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					</table>The rapid rise of artificial intelligence (AI) and India’s growing data center pipeline are driving substantial new electricity demand, making renewable energy with storage essential to power this sector.
According to government data, India’s installed data center power capacity increased from around 375 MW in 2020 to 1.57 GW as of August 2026 and is projected to reach nearly 8 GW by 2030.
Data center projects under construction have attracted nearly $70 billion in investments, while announced projects account for another $90 billion.
Industry estimates suggest that power requirements could be 1.5 times the installed capacity after accounting for cooling and auxiliary loads. Assuming an average server load of 65%, round-the-clock (RTC) electricity demand could reach approximately 9 GW by 2030.
Procurement Strategies
Industry stakeholders expect renewable energy to meet at least 50% of this demand, supported by state-level renewable energy procurement policies.
Nikhil Parate, Head of Energy and Sustainability India at <a href="https://www.coltdatacentres.net/" target="_blank" rel="noopener">Colt Data Center Services</a>, said renewable energy can also support long-term energy security and cost predictability for data centers.
Data center operators are increasingly looking to combine distribution company (DISCOM) supply with renewable energy procured through captive and third-party power purchase agreements to ensure a stable and continuous power supply.
A spokesperson from <a href="https://www.sttgdc.com/in-en" target="_blank" rel="noopener">STT GDC</a> said that the company expects to source more than 85% of its power from wind-solar hybrid projects, with the remainder met through DISCOM green tariffs or renewable energy certificates.
The company achieved approximately 70% renewable energy procurement in 2025 and expects to exceed 75% in 2026. It aims to make its data center operations carbon-neutral by 2030.
STT GDC added that it has begun sourcing evening peak power through storage-backed firm and dispatchable renewable energy (FDRE) solutions. Future renewable energy tie-ups will combine wind and solar with battery energy storage systems (BESS) or pumped storage projects.
Dheeraj Ahuja, Vice President, Business Development – B2B Business, Power Procurement Strategies at <a href="https://www.renew.com/" target="_blank" rel="noopener">ReNew</a>, said the company is developing a 1.3 GW portfolio of RTC projects across three states, comprising 900 MW of wind, 400 MW of solar, and up to 100 MWh of storage. The portfolio is designed to deliver an 80% output profile, compared with an industry average of 25-30%.
Renewable energy project developers also expect data center electricity demand to increase 13-fold by FY 2032.
Akshay Hiranandani, CEO of <a href="https://www.serenticaglobal.com/" target="_blank" rel="noopener">Serentica Renewables</a>, said FDRE and RTC models will become critical as data center operators seek clean power without compromising reliability.
Can Renewables Meet Demand?
Industry executives believe India&#8217;s renewable energy sector can meet the growing demand, but interstate transmission constraints remain a concern.
STT GDC said operators will need to procure renewable electricity from both intrastate and interstate projects, depending on resource availability and data center locations.
While the company does not anticipate significant evacuation constraints for intrastate arrangements, interstate procurement could face bottlenecks in corridors connecting Rajasthan with other states and Maharashtra with the National Capital Region. Technical and regulatory restrictions can also constrain electricity sourcing in certain states.
Ahuja said addressing these bottlenecks could let renewable energy capacity scale fast enough to meet data center demand.
While Parate emphasized that sustained investment in grid infrastructure, storage, and renewable energy solutions will be key,
Hiranandani noted that developers need ready land, renewable power, and transmission connectivity, with speed to power becoming increasingly important in site selection.
“India needs to build this ecosystem in parallel, creating a single-window pathway that allows data center operators to plug in and scale quickly,” Hiranandani said.
Cost Savings Support Renewable Adoption
Beyond sustainability commitments, renewable energy procurement is also driven by potential savings compared with conventional grid tariffs.
STT GDC said savings can go up to 25% across states, depending partly on DISCOM fixed and demand charges.
Declining storage costs could eventually enable operators to reduce their dependence on grid power as backup, potentially lowering fixed charges.
Transmission Availability Shapes Site Selection
Data center expansion is increasingly concentrated in states with strong renewable energy resources and supportive policies.
STT GDC said Maharashtra, Tamil Nadu, and Karnataka are emerging as preferred locations. With new campuses requiring 200 MW to 1,000 MW, transmission infrastructure availability has become a critical site-selection criterion.
According to the company, Maharashtra accounts for approximately 60% of India&#8217;s data center capacity, followed by Tamil Nadu at 18%, Uttar Pradesh at 11%, Karnataka at 7%, Telangana at 3%, and West Bengal at 2%.
Maharashtra, Tamil Nadu, and Karnataka are expected to add more capacity, along with Telangana. Visakhapatnam in Andhra Pradesh is also emerging as a data center hub with opportunities for renewable energy development.
According to ReNew, Gujarat and Rajasthan could emerge as new data centre hubs if grid constraints emerge in other regions.
Deemed Distribution Licenses
Industry participants say a stable regulatory framework is essential to sustaining renewable energy procurement.
Data center operators have raised concerns about frequent changes to renewable energy and distribution open access regulations, including retrospective changes that affect existing power purchase agreements and project economics.
Ahuja said waiving cross-subsidy surcharges for data centers could encourage renewable energy adoption, given the sector&#8217;s capital-intensive nature.
Policy uncertainty is also prompting operators to explore deemed distribution licenses, which could offer greater flexibility in electricity procurement.
States including Uttar Pradesh, Maharashtra, Telangana, and Andhra Pradesh have provisions for distribution licenses for eligible data center parks under their data center or Information Technology /Information Technology Enabled Services policies.
Parate said such arrangements could streamline procurement and reduce barriers to securing reliable, cost-effective renewable energy at scale.
However, operating under a deemed distribution license would require data center operators to assume greater responsibility for maintaining uninterrupted power supply, potentially without relying on incumbent DISCOMs.
This would require expertise in renewable generation profiles, load management, storage technologies, and electricity procurement through exchanges and bilateral arrangements.
As India&#8217;s data center capacity expands, transmission availability, reliable RTC renewable power, and regulatory certainty will determine how effectively clean energy can meet the sector&#8217;s rising electricity demand.

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