Moody’s Ratings: India Poised to Lead South-East Asia in Renewable Energy Supply for Data Centres
Moody’s Ratings has issued a report emphasizing India’s strategic advantage in the rapidly growing data center market across South and Southeast Asia (S&SEA). India, being the third largest in renewable energy installed capacity, is well-positioned to supply green energy to data centers in the region. The report anticipates that regional data center capacity will double to over 7 GW by 2030, contingent on the availability of power, grid stability, and effective execution capabilities. As of now, India holds over 90% of South Asia’s installed data center capacity, with an operational load estimated at around 1.2 GW, reflecting substantial investments from global hyperscalers.
This growth signifies a positive shift for common citizens and the broader market, where the demand for data storage and processing capabilities is set to rise with the digital economy’s expansion. As data centers utilize less than 2% of India’s current generation capacity, there remains significant room for the sector to grow without severely impacting the overall energy supply. The potential for data center energy consumption to remain below 5% of the total market—even as capacity grows—will likely stabilize electricity demand and may enhance sustainability goals, given that India can leverage renewable energy sources.
Looking forward, the Indian government and the Reserve Bank of India (RBI) are expected to focus on scaling up the power infrastructure to support this sector, which includes planned investments in the power grid to enhance renewable energy access. India’s classification of data centers as infrastructure will facilitate lower-cost financing options, potentially attracting more investments. Additionally, state-level incentives aimed at reducing capital intensity will be crucial in expanding the sector across various states, particularly in high-demand regions like Mumbai. These steps will not only bolster India’s positioning in the global data center market but also contribute to sustainable economic growth.