India's power ministry projects AI data centers will add 26.3 GW of electrical load by fiscal year 2031-32, flagging grid stability as a key concern.
Artificial Intelligence data centres will add an additional load of 26.3 gigawatts by 2031-32, according to India's Ministry of Power, which informed parliament on Monday. The ministry expects this load to be integrated into the national grid and served primarily through renewable energy capacity. The latest projection nearly doubles the government's earlier March estimate of 13.56 GW.
The revised figure is based on data centre projects submitted by various states, the ministry said. The government is conducting ongoing consultations with stakeholders including state transmission utilities, distribution operators, and data centre developers regarding reliable power supply, transmission requirements, and grid balancing. A key concern is that data centre power demands are highly variable—sharp, spiky loads with significant ramps that complicate grid management.
Policy-level discussions have also focused on locating data centres away from urban centres to avoid transmission congestion. Most data centres cluster near IT hubs, which could create bottlenecks as capacity expands. There is also support for positioning data centres near green energy sources, a dual benefit that would avoid transmission congestion while enabling renewable-powered operations.
India's data centre sector is expanding rapidly. Capacity grew from 375 megawatts in 2020 to approximately 1.5 GW by 2025. Wood Mackenzie, a global energy consultancy, projects capacity will reach 12 GW by 2030 at a compound annual growth rate of 40%. AI-dedicated capacity is expected to expand nearly 24-fold over the same period, rising from 275 MW to 6,546 MW, driven by hyperscale cloud providers, enterprise digitalisation, and accelerating AI demand.
India's digital economy, valued at INR 32 trillion in 2025 and accounting for approximately 12 per cent of GDP, serves over 1.03 billion active internet users and processes around 22 billion UPI transactions monthly. The domestic AI market is projected to reach INR 11.7 trillion by 2032. Data centre electricity demand is forecast to grow 20-fold by 2040 from 10 TWh in 2025, accounting for 7 per cent of total electricity demand.
Grid operators have raised concerns. Samir Chandra Saxena, Chairman and Managing Director of Grid Controller of India Ltd, warned that data centre loads are "variable, spiky, and have sharp ramps" and can make "silent exits" from the grid. Since most are inverter-based, a sudden withdrawal of 1–1.5 GW or more could "simply walk out of the system quietly and create a disturbance" for grid stability. Abhishek Ranjan, CEO of BSES Rajdhani Power Ltd, similarly cautioned that rapid hyperscale expansion could strain the grid without careful planning.