AI processing requires vast energy, with estimates suggesting that training a single AI model can consume up to 284,000 kWh. Data centres alone account for 1% of global electricity demand. The energy requirements for AI computing necessitate the establishment of hyperscale data centres (HSDs). These demand RE at scale and speed. Global data centre energy needs could reach 4,000 TWh by 2030, or 5% of global electricity demand.
RE power plants have the quickest timelines for construction and startup because of their modular design. However, many regions find it difficult to keep pace with the rapid building of these plants, particularly in ensuring enough transmission lines to deliver power to customers. India has set ambitious goals for RE, aiming for 50% of its electricity to come from non-fossil fuels by 2030. With over 300 days of sunshine each year and strong wind speeds, India has a vast potential for solar energy that can be used to support AI processing.
India’s true strength comes from local green energy leaders in private and public sectors, which can implement large-scale, world-class energy projects. The RE industry is backed by a modern national grid and an effective regulatory framework. India’s AI ecosystem is growing rapidly, with 1,000+ AI startups. Additionally, 20% of global AI talent is based in India, which makes it an attractive place for AI companies. The country’s AI market is expected to reach $7.8 bn by 2025.
India’s data centre market is expanding quickly due to the rising demand for digital services, ecommerce and cloud computing. According to a report by MarketsandMarkets:
- Market is expected to reach 1,432 MW of installed capacity by 2025, growing at 21.1%.
- By 2030, it is projected to reach 3,243 MW, with a growth rate of 15.6%.
- A recent FT article suggests that India will become the top data centre market in the Asia-Pacific, led by HSDs.
- Data centres have specific needs that set them apart from other infra projects.
- Designed for high reliability, security, modularity and redundancy standards.
Backup power is essential. While diesel generators are the main backup tech used now, green options like batteries (providing 6 hours of backup) and hydrogen fuel cells (providing 48 hours of backup) are being explored by tech companies to reduce carbon emissions. Google’s AI-powered data centre in Hyderabad operates on 100% RE. Microsoft’s centre in Pune utilises solar power for its energy needs.
- Water availability is critical, but this poses a challenge for expanding HSDs. So, integrating tech like fuel cells, which produce water as a by-product, could be a promising solution.
- GoI’s ‘Make in India’ initiative promotes the development of green data centres and AI infra, providing a supportive framework for growth in this sector.
To succeed in this sector, India should:
- Develop a policy for net-zero HSDs. This means creating large centres that do not contribute to GHG emissions.
- Identify key locations that can provide continuous green power, along with reliable backup energy options.
- Attract and develop skilled workers who can build advanced data centres that are highly secure and efficient.
To promote innovation, GoI should:
- Fund pilot projects to find ways to set up data centres that use less energy and water.
- Build trust in data protection by implementing effective policies and regulations.
With its strengths in clean energy and a growing AI ecosystem, India is well- positioned to lead in RE-powered AI processing. By taking advantage of its RE resources and addressing the challenges faced by AI data centres, India can lower its carbon footprint, boost its reputation as a hub for sustainable business and innovation, and create jobs in the clean energy and AI sectors.
