Synopsis: With rising electricity capacity, increasing renewable energy, and improving grid infrastructure, India is positioning itself to support the growing data center industry. However, regional differences, peak-hour stresses, and local grid limitations remain. Can careful planning, dedicated power arrangements, and clean energy solutions ensure India can fully power its data center boom?
Power is the most critical resource for keeping data centers running smoothly. Evaluating how available, reliable, and sustainable the electricity network is becomes essential. The industry depends on secure, uninterrupted power supply along with strong energy efficiency. As India’s data center hubs rise across Mumbai, Chennai, Bengaluru, Hyderabad, Kolkata, and Delhi NCR, they need a robust and scalable power ecosystem to handle growing hyperscale and colocation requirements.
India’s Power Capacity: Where Does The Country Stand?
India’s total electricity generation capacity has reached 452.69 GW as of October 2024, supported by a strong and diversified mix of conventional and clean energy sources. The country is undergoing a major shift towards sustainability, with renewable energy capacity rising to 203.18 GW and accounting for more than 46 percent of total installed power capacity as of CY23.
This transition aligns with India’s climate commitments to reduce emissions intensity by 45 percent by 2030 compared to 2005 levels and to ensure that half of its cumulative power capacity comes from non-fossil fuel sources by the same year. At present, data centers consume less than 0.5 percent of India’s total power generation capacity. Even with aggressive expansion to multi-gigawatt scale, the industry would still represent only a small share of national power consumption by 2030. As of mid-2025, India has also achieved virtually zero power deficit.
The Union Power Minister highlighted that the country successfully met a record peak power demand of 250 GW in May 2024 and 242 GW so far in 2025, underscoring India’s shift from being power-deficit to power-sufficient. Power costs are also expected to remain stable in the coming years, providing data center operators with predictable pricing and reliable grid access while reducing concerns around supply shortages.
State Wise Power Capacity
Among the major data center hubs, Maharashtra leads with 50,857 MW of installed capacity, accounting for 10.8 percent of the national share. It is followed by Tamil Nadu with 42,417 MW (9.0 percent) and Karnataka with 33,830 MW (7.2 percent). Delhi has the lowest installed capacity at 2,606 MW, or 0.6 percent. In the non-renewable segment, Maharashtra is the top contributor with 27,873 MW, followed by Tamil Nadu at 15,391 MW and West Bengal at 13,567 MW. Tamil Nadu, however, leads in renewable capacity with 27,025 MW, driven by strong wind and solar installations, while Karnataka (23,955 MW) and Maharashtra (22,984 MW) also make notable contributions.
Karnataka and Tamil Nadu stand out for their strong renewable penetration, balanced energy mix across solar, wind, and hydro, and high output from clean sources, an important factor for achieving sustainable Power Usage Effectiveness. Maharashtra offers the highest overall generation capacity, combining substantial base-load thermal power with growing renewable infrastructure, making it a reliable location for large-scale enterprise data centers with diversified power requirements.
Telangana shows good potential but has relatively modest overall capacity, making it more suitable for edge data centers or phased regional expansion. In contrast, Delhi and West Bengal have lower renewable penetration and limited capacity, which could affect sustainability scores and cost efficiency unless data center operators secure dedicated green power through structured power purchase agreements.
Power Supply During 2024-25 In India
Despite having a strong installed capacity, India experienced a peak power deficit of 4.3 percent (10.915 GW) while maintaining an overall energy surplus of 2.4 percent (42.159 BU) during FY24-25. This suggests that although the country’s total annual generation meets overall energy demand, the system still faces stress during peak hours. Addressing this requires greater capacity flexibility, more efficient dispatch mechanisms, and demand-side management. The gap highlights the ongoing challenge of ensuring grid reliability and adequate infrastructure during periods of high load, even with a positive overall energy balance.
Grid Infrastructure
A data center’s operational efficiency and scalability depend heavily on access to robust, high-capacity, and redundant power transmission infrastructure. While India’s major metropolitan areas benefit from a developing and maturing transmission network, factors such as grid access at specific locations and proximity to substations remain crucial differentiators. India’s electricity system delivers power in bulk from generation sites to substations through high-voltage transmission lines and subsequently to end-users via lower-voltage distribution lines.
Substations equipped with transformers manage voltage adjustments, stepping up voltage for transmission and stepping down for distribution. The country operates a Unified National Grid, which requires all power operators to be connected. This centralized framework ensures reliable cross-state power flow and facilitates energy balancing, both of which are critical for data center operations. Nevertheless, regional differences in grid strength and capacity can significantly influence site selection, making the quality of local infrastructure a key consideration in planning.
Grid Reliability
Grid reliability is particularly vital for data centers, especially hyperscale facilities, which require uninterrupted power to maintain uptime and service continuity. Grid reliability reflects the operational stability and resilience of the electricity network, assessed not only by available capacity but also by the frequency and duration of outages experienced by customers.
Two primary indices are used for this assessment: SAIDI (System Average Interruption Duration Index), which measures the total duration of non-momentary electric interruptions in minutes per customer per year, with higher values indicating longer outages and lower reliability, and SAIFI (System Average Interruption Frequency Index), which captures the average number of non-momentary interruptions a customer experiences per year, with higher values reflecting more frequent outages and less stable service. These indices offer insights into the quality and reliability of power supply at the consumer level, complementing installed capacity metrics with performance-oriented evaluation.
A state-wise analysis of installed power capacities and year-on-year outage trends highlights key variations. Tamil Nadu has consistently recorded low outage frequency and duration over the past three years, making it highly suitable for hyperscale data centers with minimal reliance on backup power.
Delhi demonstrates high grid reliability despite having limited installed capacity, supporting Rated 3 and 4 data center operations with reduced dependence on captive power solutions. Maharashtra shows moderate but improving reliability, though it remains behind the top-performing states. Urban centers such as Mumbai and Pune benefit from superior grid performance, enhancing their attractiveness for data center investments.
Transformer Ecosystem Supporting Power Stability
Transformer infrastructure plays a crucial role in supporting voltage step-up and step-down operations, which are essential for maintaining grid reliability and delivering power at usable voltages. India’s power adequacy is underpinned by a strong transformer network across key states, ensuring stable distribution and overall grid stability. An assessment of the distribution of step-up, step-down, and distribution transformers along with their capacities across major states reveals several trends.
Karnataka leads in both the number and capacity of distribution transformers, indicating strong localized power reliability for urban and peri-urban areas. Maharashtra exhibits a well-balanced transformer ecosystem across all levels, complementing its extensive transmission network. Telangana’s relatively higher number of step-down transformers points to a design optimized for secondary grid stability, which is beneficial for data intensive sectors.
Tamil Nadu maintains a well-established distribution transformer network, supporting consistent and reliable power supply across urban, rural, and industrial regions. Delhi NCR shows a high density of distribution and step-down transformers, particularly in Delhi and its adjoining urban centers, providing robust last-mile connectivity and minimal voltage fluctuations, critical for commercial, government, and large-scale infrastructure operations.
India’s Renewable Energy Capacity
As India advances toward its ambitious climate objectives, renewable energy has become a central pillar of the country’s power strategy, particularly for energy-intensive sectors like data centers. Driven by both national policy commitments and operational requirements, integrating solar, wind, hydro, and other emerging clean energy sources has become essential for establishing future-ready, ESG-compliant data centers.
As of October 2024, India’s installed renewable energy capacity stands at 203.18 GW, representing 46.3 percent of the country’s total electricity generation capacity of 452.69 GW. This marks a significant shift from a fossil-fuel-dominated grid to one increasingly powered by solar (92.12 GW), wind (47.72 GW), large hydro (46.93 GW), and bioenergy (11.32 GW). Including nuclear capacity (8.18 GW), the total non-fossil fuel capacity now exceeds 211 GW, underlining India’s commitment to a decarbonized power sector. This growth trajectory supports India’s Paris Agreement targets, including achieving 50 percent of cumulative electric power capacity from non-fossil sources by 2030, reducing emissions intensity by 45 percent from 2005 levels, and attaining net-zero emissions by 2070.
Certain states lead in renewable energy generation, offering abundant and diversified resources well-suited for data center hubs. Tamil Nadu, Karnataka, and Maharashtra provide large-scale access to both solar and wind power, making them particularly attractive for data center expansion from a renewable sourcing perspective.
Renewable energy is critical for decarbonizing data center operations. Solar, wind, and hydropower are the primary sources helping reduce reliance on fossil fuels. Solar energy is typically harnessed through rooftop or ground-mounted photovoltaic systems, especially in regions with high solar irradiance. Wind power, sourced through utility-scale farms or direct procurement agreements, offers a scalable option for powering large data center campuses.
In some regions, hydropower provides a stable, low-carbon energy supply. Many hyperscale and colocation operators are now leveraging these sources through Power Purchase Agreements, green tariffs, or on-site generation, aligning sustainability commitments with operational reliability and long-term cost efficiency.
Emerging Next Generation Solutions
Nuclear, tidal, and hydrogen energy are emerging as next-generation solutions to meet the data center industry’s increasing need for sustainable and reliable power. Small Modular Reactors (SMRs) provide stable, zero-carbon baseload power, making them ideal for hyperscale data center operations. Tidal energy, with its predictable output and minimal environmental impact, offers a promising option for coastal data center locations. Green hydrogen is gaining attention as a clean, long-duration backup power solution, with the potential to replace diesel and enable truly net-zero operations. Together, these technologies represent the future of resilient, carbon-free energy strategies for data centers.
The Union Budget 2025-26 has allocated Rs. 20,000 crore for research and development in SMRs, aiming to have at least five indigenously designed operational SMRs by 2033. This initiative supports India’s broader goal of achieving 100 GW of nuclear power capacity by 2047, highlighting the strategic role of nuclear energy in powering data centers sustainably.
Renewable Energy Certificates (RECs) enable data centers to offset their carbon emissions by purchasing credits equivalent to 1 MWh of renewable energy. Exchange-traded power provides data centers with a flexible and cost-effective way to procure energy. Through power exchanges and Power Purchase Agreements (PPAs), operators can access renewable energy at lower costs while supporting sustainability goals.
Conclusion
India’s growing power capacity and strong renewable energy resources make it well-positioned to support the expanding data center industry. While some regions may face peak-hour stress or local grid limitations, careful planning, dedicated power arrangements, and clean energy solutions can ensure reliable and sustainable operations. Overall, India seems ready to meet the power needs of its data center boom in the coming years.
Written by Manan Gangwar
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