India’s data centre boom is colliding with its climate reality, Pg11

Key Highlights:

• India's data center capacity is projected to reach 6.5 GW by 2030, attracting nearly $200 billion in investment over the next decade.
• This rapid expansion is straining critical resources, with data centers consuming an estimated 150 billion litres of water in 2024-25.
• States like Maharashtra, Telangana, and Rajasthan are actively promoting data center development, often in water-stressed regions.
• A University of Cambridge study found that data centers raise land surface temperatures by an average of 2°C within a 10 km radius.
• Existing state policies often lack comprehensive environmental safeguards, such as mandatory renewable energy sourcing or grid impact assessments.

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Detailed Insights:

• The projected fourfold expansion of data center capacity by 2030 will significantly increase electricity demand to 57 TWh.
• A 100 MW data center consumes about 2 million litres of water daily, equivalent to the daily use of roughly 6,500 households.
• Many data centers are clustering in India’s most water-stressed regions, including Rajasthan and Telangana, without adequate water consumption accountability.
• India's power grid is already under strain, leading to significant renewable energy curtailment due to inadequate transmission infrastructure.
• The Union Ministry of Power indicates that capacity is not the constraint, but rather market design and transmission infrastructure.
• The heat generated by data centers creates a feedback loop, increasing ambient temperatures, which in turn raises cooling demand and electricity consumption.
• State policies offer generous incentives like tax exemptions but often lack conditions for grid impact assessment or mandatory renewable energy sourcing.
• Telangana's policy classifies data centers as "essential services," guaranteeing uninterrupted power even during shortages.
• Maharashtra's policy reduced its renewable energy requirement for data centers from 100% to 51% to improve project viability.
• Gujarat’s new Data Centre Policy 2026-29 mandates at least 51% green energy sourcing, standing out among state policies.
• Experts from Institute for Energy Economics and Financial Analysis (IEEFA) and Council on Energy, Environment and Water advocate for phased power and water use standards.
• Coastal locations offer potential advantages for data centers due to proximity to renewable energy sources and access to seawater for cooling.

Key Concepts Involved:

• Urban Heat Island: A metropolitan area that is significantly warmer than its surrounding rural areas due to human activities and infrastructure.
• Groundwater Stress: A condition where the rate of groundwater extraction exceeds the rate of natural recharge, leading to declining water tables.
• Renewable Energy Curtailment: The reduction of output from renewable energy generators, often due to grid congestion or lack of demand.
• Grid Interconnection: The process of connecting a power generation facility or a large consumer to the national or regional electricity grid.
• Demand Response: Changes in electricity use by end-use customers from their normal consumption patterns in response to changes in electricity prices or grid conditions.