Business News | Reliable, Cost-competitive Power Defining Factor in India's Data Centre Development: Wood Mackenzie Research
Get latest articles and stories on Business at LatestLY. "Land and capital are no longer the limiting factors for data centre developers in India. What determines site selection and delivery timelines now is access to firm, round-the-clock power at the node level," said Dr Rashika Gupta, Vice President of Research at Wood Mackenzie.
New Delhi [India], July 30 (ANI): Reliable, round-the-clock power has become the "defining factor" in India's data centre development industry, replacing land and capital, according to a new Wood Mackenzie report, which projects the country's operational data centre capacity to grow from 2.2 GW in 2025 to 12 GW by 2030.
The report, India's Data Centre Landscape: Powering the Digital Economy, said India's operational data centre capacity is expected to rise from 2.2 GW in 2025 to 12 GW by 2030, driven by rapid growth in artificial intelligence (AI), hyperscale cloud investments and the country's expanding digital economy.
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According to the report, access to reliable and affordable electricity now plays a bigger role in data centre development than the availability of land or capital.
"Reliable, cost-competitive power has become the defining factor in data centre development, overtaking land and capital as the industry's primary constraint," Wood Mackenzie said in the report.
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"Land and capital are no longer the limiting factors for data centre developers in India. What determines site selection and delivery timelines now is access to firm, round-the-clock power at the node level," said Dr Rashika Gupta, Vice President of Research at Wood Mackenzie.
She added that developers securing power early through captive generation or long-term renewable power purchase agreements (PPAs) "will lock in a structural cost and sustainability advantage for the life of their assets."
The report estimates the sector will grow at a compound annual growth rate (CAGR) of around 40 per cent through 2030. It also expects AI-dedicated data centre capacity to surge nearly 24-fold during the period, increasing from 275 MW in 2025 to 6,546 MW by 2030 as demand for AI computing accelerates.
According to the report, data centre electricity demand is projected to rise from 10 terawatt-hours (TWh) in 2025 to 191 TWh by 2040, accounting for nearly 7 per cent of India's total electricity demand.
"India's data centre market becomes a structural investment thesis," said Souhardya Pal, Research Associate at Wood Mackenzie.
"The convergence of hyperscale capital, AI workload growth and a decade of policy support have created the conditions for India to rival any market in Asia-Pacific. The question for developers and investors is no longer whether to enter India, but where and how," he said.
The report said Maharashtra and Tamil Nadu currently account for around 65 per cent of the country's installed IT load, but future investments are expected to expand into Andhra Pradesh, Telangana, Uttar Pradesh and Karnataka.
It also identified water availability as an emerging investment risk, saying higher AI workloads are increasing cooling requirements and making water access an important factor in selecting locations for new facilities. (ANI)
(The above story is verified and authored by ANI staff, ANI is South Asia's leading multimedia news agency with over 100 bureaus in India, South Asia and across the globe. ANI brings the latest news on Politics and Current Affairs in India & around the World, Sports, Health, Fitness, Entertainment, & News. The views appearing in the above post do not reflect the opinions of LatestLY)