India’s data centre sector is undergoing rapid expansion, driven by rising demand for artificial intelligence, cloud computing and digital services. BloombergNEF has identified India as the leading data centre market in the Asia-Pacific region outside China. India’s live IT capacity has reached about 1.7 GW, with another 1.3 GW under construction and 3.2 GW of projects having secured land, power and permits. Government estimates point to a similar growth trajectory. Data centre power capacity has increased from about 375 MW in 2020 to 1.57 GW as of August 2026. The Central Electricity Authority expects it to reach 17 GW by 2031-32.
This expansion is also putting a strain on India’s power and water resources. Data centres currently account for 0.5-1 per cent of the country’s electricity consumption, but this share could rise to 2.5-3 per cent by 2030, with annual electricity consumption reaching 40-45 TWh. Rising water demand is another major concern. The paper on “Scaling India’s Data Centre Ecosystem” published by CEEW highlights that data centres consumed an estimated 150 billion litres of water in 2025, and this could more than double by 2030. A 100 MW facility requires around 2 million litres of water a day for cooling.
As hyperscale facilities grow, the sector will need reliable round-the-clock power, adequate transmission capacity, cooling infrastructure and large tracts of land. Given this scenario, renewable energy backed by pumped storage projects (PSPs) could provide firm power for these facilities, while offshore and floating data centres could help address land and cooling constraints in coastal locations. These models could help reduce pressure on land, transmission networks and freshwater resources.
PSPs can provide firm renewable power
Co-locating data centres with PSPs could offer another opportunity to meet their round-the-clock power and water requirements. PSP output can be scheduled to match the continuous load of data centres, reducing depending on the availability of renewable power. The opportunity could extend beyond a power supply arrangement. PSPs are built around large reservoirs and associated water infrastructure, which could be leveraged to meet the power and cooling needs of data centres. Such a model could reduce dependence on the grid while providing access to water for cooling.
This model is not yet a part of mainstream planning for Indian PSPs or data centres, with the two sectors largely developing independently. However, as the PSP pipeline expands and data centre operators seek large sites with assured power and water supply, co-located PSP and data centre campuses could emerge as an additional option. With India’s storage requirement also rising sharply, integrating new large power consuming loads such as data centres with storage projects could become an area of interest in future planning.
Offshore wind could support coastal data centres
While India has no operational offshore wind projects yet, offshore wind could present a future opportunity to power data centres located along the country’s coastline. China has already demonstrated this model. In May 2026, it commissioned the world’s first commercial offshore wind powered underwater data centre, about 10 km off Shanghai’s coast. The 2.3 MW facility is planned to scale up to 24 MW, with more than 95 per cent of its electricity sourced from an adjacent offshore wind farm. Seawater-based cooling is reported to reduce electricity consumption by 22.8 per cent while eliminating freshwater use for cooling. In the UK, Aikido Technologies is planning floating, wind-powered offshore data centres built into the ballast legs of semisubmersible turbines, with a 100 kW prototype off Norway by the end of 2026, and a 15-18 MW commercial project off the UK coast by 2028.
India will need time to develop a viable commercial model for such projects. However, the potential is significant. Tamil Nadu has an estimated 35 GW of offshore wind potential, while Chennai is emerging as a major data centre market, creating an opportunity to align offshore renewable generation with growing coastal electricity demand. In the longer term, offshore wind could supply power to nearby data centres and other electricity intensive industries, helping reduce transmission requirements and land constraints in densely developed coastal areas.
Floating data centres offer another route
As India scales up floating solar capacity, floating data centres could emerge as a more experimental option. Instead of building large facilities on urban land, servers could be housed on vessels, barges or purpose-built platforms. This could help address land constraints while creating opportunities to integrate renewable power with water-based cooling systems. Tom Lang, Chief Technology Officer, AccuSolar, highlights that an immediate opportunity lies in using floating solar photovoltaic (FSPV) to supply renewable power to conventional data centres. FSPV can also help conserve water, with floating solar installations saving, on average, more than 500,000 gallons of water per acre covered annually. This could be particularly relevant as data centre operators look for ways to reduce their water footprint.
The economics of FSPV are also becoming more attractive. According to Lang, floating solar panels can produce around 12 per cent more energy per square foot than ground-mounted systems because of the cooling effect of water. Maintenance costs can also be about 15 per cent lower, while FSPV avoids some of the costs associated with land acquisition, clearing and levelling. Co-location with water bodies could also help in cooling the data centre, as water temperatures are typically cooler than ambient temperatures, while providing access to water for circulation cooling.
This creates an opportunity for data centre developers to locate floating solar facilities close to their campuses or, where site conditions permit, integrate them with water-based data centre infrastructure. Such co-location could also reduce transmission requirements and associated costs.
Future outlook
There is a need to test these models, including their commercial viability, transmission planning and regulatory groundwork, to determine how quickly they can be scaled. The role of major players would be important in developing these new models. According to BloombergNEF, Reliance Industries and the Adani Group have committed $210 billion to data centre development in India, accounting for 45 per cent of total announced investment. The Adani Group has a strong presence in storage and renewable energy, while Reliance has committed significant investments to new energy infrastructure. Their current data centre investments are focused on conventional hyperscale facilities rather than offshore or floating models.
The overlap between water infrastructure, renewable energy generation and data hubs could create opportunities for integrated projects. This could be particularly relevant for coastal locations. Future projects could potentially combine renewable generation, energy storage, transmission infrastructure and data centres within a coordinated development model on a waterbody. Such an approach would require changes to existing planning and regulatory frameworks. Current building efficiency standards and data centre policies have largely been developed around land-based facilities. Floating and offshore facilities would require additional standards covering marine infrastructure, cooling, safety, grid connectivity and environmental requirements.
For India, the opportunity is not simply to meet the growing electricity demand of data centres. It is also to use this new demand to accelerate investment in renewable generation, storage and innovative water-based infrastructure, while reducing pressure on land, transmission systems and water resources.