Power, Land & Water: Three Hurdles Facing India’s Data Centre Expansion

India’s ambitions to expand its data centre capacity face three practical hurdles: connecting facilities to the electricity grid, securing suitable sites and ensuring water availability, according to Ashish Mittal, Director of Consulting for Energy and Commodities at Crisil Intelligence.

Speaking on the sidelines of a power sector event focused on artificial intelligence, Mittal said closer coordination between the electricity sector and data centre developers would be essential to meet future infrastructure needs.

“Challenges on the data centres are around grid connectivity, site location, and water availability. Those were the three major key challenges around the data centre,” he said.

Growing AI adoption is increasing demand for data centres, which require substantial electricity and water resources to operate.

STATES HAVE A KEY ROLE

Mittal said state governments could help turn investment plans into operational facilities by making essential infrastructure more readily available.

“So support upon enabling faster land availability, grid connectivity, water availability, I think the state governments can come together on offering such supports which will help go a long way in getting data centres on the ground,” he said.

The immediate requirement, he clarified, was greater policy support rather than necessarily new policy reforms.

Discussions at the event examined the relationship between data centres and the power sector, including what developers need from the grid and what the electricity system expects from these facilities.

“So, there were deliberations upon the two-way connect between the data centre industry and the power sector,” Mittal said. What is expected out of data centres and what should the grid offer to the data centre business. "So, that was the key idea," he underlined.

TECHNOLOGY COULD EASE RESOURCE DEMAND

Addressing concerns over electricity and water consumption, Mittal said technological advances could help reduce the resources required to run data centres.

“There are newer technologies which are coming up which are reducing the power requirements and water requirements,” he said.

His assessment puts infrastructure access at the centre of India’s data centre expansion: rising demand will need to be matched by timely access to land, reliable grid connections and adequate water supplies.

With inputs from ANI