Powering data centres at scale: how global innovators can help deliver India’s digital ambitions

The success of this transformation depends on the country’s power generation, storage, transmission and data centre infrastructure scaling at a similar pace, as it needs to build ever-larger, more power-dense data centres capable of supporting India’s accelerating digital economy.

While India’s ambition is clear, its achievement can be accelerated by cross-border collaboration – and this presents major opportunities for international innovators.

Scaleups with innovative technologies and operational expertise are being welcomed as partners, both to expand data centre capacity and to address the energy, resilience and sustainability challenges that come with this level of growth.

How big is India’s data centre power challenge? The numbers are striking.

Estimates are that India’s data centre IT load will rise from just over 1 gigawatt (GW) today to 8–9 GW by 2030. While data centres currently account for less than 1% of national electricity consumption, this could increase to 3–6 per cent by the end of the decade.

At the same time, India is pushing towards a target of 500 GW of non-fossil fuel generation capacity by 2030 – with more than 260 GW already installed.

In principle, this provides sufficient renewable energy headroom to support an additional 8–9 GW of largely 24/7 data centre load, provided it is supported by the right mix of storage and transmission capacity.

The positives

Policy alignment is a plus. Large data centres are formally recognised as ‘infrastructure’, with facilities above 5 MW qualifying for improved access to long-term finance. Importantly, data centre policy is well aligned with power sector objectives.

Meanwhile, hyperscalers and leading Indian operators are already contracting large volumes of off-site renewable energy and storage through long-term Power Purchase Agreements (PPAs). These agreements provide price certainty in a volatile market and allow data centres to contract directly from large solar and wind projects.

PPA prices in the ₹3–4/kWh range often undercut grid tariffs, while creating bankable demand for renewable projects designed to follow data centre load profiles.

Renewables, PPAs and storage as the backbone

Data centres are also increasingly becoming anchor customers for new ‘renewables plus storage’ and ‘round-the-clock renewable’ tenders. These typically combine solar and wind power with batteries to deliver reliable continuous energy flow at regulated tariffs in the ₹4.9–5.0/kWh range – already competitive with gas-fired generation.

Falling battery costs, combined with viability gap funding of up to 30 per cent of capex for standalone storage, have triggered a surge in battery energy storage system (BESS) tenders. This is essential for shifting solar generation into the evening peak and aligning supply with the 24/7 power profiles data centres require.

It also helps that India’s principal data centre hubs – Mumbai, Chennai, Hyderabad, Bengaluru and Delhi NCR – are the same regions seeing the strongest build-out of transmission-connected wind and solar schemes, alongside rooftop and behind-the-meter systems. This overlap makes it technically and commercially feasible to meet a growing share of data centre demand through contracted renewables supported by local storage.

The challenges

Despite the positive outlook, however, challenges remain – not so much at national level but around local and structural constraints.

In hubs such as Mumbai and Chennai, high-density commercial clusters are already testing substation and transmission limits. Without parallel investment in grid upgrades, there is a real risk of local congestion, renewable curtailment and, ultimately, reliability issues.

While India has a strong pipeline of solar, wind and round-the-clock renewable projects, multi-gigawatt storage deployment – particularly for multi-hour and multi-day applications – remains in its early stages. Delays here would increase reliance on coal-heavy grid power during peak demand.

Land use is another constraint. Renewable parks, transmission corridors and data centre campuses compete with agriculture, urban expansion and conservation priorities, slowing permitting and increasing stakeholder risk.

Water is also a concern. Recent analysis suggests data centre water use could more than double by 2030, with many facilities planned in water-stressed regions. This is driving scrutiny of both direct water consumption and the water embedded in grid electricity.

The opportunity for international scaleups

Meeting hyperscalers’ expectations for 24/7 clean power requires storage solutions that go far beyond today’s two to four-hour lithium-ion systems.

This is creating a major opportunity for international long-duration energy storage (LDES) scaleups offering modular, containerised storage systems using low critical-mineral chemistries – precisely the type of technologies emerging from the US.

In India, these solutions could sit behind the meter at large campuses or form part of grid-connected renewable clusters, smoothing multi-day monsoon and wind lulls and enabling genuinely round-the-clock renewable portfolios.

Cooling is another high-growth opportunity. Already one of the fastest-expanding segments of India’s data centre ecosystem, the cooling market is expected to triple by 2030.

Global innovators in high-density liquid cooling, immersion technologies, thermal management software and advanced heat-recovery systems could help operators cut cooling energy use by 30–40%, improve power usage effectiveness and transition to closed-loop or low-water architectures that directly address water stress.

Building next-gen data centres will also require India to integrate leading technologies that optimise energy use through smart-charging and drive efficiency through rapid data transfer.

Combined with advances in chip-, rack- and building-level efficiency – areas where global OEMs and scaleups are already active – this could materially reduce both the power and water footprint of India’s advanced AI-ready campuses.

A reference market in the making

If India’s policy momentum and capital pipeline are matched by international technology partnerships tackling the areas of constraint – multi-day storage, local grid capacity, water cooling and high-density efficiency – most of the projected data centre pipeline is deliverable on a predominantly renewable footing.

And for global scale-ups supporting the data centre build-out, India offers something rare: hyperscaler demand, clear renewable targets and a supportive policy environment.

Executed well, India will not only power its own digital growth sustainably – it will become a reference market for next-generation data centres worldwide.

And for ambitious international innovators with the right capabilities to help it achieve that, the door is wide open.

• For more information visit: https://www.intralinkgroup.com/markets/india