India's total data centre capacity is likely to increase to 2 gigawatts from 1 gigawatts as of December 2023, driven by a higher application of artificial intelligence, according to financial services company Avendus.
However, the AI-driven surge in data centre activity has also underscored the industry's energy-intensive nature. As per the International Energy Association, processing a single ChatGPT query requires 10 times more power than a Google search.
Amid this data centre boom and the escalating demand for energy, Jefferies notes that the renewable energy sector stands to benefit significantly. As data centres seek to reduce their carbon footprint and meet sustainability goals, investments in renewable energy sources such as solar and wind power are likely to increase.
Data Centres And Energy Consumption
Data centres are energy-intensive operations, consuming significant amounts of electricity to power their servers, cooling systems, and other infrastructure. As the number and size of data centres increase, so does their demand for power. Goldman Sachs expects this trend to elevate the global power consumption of data centres from 1-2% to 3-4% by 2030.
Goldman Sachs Research predicts a 160% growth in data centre power demand by 2030. The brokerage notes that the overall increase in data centre power consumption from AI could be to tune of 200 terawatt-hours per year between 2023 and 2030.
Why Renewable Energy
Most of India's electricity is currently derived from coal. However, heavy reliance on fossil fuels poses a challenge to the sustainability goals set by companies. This is where renewable energy stands to be a big beneficiary of the data centre and power demand boom, according to Jefferies.
The brokerage notes how growth in data centres is expected to help renewable power developers reduce risk by allowing them to form longer-term contracts at higher prices.
Key Initiatives & Investments
Key players in the Indian data centre market have also reflected this trend in their deals and targets.
AdaniConneX: The joint venture between Adani Enterprise and EdgeConnex raised up to $1.44 billion in 2024 to fund its upcoming green data centres. The company plans to build an environmentally conscious 1 GW data centre infrastructure platform.
Nxtra: Bharti Airtel's data centre subsidiary has signed power agreements for 25 years in order to procure 140 gigawatt hours of renewable energy for its data centres in Tamil Nadu, Uttar Pradesh, and Odisha.
Crtls: This private company operates Asia's largest network of rated-four data centres in India. The company aims to achieve 100% renewable energy usage by 2030 and has plans to add 1.3 GW of renewable energy capacity across India, including solar and wind power.
NTT India: This private company plans to install 350 MW of solar energy to meet the growing energy requirements of its data centres.
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