“Likewise, renewable energy is also something we are looking at. If a data centre can ensure that there is no dependence on energy grids powered by traditional fuels such as coal, we can incentivise that as well,” a senior state government official said.
Cooling data centres traditionally requires massive amounts of water, which is used to dissipate the heat generated by thousands of rows of data centre racks within a facility. Though less water-intensive cooling technologies have emerged, most have not been implemented at scale because of their high cost.
According to the International Energy Agency, an average 100 megawatt (Mw) data centre consumes about 2 million litres of water per day — equivalent to the daily water consumption of roughly 6,500 households. “The water consumption by data centres has to be brought down. So, the idea of providing incentives is to ensure that new innovations in this space get the right support,” one of the officials said.
Apart from this, the new data centre policy — likely to be launched within the next two to three months — includes incentives for companies developing solutions to increase server density per rack, the official said. The state government would also incorporate elements from the Beyond Bengaluru scheme, under which companies receive additional financial and non-financial incentives to set up data centres in Tier-II and Tier-III cities and towns, another state government official said.
“In areas where we see the potential to link new data centres with subsea cable landing stations, incentives are being planned. Under the data centre policy, we are also considering working with global companies, telecommunications firms, and technology giants to incentivise cable landing stations as well,” the official quoted above said.
Although the corpus for the second phase of the state’s data centre policy has not yet been finalised, the Karnataka government is in talks with industry players to assess requirements and decide accordingly, one of the officials said.
The first phase of the state’s data centre policy, launched in 2022, aimed to develop 200 Mw of data centre capacity in Karnataka by 2025. The policy also allows data centres to draw power from two different substations to ensure a reliable and uninterrupted power supply.
The policy provides a one-time 7 per cent capital subsidy of up to ₹10 crore on the value of fixed assets, excluding land and buildings, along with a 10 per cent subsidy on land purchases if the land parcel is located outside Bengaluru Urban district.
State looks to cool data centres, heat up investments
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