India's 500 GW Renewable Energy Target: A Game-Changer for Data Centers by 2030

As data centers in India continue to expand, their power consumption is projected to rise sharply, creating a significant demand for energy generation. Traditional sources like hydro and thermal power are no longer sufficient to meet this growing need. As a result, renewable energy has become essential, driving increased investment in sectors such as solar and wind power.

India is planning to reach 500 GW of renewable energy capacity by 2030, with a major contribution from solar power, aiming for 280 GW. This ambitious target will also open up opportunities for investments amounting to US$221 billion by 2030.

According to the Indian Wind Turbine Manufacturers Association (IWTMA) reports, India’s wind energy sector is making considerable progress towards the goal of 100 GW of power generation by 2030. Currently, the country has an installed wind power capacity of more than 50 GW and a yearly domestic production capacity of over 18 GW for wind turbines and their parts.

Impact of Renewable Energy Investment on Data Centers in India

- Operational Cost Stability: Energy accounts for 30-40% of a data center’s operational expenditure. By shifting to captive renewable energy or long-term Power Purchase Agreements (PPAs), data centers can lock in power costs at ₹3-4 per unit, shielding themselves from fluctuations in grid tariffs, which can be significantly higher at ₹7-10 per unit. - Regulatory Compliance & ESG Goals: With India’s target of Net Zero by 2070 and the “Green Data Centre” rating systems, operators are under pressure to prove green sourcing to attract hyperscale clients like Google, Amazon, and Microsoft, who have their own stringent 24/7 carbon-free energy goals. - Infrastructure Reliability: New investments often include hybrid setups combining solar, wind, and battery storage, which improve uptime reliability compared to pure grid dependence, especially in states with grid volatility.

How Data Centers Fulfill Their Energy Requirements

Data centers in India currently utilize a mix of four primary mechanisms to fulfill their clean energy needs:

- Captive Power Plants: Operators build their own solar/wind farms and wheel the power to the data center. - Open Access PPAs: Entering long-term (15-25 years) agreements with third-party Independent Power Producers (IIPs) to buy green power via the grid. - Green Tariffs: Though this is often more costly than the captive routes, the premium paid to the state DISCOMs for sourcing green power directly from the grid is still justified. - Renewable Energy Certificates: Acquiring certificates to counterbalance carbon emissions when the sourcing of green power directly is not possible.

Andhra Pradesh: Data Centre Policy 4.0

By 2030, Andhra Pradesh is poised to be the leader in India’s data center growth with a capacity of 6,000 MW and the support of huge investments from companies like Google and Adani.

- 100% Duty Exemptions: The policy grants a 100% exemption for hyperscalers on electricity duty, transmission charges, and renewable cross-subsidy charges for a span of 15 to 20 years, leading to significant cost reductions. - Power Tariff Concession: The policy provides a ₹1 per unit concession on power tariffs for 15 years, significantly cutting down the “burn rate” for power-hungry AI workloads. - Renewable Energy “Banking”: The policy aligns with the Integrated Clean Energy (ICE) Policy 2024, enabling data centers to “bank” excess renewable energy produced during the day and use it at night, crucial for 24/7 operations. - Green Hydrogen & Storage: Incentives are provided for the adoption of advanced storage and green hydrogen, making Andhra Pradesh the prime location for “Green Hydrogen Ready” data centers.

New Investment in Renewable & Clean Energy (2024-25)

- Oct 2025: AdaniConneX & Google announced a $15 billion partnership to develop India’s largest AI data center campus in Visakhapatnam, Andhra Pradesh. - Oct 2025: Raiden Infotech (Google-backed) received approval for an ₹87,520 crore investment from the AP State Investment Promotion Board. This includes a massive 1,000 MW capacity in Visakhapatnam and Anakapalli. - June 2024: CtrlS Data Centers commissioned a captive solar farm in Nagpur, which now powers 30% of their Mumbai campus, scaling to 60% by 2025. They plan to build 1 GW of solar capacity. - Feb 2024: Nxtra by Airtel signed new deals to source additional renewable energy via captive plants in Tamil Nadu (both wind and solar) and in Uttar Pradesh (only solar).

Conclusion

In Andhra Pradesh, the “Policy 4.0” era (2024–2029) effectively treats data centers as essential power infrastructure. The policy will eliminate transmission and wheeling charges, which usually account for 20-30% of the cost of open-access electricity, thus removing the greatest obstacle to the use of renewable energy. This forward-thinking approach is crucial for the sustainable growth of India’s data center industry.