Jain argued that future gigawatt-scale AI data centers should be built closer to renewable energy hubs instead of densely populated urban centres, where demand is already high and expanding transmission infrastructure is increasingly difficult.
Taking Mumbai as an example, Jain said nearly 5,000 megawatts (MW) worth of memorandums of understanding (MoUs) have already been signed for data centers in and around the city, while Mumbai’s own peak power demand is around 4,700 MW. Adding such large power demand alongside rising household electricity consumption, he said, could put the city’s grid under serious strain.
Mumbai is not alone. Cities such as Hyderabad, Delhi-NCR, Bengaluru and Chennai are also emerging as major data center hubs and face similar pressures on electricity and water infrastructure, according to industry estimates.
A report by the Institute for Energy Economics and Financial Analysis (IEEFA) said a typical large data center can consume as much electricity as an aluminum smelter, or roughly the equivalent of 100,000 homes. As more facilities cluster around the same city, the pressure on local power grids is expected to increase.
Narendra Sen, founder of AI cloud service provider NeevCloud, has echoed similar concerns, warning that India’s AI-driven data center expansion could put mounting pressure on the country’s power infrastructure.
“Data centers are very power-hungry and consume more electricity than many of our cities. As more people are using AI now, more queries mean more analyzes and that will translate into 20 to 30 times more power consumption in the future,” Sen said in comments reported by Malaysian newspaper. The Star.
Jain also pointed to another challenge. Building new extra-high-voltage transmission lines is difficult because they require straight, uninterrupted corridors and often face land acquisition and right-of-way issues.
India’s power planners have already begun factoring the shift into long-term capacity planning. According to the Central Electricity Authority’s (CEA) Long-Term National Resource Adequacy Plan for 2026-27 to 2035-36, emerging electricity loads such as data centres, green hydrogen production and other new industries are now explicitly incorporated into the country’s demand forecasts.
The CEA projects India’s peak electricity demand to rise from 289 GW in 2026-27 to 459 GW by 2035-36, while annual electricity requirement is expected to increase from 1,929 billion units to 3,365 billion units over the same period. The report identifies data centers as one of the key drivers of future electricity demand.
To prepare for this growth, the CEA requires states and power distribution companies to submit rolling 10-year demand forecasts each year so generation, storage and transmission capacity can be planned in advance.
It also projects that non-fossil fuel sources will account for around 70% of India’s installed power capacity by 2035-36, with solar capacity reaching about 509 GW.
Also read: Why power, not water, could slow India’s AI data center boom
