energy Conservation Building Code (ECBC 2017) and the Energy Conservation & Sustainable Building Code (ECSBC 2024) to prescribe efficiency and water conservation norms.

• Technological Advancements in Resource Conservation:

  • Industry players are adopting advanced cooling technologies, including direct-to-chip liquid cooling, immersion cooling, and closed-loop systems.
  • High-density racks are being deployed to support AI workloads while reducing overall water and power consumption.
  • Groundwater extraction for data centres remains governed by Ministry of Jal Shakti guidelines.

Impact Analysis

Data Centre Operators and Industry Impact: Operators are transitioning toward high-performance computing and AI-driven infrastructure, which requires significantly higher power and more efficient cooling solutions. They are now subject to specific Indian Standards regarding energy, carbon, and water usage. Action Required: Operators must adopt advanced cooling technologies and high-density racks. They must also ensure compliance with BIS standards and BEE building codes while shifting toward renewable energy sources.

State Governments (New Investment Destinations) Impact: States such as Andhra Pradesh, Madhya Pradesh, Chhattisgarh, and West Bengal are emerging as key destinations for data centre investments. Action Required: These states need to prepare infrastructure and regulatory environments to support the rapid scaling of data centre capacity and associated power demands.

Bureau of Indian Standards (BIS) and Bureau of Energy Efficiency (BEE) Impact: These bodies are the primary regulators for establishing the framework for electricity consumption and resource efficiency. Action Required: They must continue to develop, publish, and monitor standards (like PUE and WUE) and building codes (ECBC/ECSBC) to ensure the industry meets national sustainability goals.