Hyderabad to host 1-GW data centre; promises jobs but environmental concerns loom

Hyderabad is set to host one of the country’s largest data centres with a 1-GW capacity, promising a major technology push and thousands of jobs. However, the project has triggered concerns over its massive electricity and water requirements, with experts warning of environmental strain in a city already facing resource challenges.

Hyderabad: The decision to set up one of the country’s largest Data Centres with a 1-GW capacity in Hyderabad promises a technology impetus besides thousands of direct and indirect employment. 

However, the move does come with a flip side – concerns about the environment that are being debated globally in correlation with such facilities. Questions are now surfacing as to how Hyderabad, which neither has water resources in abundance nor power self-sufficiency, could meet the high demands of such a massive Data Centre campus. 

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Has the State government worked out the finer aspects and drawn up a blueprint to sustain the energy and water resources apart from addressing other environmental concerns. The city is already home to over 30 Data Centres and questions are now being raised on the addition of a huge 1-GW facility further straining the resources.

Huge electricity consumption to run 24×7

A Data Centre typically comprises multiple computer servers, data storage devices and network equipment that aid in providing IT services to organisations to store, manage, process and transmit large amounts of data. These centres consume a large amount of electricity to operate round-the-clock.

A 2024 study  – Environmental Burden of United States Data Centres in the Artificial Intelligence Era – conducted by researchers in the US revealed that 2,132 US data centres accounted for more than four percent of total US electricity consumption between September 2023 and August 2024. Of the total electricity consumption, 56 percent was drawn from fossil fuels.

The International Energy Agency (IEA) has projected the global electricity consumption for Data Centres to double to reach around 945 terawatt hours by 2030. This is what Japan consumes annually. In addition, the projected consumption represents three percent of the total global electricity consumption in 2030.

Increasing carbon intensity

As most of the electricity is generated from fossil fuels, there is a huge environmental impact as it increases the carbon intensity and global warming. The study in the US revealed that 56 percent of electricity consumption by 2,132 US Data Centres between September 2023 and August 2024 was drawn from fossil fuels that generated more than 105 million tons of CO2e, which was 2.18 percent of US emissions in 2023.

“As the Data Centres operate round-the-clock, they generate a lot of heat and temperature around such centres is more compared to other areas. We recently petitioned with the union government seeking a notification of a distinct environmental impact assessment category for ‘Heat-Generating Centres’ including Data Centres, server farms, and comparable continuously heat-rejecting facilities under the EIA Notification, 2006. We have sought a mandatory public hearing for such centres,” said Dr. Donthi Narasimha Reddy, Public Policy Expert.

Requires millions of litres of water for cooling

As the data centres operate 24×7 and 365 days, it raises the temperature in the room, mandating a cooling strategy via chilled air through large ducts or releasing chilled water via piped cooling loop.

A recent study by the IEA estimates that a 100-megawatt Data Centres could consume roughly 2 million litres per day. Considering the IEA estimates, a 1-GW data centre in Hyderabad may require 20 million litres a day and 7.3 billion litres per year.

“The city has already witnessed a water crisis even before the summer season commenced this year. We cannot stop the development but there is a need to increase the water footprint in the city. The companies that are setting up Data Centres should also take up water conservation projects,” said a city-based water conservationist and environmentalist.