Ratul Puri: India’s Growing Power Demand from AI and Data Centres

India's recent drive for digitization has created a surge in demand for data center infrastructure. However, the development of reliable electric power infrastructure is equally critical. The recent expansion of data centers provides evidence for this. The Indian power system must address not just the generation capacity, but also the transmission and distribution systems, to serve the burgeoning data center demand.

The Rising Demand for AI

The increasing demand for AI services places additional strain on the power system. The Ministry of Power estimated in July 2026 that by 2031-32, AI-related data centers would increase system peak power demand by 26.3 GW. The concern for the power sector is to what extent the grid can integrate the additional demand for power. The data center has become a focal point for the power sector, and AI is expected to further intensify this demand. According to Ratul Puri, Chairman, Hindustan Power, because of the variability in the nature of power demand, more efforts should be devoted to making improvements on the supply side of the power system (focusing more on reliability) instead of only on the generation side.

Along with data centers, other segments of the economy create new electricity demands. According to the International Energy Agency, India’s annual electricity consumption is expected to grow by 6.4% during 2026-2030, by more than 570 TWh during this period. The IEA says the increase in demand is occurring across different sectors of the economy. New demand in India comes from different industries, cooling, households, and transportation, as well as other forms of electrification. Data centers and Artificial Intelligence increase demand in a concentrated way. The quality and the quantity of the infrastructure will be critical. In a rapidly growing economy, like India, the energy system will have to evolve to satisfy new patterns of consumption, like in other systems.

Ratul Puri on Renewable Energy and India’s Digital Economy

India is also increasing renewable energy capacity. In 2025, a record 692 GW of renewable energy capacity was added worldwide, of which solar was about 510 GW. Renewable energy can help meet growing demand for electricity for the digital economy in India. The demands of the digital economy show the limits of renewable energy. Solar energy is variable and depends on several factors, while the demand for electricity by data centers is consistent and continuous. Ratul Puri’s perspective on India’s power sector highlights the importance of addressing this difference through storage and transmission. Storage can shift the time of use of energy, and transmission can shift the place of use.

Transmission will become even more critical as data centers grow. Renewable energy projects have no location constraints, while data centers will be located in commercial and digital hubs. As a result, we will need a modern and reliable power transmission network to connect high-demand centers with high-generation centers. It is equally critical for other big consumers. While adding renewable capacity is essential, ensuring that big consumers can be reliably supplied with electricity from renewable sources is just as important.

As India’s digital economy expands alongside renewable capacity, Ratul Puri highlights the need for greater integration between the two sectors. He sees parallels between both sectors, as he believes that both will require the integration of several different components in order to fulfill the targets set by each.

Transmission moves electricity from generation to consumption centers. Storage determines when electricity can be made available. Understanding these differences will be important as renewable energy becomes dominant in the energy mix. From a transmission and storage perspective, both can give the power system the flexibility to meet the varying requirements of the electricity system. From a conventional source of power, there is always a base load, but with renewable energy sources, there isn’t. Given this, the system must be flexible enough to meet various demand requirements.

India is undergoing digital and energy transitions simultaneously. The integration of AI with electronic devices and increasing demand for data center facilities will put more pressure on the power system to meet the peak demand. In the process of integrating more renewables, the electricity system will be more challenging to balance. The focus, therefore, should not be only on expanding the system’s capacity. It should also be on building the needed modern infrastructure to deliver electricity to those who need it, when they need it. Beyond capacity addition, there is a greater need to build other energy infrastructure to support the economy as stated by Ratul Puri. For India’s digital economy, there is a greater need to build integrated and flexible infrastructure to efficiently and effectively integrate and balance renewables, electricity transmission, and storage.