Ratul Puri on AI Demand and the Future of India’s Power Infrastructure
India is digitizing rapidly, and the country's demand for data centers is rising. But let's not forget about the importance of dependable electricity, even if it's out of sight. The recent surge in the demand for data centers explains this. As the demand for data centers increases, India should think about the power infrastructure as much as the generation capacity.
Growing AI Demand Poses Greater Challenges to the Power System
There are additional challenges to the power system as a result of the growing demand for AI. The Ministry of Power projected in July 2026 that AI data centers would increase peak electricity demand by 26.3 GW by 2031-32. Increasing demand would need to be integrated into the power system primarily through renewable energy. From the power sector, this further emphasizes the importance of viewing data centers with more priority. Increasing AI workloads and demands would require additional capacity at data centers. Therefore, as Ratul Puri, Chairman, Hindustan Power argues, there should be more priority placed on the electricity supply side with respect to dependability as compared to the electricity demand side, particularly because the nature of the electricity demand is continuously evolving.
Data centers aren’t the only economic sector driving increasing energy demand. According to the International Energy Agency, India’s annual electricity consumption is expected to rise by 6.4% per year between 2026 and 2030, by more than 570 TWh during this period. The growth in electricity demand is occurring across various sectors. Like India, other countries are experiencing new electricity demand from various industries (including data centers and AI), cooling, households and transportation as well as other forms of electrification. From an energy perspective, data centers and AI (along with other applications of electrification) increase demand in a more concentrated way. Depending on how the demand and supply of electricity is managed, the challenge will not only be in the type of infrastructure but the quantity as well. As Puri noted about India’s energy sector, given the rapid increase in energy demand, flexibility in the energy system will be of utmost importance.
Impact of Renewable Energy on Digital Economy in India
While India is also rapidly increasing its renewable energy capacity, IRENA reported a record 692 GW of renewable energy capacity was added globally in 2021, with around 510 GW of that capacity from solar. Increasing renewable energy in India can help meet the increasing electricity demand of the digital economy. However the demands of the digital economy show the limits of renewable energy. Solar energy, for example, is variable and depends on several factors, and the demand for electricity by data centers is consistent and continuous. From this, we understand the importance of both storage and transmission. Storage shifts the time of use of the electricity and transmission shifts the place of use of the electricity. Both are critical.
It is inevitable that as data centres continue to proliferate, the need for high-capacity, high-speed data transmission will grow. Unlike data centres, renewable energy projects have geographical flexibility. Data centres will likely be situated in commercial and digital hubs. As such, a high capacity and high-speed electricity transmission network is needed to connect areas of high electricity demand to areas of renewable energy projects. This is also the case for other large consumers of electricity. Hence, there is a need to focus on developing the network to deliver electricity to large consumers as well as generating capacity from renewable sources.
The growth in data use and the digitization of services, along with the concurrent growth of renewable energy, create an opportunity to move beyond dependence on traditional fossil fuels. India has the potential to serve the world, especially through its integrated approach to meet the needs of its burgeoning population, alleviate poverty, and meet the booming demand for digitized services. This integrated approach has to be taken to achieve, both, the goals for renewable energy and the demands for digital services. As Ratul Puri elaborates, both renewables and digitization demand an approach that heavily relies on integration and flexibility.
India is in the midst of a digital and an energy transition. With the continued growth in demand for energy for data centers and the integration of Artificial Intelligence (AI), the power system is facing new challenges. With the increase in the share of renewable energy in the system, the challenges of system balancing will further increase. Therefore, apart from increasing the total capacity of the system, it is equally important to invest in modern infrastructure to ensure that the electricity is available to the consumer when it is required. Beyond generation capacity, it is equally important to invest in modern energy infrastructure for the economy. In the case of the Indian digital economy, this implies increasing the focus on integrated and flexible energy infrastructure to integrate and support electricity transmission, storage and renewable energy.
Impact of Renewable Energy on Digital Economy in India
While India is also rapidly increasing its renewable energy capacity, IRENA reported a record 692 GW of renewable energy capacity was added globally in 2021, with around 510 GW of that capacity from solar. Increasing renewable energy in India can help meet the increasing electricity demand of the digital economy. However the demands of the digital economy show the limits of renewable energy. Solar energy, for example, is variable and depends on several factors, and the demand for electricity by data centers is consistent and continuous. From this, we understand the importance of both storage and transmission. Storage shifts the time of use of the electricity and transmission shifts the place of use of the electricity. Both are critical.
It is inevitable that as data centres continue to proliferate, the need for high-capacity, high-speed data transmission will grow. Unlike data centres, renewable energy projects have geographical flexibility. Data centres will likely be situated in commercial and digital hubs. As such, a high capacity and high-speed electricity transmission network is needed to connect areas of high electricity demand to areas of renewable energy projects. This is also the case for other large consumers of electricity. Hence, there is a need to focus on developing the network to deliver electricity to large consumers as well as generating capacity from renewable sources.
The growth in data use and the digitization of services, along with the concurrent growth of renewable energy, create an opportunity to move beyond dependence on traditional fossil fuels. India has the potential to serve the world, especially through its integrated approach to meet the needs of its burgeoning population, alleviate poverty, and meet the booming demand for digitized services. This integrated approach has to be taken to achieve, both, the goals for renewable energy and the demands for digital services. As Ratul Puri elaborates, both renewables and digitization demand an approach that heavily relies on integration and flexibility.
India is in the midst of a digital and an energy transition. With the continued growth in demand for energy for data centers and the integration of Artificial Intelligence (AI), the power system is facing new challenges. With the increase in the share of renewable energy in the system, the challenges of system balancing will further increase. Therefore, apart from increasing the total capacity of the system, it is equally important to invest in modern infrastructure to ensure that the electricity is available to the consumer when it is required. Beyond generation capacity, it is equally important to invest in modern energy infrastructure for the economy. In the case of the Indian digital economy, this implies increasing the focus on integrated and flexible energy infrastructure to integrate and support electricity transmission, storage and renewable energy.