Pick green energy, not gas, for power-hungry data centres

Data centres are the engine rooms of the global digital economy, which artificial intelligence (AI) is rapidly reshaping.

- Vibhuti Garg

Collectively, data centres form "the cloud" that stores, processes and generates our precious information. But their insatiable appetite for energy is such that data-centre capacity is no longer measured in computing power, but rather in their energy consumption. This has profound implications for India's electricity demand and supply.

The Union government has taken significant steps to bolster the data centre segment of the digital economy, granting it infrastructure status and encouraging local and international investment. Over the past decade, this has attracted investments estimated at $6.5 billion, generating an impressive $1.2 billion in revenue last year. The country is now home to 262 data centres and ranks seventh in the world, just behind France and Canada (264 each).

India's data centre capacity is expected to grow exponentially from 1.4 gigawatts (GW) in 2024 to 9GW in 2030, and in doing so, it is likely to consume about 3% of India's electricity in 2030, up from less than 1% currently. The challenge is to meet such demands sustainably, and the answer lies in battery storage and renewable energy.

While natural gas has been hailed as a cleaner alternative to coal, the energy crisis of 2022 raised questions about its viability. Domestic gas production meets only half of India's needs and cannot keep pace with surging demand from the residential, commercial and industrial sectors, which is expected to drive demand up by 60% by 2030, leading to a greater reliance on imports.