India’s data centre sector is poised for a massive expansion, driven by the country’s growing digital needs. However, as data centres consume vast amounts of energy—nearly half of which goes into cooling the servers—sustainability must be at the forefront of this growth. One promising solution is repurposing the waste heat generated by these facilities. By capturing, redirecting, and monetizing this heat, India can blend growth with sustainability.
The Data Centre Landscape in India
Data centres are large facilities that house servers and other computing equipment. These buildings contain racks of CPUs (Central Processing Units) and GPUs (Graphics Processing Units), the latter of which excel at the parallel processing needed for AI and scientific workloads. With India’s data traffic surging, the country now hosts roughly 276 operational data centres (private) and 41 government (4-Large and 37 small) data centres nationwide. Along with hardware, this expansion will require robust networking infrastructure and renewable energy sources to meet the growing demand, which is projected to rise by 40-45 TWh.
India’s data centre hubs—Mumbai, Hyderabad, Chennai, Delhi-NCR, and Pune—have high energy demands. But India’s relatively low build cost ($7 per watt compared to $10 in the U.S.) makes it a hotspot for global data centre investment. The challenge, however, is ensuring that this expansion is sustainable by reducing emissions, using renewables, and utilizing waste heat.
Leveraging Waste Heat for Industrial Use
Data centres can become multi-purpose assets, not only powering digital operations but also providing heat for industrial purposes. By embedding waste heat recovery systems, companies can repurpose the heat for uses like textile dyeing, cement drying, food processing, and greenhouse farming. This dual-use approach reduces energy costs and emissions while benefiting adjacent industries.
Industrial clusters and data centres can form a symbiotic relationship. By co-locating data centres near manufacturing hubs, companies can create efficient, sustainable, and resource-sharing ecosystems. This partnership can transform data centres from digital-only assets into multi-utility hubs, where waste heat supports both digital and industrial operations.
For example, excess heat from data centres could support logistics and supply chain operations by providing energy to nearby industrial facilities. By embedding waste heat recovery into every stage of data centre operations, India can lead the world in green data centres, turning an environmental challenge into an economic opportunity.
Global Insights: Learning from Europe’s Success
Northern Europe, particularly the Nordic countries, is a global leader in data centre heat reuse. Countries like Sweden, Norway, and Denmark have integrated waste heat from data centres into their industrial and urban infrastructure. In Sweden, for example, a 1 MW data centre supplies heat to a greenhouse, significantly reducing operational costs. Similarly, in Norway, the heat from servers is used to warm water for lobster and trout farms, creating a circular system where excess heat cools the data centre and vice versa.
In the UK, a company uses server waste heat to warm swimming pools, while in Denmark, Copenhagen’s district heating system serves over 600,000 households, with data centres integrated into the grid. These examples show how data centres can be transformed from energy-intensive facilities into sustainable utilities for both industry and communities.
For India, these models offer valuable lessons. The country’s cold winters and industrial needs make it an ideal candidate for leveraging data centre waste heat for applications like textile processing, food production, greenhouse farming, and district heating. Co-location planning is key: a new data centre should ideally be located near industries that can utilize its waste heat, such as in regions with existing manufacturing clusters.
Transforming Waste Heat into Cooling Energy
India’s hot climate makes cooling the primary challenge for industries like cold storage, food supply chains, and pharmaceuticals. Data centres, however, generate large amounts of waste heat that can be transformed into cooling energy. Technologies like absorption chillers, adsorption systems, and trigeneration setups can convert this waste heat into chilled water or refrigeration, enabling data centres to support cold chain logistics, refrigerated warehouses, and other temperature-sensitive industries.
By embedding this waste heat into industrial clusters and smart cities, companies can create circular energy loops where digital intelligence drives both computation and cooling. This would reduce electricity demand for refrigeration, lower carbon footprints, and strengthen resilience in supply chains.
Applications of Waste Heat
Additionally, waste heat from data centres can also be repurposed for: industrial pre-heating for textiles, dairy, and food processing; thermal desalination in coastal cities; greenhouses and polyhouses for year-round farming; aquaculture to maintain warm water for fisheries; seed drying and grain storage to reduce post-harvest losses and absorption chillers for cooling commercial complexes. These applications can turn heat into a valuable resource, improving sustainability and reducing energy waste.
Strategic Planning and Policy Support
For India to tap into the potential of waste heat from data centres, a strategic planning approach is required. The first step is to map out industrial clusters and existing data centres across the country. Platforms like PM GatiShakti, the National Infrastructure Pipeline (NIP), and the National Master Plan (NMP) provide geospatial data and infrastructure insights that can help identify optimal locations for new data centres. By aligning data centres with industrial hubs, renewable energy sources, and urban consumption centres, India can create cost-efficient, sustainable energy loops.
Conclusion
India’s data centre boom need not be solely about expanding digital infrastructure. By capturing and repurposing waste heat, these centres can become dual-purpose assets that power both computation and industrial processes. This integration of waste heat into the industrial and urban landscape will foster efficiency, sustainability, and resilience across the economy. With the right planning and policy foresight, India can lead globally in green data centres, turning an environmental challenge into an economic opportunity.
(Ateesh Kumar Singh, Joint Secretary at Ministry of MSME.)
Views are personal, and do not represent the stance of this publication.
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