Voltas, Blue Star prepare to capture cooling demand from data centres

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• Voltas, Blue Star eye India's growing data centre cooling market.
• Blue Star developing chillers and cooling units for data centres.
• India's data centre capacity set to exceed 2GW by 2026.

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Leading HVAC  (Heating, Ventilation and Air Conditioning) players, Voltas and Blue Star are warming up to meet the surging demand from data centres, as India prepares to have over 2 GW capacity by 2026. Top executives of both companies are charting out plans to grow more market share in the lucrative segment which can potentially boost margins, according to comments made during the post-earnings call earlier this month.

Data centres or DCs are typically made up of servers, databases, and networking and telecommunication technology, working non-stop to manage digital information and, in the process, servers and other hardware tend to emit high quantities of heat, and which air-conditioning systems are vital to avoid any fire hazard.

Blue Star, which is the second-largest homegrown player in the Indian room air conditioning space, said it is developing a chiller and liquid cooling or CDU (Cooling Distribution Unit) for serving the DC market.

"We are a very large player in chillers. I don’t think we need an external collaboration for developing a chiller for the data centre market," said managing director B. Thiagarajan.

Blue Star said several of its data centre–focused models are in advanced stages of development, with timelines of around 12 months. In the mechanical, electrical and plumbing (MEP) and Engineering, Procurement, and Construction (EPC) segments of data centres, the company believes it already holds a leadership position and expects to strengthen market share and emerge as a preferred partner for customers. However, it added that the products are currently undergoing rigorous testing before commercial rollout.

Meanwhile, market leader and Tata-backed Voltas is also focussing on the segment, which, it views as low risk.

"Currently we want to have a larger pie of the manufacturing and the data centre market. We are also looking at the steady flow and these are generally fast-track projects which will have a quick turnaround, within less than 9-12 months," managing director Mukundan Menon told analysts.

"The focus is to win data centre projects, using a combination of 2-3 levers. A data centre needs the cooling equipment, which is chillers or centrifugal chillers, where we have made significant progress with a new technology partner alliance," Mukundan added.

He further flagged that the company makes both variants of centrifugal chillers- conventional and oil free chillers- and that across its offerings, the company believes it has some of the most energy-efficient products in the market. Since energy costs form a significant part of a data centre’s operating expenses, the company is confident of securing chiller orders in this segment.

Mukundan added that bids are being submitted in collaboration with its MEP (mechanical, electrical and plumbing) contracting division, enabling Voltas to position itself as a single-source vendor for data centre clients through a cross-divisional approach.

The comments come as India is seeing a massive demand for data centres, driven by non-negotiable government policy directive for data sovereignty.

Projections of industry analysts forecast that the total installed power of India’s data centres will reach over 2GW by 2026 from the current level of over 1GW. This is a very significant build-out, and industry analysts believe that India’s data centre capacity will grow five-fold by 2030 to over 8GW. This growth is expected to generate over $30 billion in capital expenditure, consulting firm KPMG said in December.

Recently, the Adani group announced direct investment of $100 billion to develop renewable-energy-powered, hyperscale AI-ready data centres by 2035. Other global players ramping up invsestments include Amazon, Google and Meta Platforms.