Grid connectivity, land and water availability key hurdles for India's data centre expansion: Crisil Intelligence

Grid connectivity, suitable locations and water availability are among the major challenges facing India's expanding data centre industry, and state governments need to provide greater support to help projects take off, according to Ashish Mittal, Director of Consulting for Energy and Commodities at Crisil Intelligence.

Speaking exclusively to on the sidelines of a power sector event focused on artificial intelligence (AI), Mittal said the growing relationship between the power sector and data centre industry requires greater coordination to meet future infrastructure needs.

"Challenges on the data centres are around grid connectivity, site location, and water availability. Those were the three major key challenges around the data centre," he told ANI.


His remarks come as India's growing adoption of AI is driving demand for data centres, which require significant electricity and water resources to support their operations.

Mittal stressed that state governments could play an important role in addressing these challenges by facilitating access to essential infrastructure.

"So support upon enabling faster land availability, grid connectivity, water availability, I think the state governments can come together on offering such supports which will help go a long way in getting data centres on the ground," he said.

He clarified that the industry needs greater policy support rather than necessarily new policy reforms.

Highlighting the discussions at the event, Mittal said the focus was on the two-way relationship between data centres and the electricity grid.

"So there were deliberations upon the two-way connect between the data centre industry and the power sector. So what is expected out of data centres and what should the grid offer to the data centre business. So that was the key idea," he said.

On concerns about rising electricity and water consumption, Mittal said emerging technologies could help reduce the resources required by data centres.

"There are newer technologies which are coming up which are reducing the power requirements and water requirements," he said.

The observations highlight the importance of ensuring adequate electricity connections, land and water access as India seeks to expand its data centre capacity to support rising AI demand.