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					</table>With over 880 million internet users and a thriving tech sector, India&#8217;s data center industry has seen explosive growth in recent years and is poised to accelerate with the advent of artificial intelligence. This expansion, however, comes with a significant electricity demand, straining the country&#8217;s already stressed power grid.
Power demand from data centers in India grew at 4.4% year-on-year to reach 139 billion kWh in June 2023, according to Rohan Sheth, Vice President, Colocation &amp; DC Build at data center company <a href="https://yotta.com/" target="_blank" rel="noopener">Yotta</a>.
Meanwhile, the International Energy Agency (<a href="https://www.iea.org/energy-system/buildings/data-centres-and-data-transmission-networks" target="_blank" rel="noopener">IEA</a>) estimates that by 2030, data centers alone will consume about 8% of total energy globally. Data centers currently consume about 1-1.5% of global energy and contribute to 0.3% of global emissions.
A Booming Industry
&#8220;The Indian data center market has grown from 2.7 million square feet in 2017 to 11 million square feet in 2023,&#8221; said Sheth of Yotta, adding that capacity has increased by 100 to 150 MW annually in recent years, reaching nearly 900 MW by 2023.
This growth shows no signs of slowing, with projections suggesting India&#8217;s data center capacity could cross 1,800 MW by the end of 2026.
&#8220;The country boasts a substantial capacity of approximately 950 MW, surpassing other major countries like Australia, Hong Kong SAR, Japan, Singapore, and Korea. It is further set for significant expansion with an anticipated addition of around 850 MW between 2024 and 2026,&#8221; said Prashant Goyal, Head of Data Centre Practice at <a href="https://www.cbre.co.in/" target="_blank" rel="noopener">CBRE-India</a>.
Several factors are driving this expansion, according to Xavier Surentherathas, Senior Director, APAC Channel Sales at <a href="https://www.parkplacetechnologies.com/" target="_blank" rel="noopener">Park Place Technologies</a> – a data center maintenance firm. Global cloud providers like <a href="https://aws.amazon.com/" target="_blank" rel="noopener">Amazon Web Services</a>, <a href="https://azure.microsoft.com/en-us" target="_blank" rel="noopener">Microsoft Azure</a>, and <a href="https://cloud.google.com/" target="_blank" rel="noopener">Google Cloud</a> are increasing their presence in India to meet the rising demand for cloud services. Government initiatives, such as granting infrastructure status to data centers and introducing supportive policies, have also played an important role.
&#8220;The enactment of the Digital Personal Data Protection Act in 2023 has promoted secure cross-border data exchange, lawful data processing practices, and heightened confidence among stakeholders,&#8221; said Goyal.
The Energy Challenge
This rapid growth, however, comes with a significant energy demand. Data centers currently account for about 2% of India&#8217;s total power consumption, a figure that is expected to rise, said Surentherathas.
&#8220;Data centers, by nature, consume large amounts of energy given the IT infrastructure they run and support,&#8221; said Sheth.
<img loading="lazy" decoding="async" class="aligncenter wp-image-68762 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/08/Screenshot-2024-07-29-125006.png" alt="Data Centres IEA" width="688" height="352" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/08/Screenshot-2024-07-29-125006.png 688w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/08/Screenshot-2024-07-29-125006-300x153.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/08/Screenshot-2024-07-29-125006-650x333.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/08/Screenshot-2024-07-29-125006-624x319.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/08/Screenshot-2024-07-29-125006-600x307.png 600w" sizes="(max-width: 688px) 100vw, 688px" />
Currently, most of India&#8217;s electricity is <a href="https://www.mercomindia.com/india-third-solar-power-producer" target="_blank" rel="noopener">derived</a> from coal, which contributes around 75% of the country&#8217;s power generation. This heavy reliance on fossil fuels poses a challenge to the sustainability of the data center industry, but companies have set ambitious targets to procure more from renewable sources, driving up demand for clean energy.
For instance, CBRE aims to transition its corporate operations to 100% renewable energy by the end of 2025. &#8220;Currently, we are working towards meeting our energy demands with a balanced approach between fossil fuels and renewables, with a clear focus on increasing the percentage of renewable sources over time,&#8221; said Goyal.
Earlier this year, telecommunications service provider <a href="https://www.airtel.in/" target="_blank" rel="noopener">Bharti Airtel</a>&#8216;s data center subsidiary <a href="https://www.nxtra.in/" target="_blank" rel="noopener">Nxtra</a> said it would <a href="https://www.mercomindia.com/airtel-nxtra-procure-clean-energy-data-centers" target="_blank" rel="noopener">procure</a> 140 GWh of renewable energy annually for its data centers in Tamil Nadu, Uttar Pradesh, and Odisha. The company partnered with <a href="https://ampin.energy/" target="_blank" rel="noopener">AmpIn Energy</a> and <a href="https://amplussolar.com/" target="_blank" rel="noopener">Amplus Energy</a> to set up captive solar and wind power projects totaling 72.3 MWdc capacity to power its data centers under 25-year agreements.
<a href="https://www.adaniconnex.com/" target="_blank" rel="noopener">AdaniConneX</a>, a data center solutions provider and a joint venture between <a href="https://www.adanienterprises.com/" target="_blank" rel="noopener">Adani Enterprises</a> and <a href="https://www.edgeconnex.com/" target="_blank" rel="noopener">EdgeConneX</a>, raised $1.44 billion earlier this year to fund its renewable energy-powered data centers. The company plans to <a href="https://www.mercomindia.com/adaniconnex-green-financing-data-centers" target="_blank" rel="noopener">build</a> an environmentally and socially conscious 1 GW data center infrastructure platform.
Last year, Akhil Agarwal, Senior Director, Power Management, <a href="https://www.sttelemediagdc.com/" target="_blank" rel="noopener">ST Telemedia Global Data Centres</a> (STT GDC), had told Mercom in an interview, “Our facility load is 400 MW across 21 operational data centers in 10 Indian states. We are adding 1-2 data centers every year.”
According to its ESG report, renewable energy accounted for 62.5% of STT GDC’s electricity consumption in 2023, far earlier than its target to achieve 60% by 2026. The company is sourcing renewable electricity through onsite installations, green tariffs, power purchase agreements, energy attribute certificates, and offsets.
A developer told Mercom that his company recently commissioned three solar projects in Uttar Pradesh, where <a href="https://www.ctrls.com/">CtrlS</a> procures power to operate its data centers. The developer has also signed contracts with other Karnataka and Andhra Pradesh data center companies.
&#8220;The data center market requires huge capacities of power. Overall, the market size of data centers is roughly 8 GW by 2025, and by 2030, we require 20 GW of solar power for data centers,&#8221; he said.
&#8220;Several data centers powered by alternative sources stand as leading Indian examples, with over half of their power currently derived from renewable energy sources. A fully 100% contained solar-powered data center is currently under construction in Uttar Pradesh. A new captive solar power plant is being developed to meet the energy requirements of other new core and edge data centers in the state,&#8221; said Surentherathas.
Impact of Artificial Intelligence
According to the IEA, a single ChatGPT query uses 2.9 watt-hours of electricity compared to 0.3 watt-hours for a Google search, underscoring the energy-intensive nature of large language-based models that underpin artificial intelligence in use today.
Meanwhile, Goldman Sachs Research projects that AI will increase data center power consumption by 200 TWh annually between 2023 and 2030, with AI accounting for about 19% of data center power demand by 2028.
Sustainability Initiatives
Electricity demand in data centers primarily comes from two main processes: computing and cooling. Computing accounts for about 40% of a data center&#8217;s electricity demand, while cooling, necessary to maintain stable processing efficiency, also makes up approximately 40%. The remaining 20% is used by other associated IT equipment.
Integrating renewable energy can help reduce a data center&#8217;s carbon footprint and increase energy efficiency. Companies are focusing on improving Power Usage Effectiveness (PUE), a key metric for energy efficiency in data centers.
Yotta, for example, reports a PUE of 1.4, which is considered good for a tropical climate like India&#8217;s.
STT GDC reports that in 2023, their operating PUE was 1.5 compared to 1.66 in 2020.
Advanced cooling technologies, such as liquid immersion and adiabatic chillers, are also being deployed to reduce energy consumption for cooling, a major power draw in data centers, according to the companies Mercom spoke to.
Some operators are also exploring ways to capture and reuse excess heat generated by data centers, potentially providing a renewable energy source for nearby buildings or industries.
Ravichandran Purushothaman, President of <a href="https://www.danfoss.com/en-in/" target="_blank" rel="noopener">Danfoss India</a>, emphasizes the potential for heat reuse. &#8220;By harnessing excess heat, we&#8217;re not only reducing energy consumption but also creating a reliable source of clean energy.&#8221;
The company recently partnered with <a href="https://www.hpe.com/us/en/home.html" target="_blank" rel="noopener">Hewlett Packard Enterprise</a> to deliver an off-the-shelf heat recovery module to help it manage and value excess heat.
Despite these efforts, challenges remain. Industry experts pointed out several barriers to renewable energy adoption, such as the intermittency of renewable sources like solar and wind, as data centers require an uninterrupted power supply. They also said that current regulations do not allow data centers to bank excess power generated during peak times for use during non-peak periods.

Power-Hungry Data Centers Drive Demand for Renewable Energy in India

As India installs solar and wind energy at a rapid pace, grid congestion is a regular occurrence, power cuts are still prevalent, and curtailment of solar and wind is rampant as utilities struggle to handle intermittent sources of power.
According to data from Mercom India Research, in the <a href="https://mercomindia.com/indias-solar-capacity-30-gw-milestone/" target="_blank" rel="noopener noreferrer">first half of 2019</a>, renewable energy sources accounted for nearly 58% of the new installations, with solar representing 41%.
Rooftop solar is growing at a faster pace in India compared to large-scale solar as the industry pushes forward to meet the target of installing 40 GW by 2022.
Growing deployments of rooftop solar PV systems paired with <a href="https://mercomindia.com/india-energy-storage-projects-4-yrs-115-million/" target="_blank" rel="noopener noreferrer">energy storage systems</a>, make the prospect of panel-level solar+storage systems very attractive to consumers. A panel-level energy storage system is one that mounts jointly with the solar panel.
Mercom India recently spoke to Vikram Iyengar, President, CTO, and co-founder of <a href="https://www.yottasolar.com/" target="_blank" rel="noopener noreferrer">Yotta</a>, the developer of a panel-level energy storage technology, about the market potential for innovative technologies in the rapidly changing energy storage market. The following are highlights of Mr. Iyengar’s comments:
What does the <a href="https://mercomindia.com/total-global-energy-storage-triple-2030-irena/" target="_blank" rel="noopener noreferrer">energy storage market</a> look like now, and where is it going? (could be US or global)
Many different energy storage options are being evaluated worldwide to support the ever-expanding demand for reliable renewable energy. On the one hand, there are mechanical systems, like pumped hydro and pressurized caverns, that serve long-duration storage needs. On the other hand, various forms of chemical batteries—Lithium-ion, flow batteries, etc.—are preferred in the ongoing electrification and tapping of distributed renewable resources for shorter duration backup systems. The key ingredients that will help any energy storage technology penetrate the market and gain wide adoption are simplicity, safety, scalability, and reliability.
What are the most influential drivers and anchors of the energy storage market?
The push to grow the nation&#8217;s renewable portfolio and the need for an adaptive grid, bringing widespread energy access, is key to the <a href="https://mercomindia.com/mnre-invites-gravity-storage-project/" target="_blank" rel="noopener noreferrer">growth of energy storage</a>. Adding distributed renewable micro-grids is much faster than adding any new centralized hydro, nuclear, or coal power plant and in addition, being ‘distributed,’ micro-grids lead to a highly resilient grid. India is gifted with ample solar insolation, and the right mix of storage technologies can make a huge impact on improving its energy sufficiency numbers. The late, visionary C.K. Prahalad once said to me at a conference: &#8220;Build the right product and introduce it to those who need it. In India, the forces at the bottom of the pyramid are stronger than any policy.&#8221;
How does energy storage technology fit in with emerging energy markets like India?
Over the last two decades, the telecom sector witnessed mobile communications leapfrog wired infrastructure. Similarly, renewables, like solar paired with reliable energy storage, have the potential to bring clean, reliable energy to the masses and aid our transition away from a carbon-heavy, centralized electric infrastructure. Incentives that promote R&amp;D and manufacturing in storage technologies will ensure that India is a dominant, global player in a heavily electrified future.
What are cost and technology challenges that emerging markets like India will face?
As it stands now, reliable energy storage options come at a premium, but the hardware costs are steadily decreasing with rising supply chain efficiencies. Initially, emerging markets like India may see the adoption of large-format storage technologies that are more centralized. However, the technological benefits of microgrids and distributed energy storage technologies should yield larger societal benefits and should be a part of urban and rural planning.
<ol>
<li>It leads to a better quality of living and more access to schools and medical clinics.</li>
<li>Reliable energy access would help the development of rural areas, helping to alleviate the issue of overcrowding in major cities.</li>
<li>Scalability significantly helps the grid adapt as the population moves up the energy ladder.</li>
</ol>
What are some of the battery technologies India should be looking at?
For stationary storage, Lithium Iron Phosphate (LFP) is an ideal candidate to consider. It has relatively low manufacturing needs; it lacks toxic metals; it is inherently safe and has a longer cycle life than many other battery technologies.
How is Yotta’s system different than lithium-ion or a lead battery system?
Yotta&#8217;s SolarLEAF™ is a 1 kWh LFP battery paired with power electronics; it has been built to be easily coupled with solar PV modules. At the heart of this rugged, long-life battery is a thermal regulation technology that keeps the battery within a suitable operating range. Even in extreme high-temperature conditions, the SolarLEAF™ consumes no electricity. The associated power electronics lead to high efficiency, safety, and ease of deployment—similar to that of solar panels. We have built a cost-effective storage technology that we believe will be the most bankable energy solution—it is a small, rugged technology, yet simple to scale with minimal training.
When will Yotta’s energy storage system be available commercially? And what is the first commercial market the company will be targeting?
Yotta plans to complete its pilot deployments and certifications by mid-2020 and is actively looking for channel partners with a shared vision for increased solar adoption. The first target market with the SolarLEAF™ will be micro-grids and community solar projects that serve commercial energy needs, such as peak shaving and backup power. Since the SolarLEAF™ doesn&#8217;t occupy additional real estate—and with its ability to operate under harsh weather conditions—it can be widely deployed to power critical loads, even in crowded urban buildings, hospitals, and schools—to name a few ideal candidates.

The Right Mix of Energy Storage Technologies Can Have a Huge Impact: Interview

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