Data centre capacity in India is expected to double to ~1,700-1,800 megawatt (MW) by fiscal 2025 from ~870 MW last fiscal with an investment of over Rs 40,000 crore.
The spurt in data and cloud usage created huge demand for data centers. Wireless mobile data traffic grew ~31 percent to ~253 exabytes in 2021.
The launch of 5G services — likely by the end of fiscal 2023 — will further boost demand for data and storage capacities.
“Data centre industry is expected to add ~850-900 MW capacity during fiscals 2023-25, Nitesh Jain, Director, CRISIL Ratings, said.
Mumbai, which accounts for around half of the existing capacity, is expected to add ~300 MW. This growth would be supported by proximal access to sub-sea cables, optic fibre connectivity, uninterrupted power supply and availability of skilled manpower.
Hyderabad, Chennai and Pune will follow suit, and likely to add ~400 MW capacity cumulatively.
Of the ~Rs 40,000 crore investments, a third will be to acquire land, a fifth for substations, and the balance for civil work, purchase of equipment and fit-outs. Capex will also be required for captive renewable energy sources, which are cheaper than grid energy.
“With electricity accounting for 45-50 percent of the operating expense of data centres, there is sharper focus on an optimum mix of grid power + renewables. The share of renewables in data centre power consumption is expected to increase to ~35-40 percent by fiscal 2025 from less than 15 percent now,” Rakshit Kachhal, Associate Director, CRISIL Ratings, said.
Use of renewable power will improve the operating margins of the sector by ~200-300 basis points by fiscal 2025 and help sustain project’s returns on capital employed at 13-15 percent.