Reliable power is equally as crucial, though less visible, as India rapidly digitizes and demand for data center infrastructure soars. The recent expansion of data centers explains this. As data-centre demand grows, India must focus not only on generation capacity but also on reliable power infrastructure.
The increase in demand for artificial intelligence (AI) has put even more of a strain on the world’s power systems. The Ministry of Power predicted that in 2031-32, AI data centers would increase the peak electricity demand by 26.3 GW. The increasing demand is expected to be integrated into the grid mainly through renewable energy. From a power sector perspective, this focuses on why data centers should be taken more seriously. Increasing AI workloads intensify the demand on data centers. According to Ratul Puri, Chairman, Hindustan Power due to the changing nature of electricity demand, more focus should be on making improvements on the electricity supply side with respect to dependability, rather than only focusing on increasing the supply side.
Data center growth is not the only source of new demand for electricity. Other areas of the economy are experiencing similar growth. Between 2026 and 2030, the International Energy Agency estimates India’s electricity consumption will increase by 6.4% and by over 570 TWh in that period. The growth in electricity demand is happening across sectors. New demand in India comes from various industries, cooling, households, and transportation, along with other forms of electrification. Data centers and AI increase this demand in a concentrated manner. The quality and the quantity of the infrastructure will be critical. As Ratul Puri stated about India’s energy sector, in a rapidly growing economy, the energy system must adjust to new patterns of consumption.
While India is also expanding renewable energy capacity, IRENA reported a record 692 GW of renewable energy capacity added worldwide in 2025, of which solar accounted for around 510 GW. In India, expanding renewable energy can help meet the growing electricity demand of the digital economy. However, the demands of the digital economy show the limitations of renewable energy. Solar energy is variable and depends on several factors, while the demand for electricity by data centers is consistent and continuous. From this, we understand the importance of both storage and transmission. Storage can shift the time of use of the power and transmission can shift the place of use of the power. Both are essential.
The growth of data centres will make transmission increasingly important. Renewable energy projects can be located anywhere in the country, while data centers will be located in the commercial and digital hubs. Therefore, there is a need for a power transmission network to connect areas of high electricity demand with areas of renewable energy generation. This is true for other large consumers as well. Therefore, the focus should not only be on adding renewable capacity, but also ensuring that large consumers can be reliably supplied with the electricity generated from renewable sources.
Transmission moves electricity from one location to another. The storage of electricity determines when that electricity can be made available. Understanding the difference between storage and electricity will become increasingly important as renewable energy sources begin to dominate the electricity mix. Also, storage can help to resolve the timing differences between the demand for electricity and its generation, allowing for electricity to be made available beyond the time when it was generated. Along with the integration of transmission, storage can meet the varying demands of the electricity system. Together, transmission and storage can give the power system greater flexibility as demand patterns change. From Ratul Puri’s perspective, the same integrated approach is critical to help India fulfill the growing digital and renewable energy demands.
India is simultaneously undergoing digital and energy transitions. The increase in demand for electricity for data centers and the increasing integration of Artificial Intelligence (AI) is placing new demands on the power system. With the increase in the share of renewable energy, balancing the system will become even more challenging. The focus, therefore, should not only be on increasing the total capacity of the system. It should be on investing in the modern infrastructure needed to ensure that electricity can be delivered to those who need it, when they need it. Ratul Puri has stated that, beyond generation capacity, there is a greater need to focus on other energy infrastructure to support the economy. In the case of India’s digital economy, this means greater emphasis on integrated and flexible infrastructure to integrate and support renewable energy, as well as electricity transmission and storage.
As Ratul PuriEnergy storage has stated, in the future, it will not be sufficient to produce a lot of electricity in India. It will be more important to bring reliable electricity to where it is needed.