BS Manthan: Experts urge green data centre policy as AI power use surges

As AI drives power-hungry data centres, experts urge India to embed renewable and green norms into its data centre policy to ensure sustainable digital growth

India will need to factor in the green energy component in its data centre policy framework as the country’s ever-expanding digital footprint, driven by the burgeoning rise in artificial intelligence (AI) systems, creates demand for more storage space, experts said.

 

At a panel discussion during the ongoing two-day BS Manthan Summit, experts including Mohit Bhargava, country director, India Energy and Climate Center, Goldman School of Public Policy, UC Berkeley; Nikhil Dhingra, chief executive officer (CEO), ACME Solar; and Sunil Gupta, co-founder, managing director and CEO, Yotta Data Services, opined that a comprehensive ‘green’ data centre policy was needed to drive the sustainability and efficiency of India’s storage market. 

“In the National Data Centre Policy, we need to add the word ‘green’ there. India is a place which can actually house green data centres to the highest possible level. So, the National Green Data Centre Policy could be a really very important step and a messaging,” Bhargava said, adding that India can produce green energy at a more competitive cost than other countries. 

Dhingra, who heads ACME Solar, echoed Bhargava’s views on the country’s competitiveness in generating and supplying renewable power and said that most of the power generated was cheaper than what state electricity boards were able to offer.

 

“India is very competitive on power, and renewable stands ahead of other sources of power in terms of supply and is cheaper than what the state electricity boards are able to supply. Most of the data centres have tied up with renewable power operators. So, renewable (energy) is more than geared up to supply additional demand around the clock,” Dhingra said.

 

Gupta, who heads Yotta, a company with one of the biggest data centre, graphics processing unit and AI servers hosting capacities in India, also agreed and said that all government policies gave incentives based on power usage efficiency and other parameters.

 

“Whether it’s the central government or state government policies, they are linking many of the incentives based on power usage efficiency and green quotients. So, this is the government's way of doing it. While we don’t need financial incentives, the government is saying if we give any financial incentives, we will link them to how efficient and green you are. I think that is great,” Gupta said.

 

Underscoring the importance of greening infrastructure, Gupta also said that as digital ecosystems in India expanded, underlying systems must be strengthened through energy-efficient solutions.

 

“Data centres have rows and rows of racks in which the equipment is there. A typical rack earlier consumed six to seven kilowatt per rack; that was the power density we have seen for the last 25 years. With AI, when you are training the models like ChatGPT or Gemini, the hardware is powered by GPUs which consume a minimum of 10 times more power,” he said.

 

The three guests were on a panel titled Data Centre: A sustainability challenge, moderated by Avik Das from Business Standard.

 

Bhargava, Dhingra and Gupta also said that the sharp increase in power density was raising concerns around cooling requirements, water usage, and grid stability.

 

As AI data centres expand, the newer infrastructure would need additional investment in cooling technologies, battery storage and smart grid integration to prevent bottlenecks and minimise environmental impact while meeting round-the-clock demand, they said.

 

Apart from energy being generated from solar and wind sources, nuclear power can also act as an alternative to non-renewable energy sources, especially for data centres, Dhingra said, adding that the company has plans to expand in that area.

 

“It's a very promising sector. The government has successfully prioritised a lot of sectors and encouraged private participation. As we have seen in more developed markets like the US, nuclear has to be there in a large way. It’s great to allow the private sector to be present in as much value chain as possible,” Dhingra said.

 

The primary constraint, however, is not in the generation or storage of energy from renewable energy sources but the last-mile delivery to places where these data centres will be set up, Gupta said.

 

Most of the newer data centres, he said, were being developed on the outskirts of larger towns, or smaller towns and cities, where it was sometimes difficult to ensure adequate and stable power to these structures.

 

Tapping nuclear energy, however, can prove to be an effective solution in such scenarios, Gupta said.

 

Apart from these, the government must also focus more on easing compliance norms for business.

 

“I don’t think we, as an industry, are looking for fiscal incentives. What we all are asking for and what they (government) are trying to do is promoting the ease of doing business, because we end up asking for 40–50 approvals before the tender goes live. So, that is what we want to avoid. And of course, we always say to the government that you must generate more demand,” Gupta added.