Advancing Resource-Efficient Growth of India’s Data Centre
India’s data centre (DC) sector is fast becoming a critical pillar of the digital economy, with installed capacity projected to reach 8 GW by 2030 as AI-driven demand accelerates. This rapid expansion brings a new set of sustainability challenges, from rising electricity demand and intensifying water stress to growing carbon footprints in key hubs. Cooling systems sit at the centre of this challenge, accounting for roughly 30–40% of a facility’s total energy use. At the same time, AI workloads are driving a sharp increase in rack densities, often exceeding 120 kW per rack compared to the current average of 4–8 kW, rendering conventional air-cooling approaches increasingly inadequate.
Despite this, cooling system efficiency across the existing fleet remains weakly governed. As capacity scales and infrastructure decisions made today lock in performance for decades, the absence of robust, performance-oriented governance risks embedding long-term inefficiencies. This brief examines how targeted interventions, including the adoption of advanced and climate-appropriate cooling technologies, mandatory performance disclosure, and better alignment of incentives, can unlock significant efficiency gains. Drawing on global policy approaches and technological advancements, it outlines actionable recommendations to address these emerging challenges.
Key Insights
- Cooling lies at the heart of the data centre sustainability challenge
Rapid expansion is placing measurable pressure on electricity systems and local water resources, with cooling systems accounting for a substantial share of operational energy consumption.
- System-level planning is essential
Embedding sustainability requires coordinated action, including annual disclosure of PUE and WUE, the development of a dedicated data centre rating system, and integration of cooling loads into broader power and water planning.
- Technology transitions can deliver outsized impact
Adopting climate-appropriate cooling systems, high-density solutions, and water optimisation measures can reduce cooling energy demand by 40–45%, with the potential to save up to 1,760 MW of power and 36 billion gallons of water annually by 2030.
