Key Facts

India's digital infrastructure sector is witnessing unprecedented capital investments, with domestic and global cloud operators projecting hyperscale data centre capacity to cross 2,000 MW by 2027, driven by artificial intelligence (AI) compute workloads, 5G rollouts, and digital payments. However, the surging energy consumption of data centres has prompted the Ministry of Power and state electricity utilities to mandate dedicated green power procurement. Data centre operators are entering captive renewable energy power purchase agreements (PPAs), investing in round-the-clock (RTC) solar-wind hybrid setups with battery energy storage systems (BESS), to prevent localized grid stress in data hub clusters such as Chennai, Mumbai, and Hyderabad.

GK Context

Data centres in India were granted 'Infrastructure Status' by the Union Government in the 2022 Union Budget, facilitating access to long-term institutional credit and foreign commercial borrowings at competitive interest rates. Under the Green Energy Open Access Rules, 2022, the threshold for commercial open access green power procurement was reduced from 1,000 kW to 100 kW, enabling data centres and tech parks to source green electricity directly from independent renewable producers.