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Access to Reliable Power a Key Differentiator for Data Center Developers in India, Wood Mackenzie Says

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Having access to reliable, cost-competitive power has become a differentiator for data center developers in India, where electricity demand is set to surge as the computing facilities proliferate, Wood Mackenzie said on Monday.

The firm projects that operational data center capacity in the country will increase to 12 gigawatts by 2030 from 2.2 GW in 2025. This represents a compound annual growth rate of around 40%.

Of the total capacity, artificial intelligence-dedicated facilities will account for 6.5 GW, a 24-fold increase from the 2025 level of 275 megawatts.

This expansion will raise data center electricity demand 20-fold by 2040 from 10 terawatt-hours in 2025, Wood Mackenzie said, with around 7% of total power demand dedicated to data center infrastructure.

"Land and capital are no longer the limiting factors for data center developers in India. What determines site selection and delivery timelines now is access to firm, round-the-clock power at the node level," said Rashika Gupta, Wood Mackenzie's vice president of research.

"Developers, who secure their power strategy early through captive generation or long-term renewable power purchase agreements, will lock in a structural cost and sustainability advantage for the life of their assets," Gupta noted.

Meanwhile, water management emerges as a strategic risk due to data center cooling requirements.

Developers' ability to secure reliable power, manage water resources, and select strategic locations will dictate long-term success in India's data center markets, the research said.

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