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India is gradually moving away from its heavy reliance on traditional energy sources and towards the new era of green sources as a result of the growing environmental concerns over the past few decades. There has never been a greater need to control emissions and oversee the switch to carbon-free energy sources. Data centres are a major source of emissions because of their enormous energy consumption. However, by using renewable energy sources like solar power and green hydrogen, these emissions can be reduced.
Currently, data centres throughout the world house the majority of the data. The International Energy Agency (IEA) estimates that by 2030, data centres alone will account for almost 8% of all energy usage. Data centres currently account for 0.3% of global emissions and use between 1.5% and 1.5% of the world's energy. India isn't exempt from all of these changes. Data consumption is increasing and this has been driving the growth of renewable energy sector.
India's 200 data centres, primarily located in Bengaluru and Mumbai, are adopting renewable energy as a practical and sustainable alternative. With wind power reaching 47.96 GW and solar power reaching 261.15 GW by 2024, the nation's renewable energy capability is expanding quickly. States are providing enticing incentives to promote the use of green energy in this industry. For example, Tamil Nadu offers benefits to data centres that use renewable energy to meet 30% of their energy needs, Telangana offers substantial savings on cross-subsidy charges for wind (60%) and solar (70%) energy, and Haryana exempts data centres that use the grid from electricity duties and taxes for 20 years. Adopting effective storage options, such as hard drive discs, can also aid in lowering energy and server utilisation.
With more than 200 of these centres and a combined capacity of about 1,000 Megawatts (MW), India has surpassed China as one of Asia's data centre hotspots in 2024. To capitalise on this anticipated demand, a number of regional and international information technology (IT) behemoths have made significant investments in the nation. These include Yotta, which has tier 4 data centres, Adani Connex, which plans to invest USD 1.3 trillion in FY2025, and Nxtra by Airtel which is news for joining the RE100 initiative, a global flagship project led by Climate Group in collaboration with CDP. It is encouraging to note that the company has pledged to source all of its electricity from renewable sources.
It is widely admitted that Data centre capacity will expand sharply in India's data business. The industry is expanding by over 20% annually, which will certainly lead emissions to skyrocket. The need of the hour is do away with ambiguous regulations and policy uncertainty completely so that, renewable energy is widely adopted in all areas so that the benefits of one of the low-hanging fruits reaches to all.
By introducing new technologies like green hydrogen, relaxing existing policies and concepts like 24x7 carbon-free energy, and facilitating the development process in open access, the government is also highlighting the rising usage of renewable energy through various technologies.
Nonetheless, there is still room for innovation in market processes and regulation to facilitate renewable energy transactions. With new integrated clean technologies, business models, and incentive structures, the data centre and information and communication technology (ICT) sectors could de-carbonise operations by promoting more clean energy through an integrated strategy and solution.
As Data centres are major power guzzlers, renewable energy is expected to get further boost.
The government’s policy push would be critical for the development of renewable energy and its consumption for sustainability. oing forward, India would witness a robust data centre, completely operating on green and clean energy.
Authored by Arif Aga, Director, SgurrEnergy