Gandhinagar: Seeking to position itself as a hub for the fast-growing data centre industry, Gujarat govt is expected to announce a dedicated data centre policy within two weeks, offering incentives that go beyond those available under the state’s newly announced industrial policy.The proposed policy aims to attract data centres with a combined capacity of 2 gigawatts (GW), as Gujarat joins several states including Andhra Pradesh, Telangana, Karnataka, Maharashtra, Delhi-NCR and Tamil Nadu in aggressively pursuing investments in the sector.The department of science and technology will be the nodal agency for implementing the policy, which is expected to provide additional benefits to investors to address the sector’s significant requirements for capital, power and water.Since data centres consume high amounts of power, the proposed policy is expected to make it mandatory for them to use renewable sources for more than half of their electricity. “Whether they generate power captively or buy it, data centres will be required to commit to sourcing at least 51% of their electricity from renewable energy sources,” said an official involved in drafting the proposed policy.The govt estimates that expansion of the data centre sector could increase Gujarat’s overall power consumption by nearly 10%. According to govt officials, the state consumes around 20,000 crore units of electricity annually.Data centres alone are projected to consume approximately 2,000 crore units of power annually once the targeted capacity is reached. While power rates for data centres have not been finalised yet, sources indicated they could be around 1 rupee per unit or even slightly higher.“Electricity generation is not a concern. The larger challenge is creating the transmission network required to evacuate and supply power to these facilities,” a senior official said, adding that planning has already begun to expand the state’s transmission and distribution capacity.A top official of Gujarat Urja Vikas Nigam Ltd (GUVNL) said the state has planned to expand generation capacity in line with projected demand growth, with a special focus on rising requirements from data centres. Gujarat’s state-owned renewable energy capacity is currently around 20,000MW and is targeted to rise to 60,000MW by 2030, the official said. “Planning is being aligned with future load growth and grid stability needs, as demand from industry and digital infrastructure in the state is expected to climb steadily in coming years.Recognising the substantial water requirements of data centres, the policy is expected to include incentives for setting up captive desalination plants for facilities located along the state’s coastline. “For data centres situated inland, the govt is likely to facilitate water supply through alternative arrangements,” said an official.Officials said special incentives are also being planned for small and medium-sized data centres to encourage wider participation in the sector. Other proposed benefits include exemption from electricity duty and additional support for infrastructure creation.The move comes amid a nationwide race among states to attract data centre investments, driven by growing demand for cloud services, artificial intelligence applications, digital payments and data localisation requirements.
