Sindhu Sharma, Head – ESG, Nxtra by Airtel

Intelligent power management strategies are essential for data centres, which consume vast amounts of electricity for power servers, cooling systems and networking equipment. In the data centre business, energy cost stability is critical. In India, renewable power is generally cheaper than fossil-based (brown) power. The Government of India’s favourable policies in recent years, such as waived restrictions, supportive banking policies and rates as low as Rs 3 or below, are also a big incentive for the adoption of renewables. In addition, there is increasing investor and client pressure to meet net zero targets and promote environmental sustainability.

Nxtra by Airtel focuses on physically replacing brown power with renewables rather than just buying renewable energy certificates (RECs) from the market. RECs are a quick-fix approach, a simple purchase that can be finalised within a month. Instead, it is better to secure power through long-term contracts and invest in the overall transition.

Feasibility considerations

While many major players have signed renewable energy contracts, they struggle with the actual delivery of power. The key gap lies between contracting and the actual supply of renewable power.

Technological feasibility: It is the time to move beyond vanilla contracts, involving only solar, wind, hydro, or small hydro. Data centres must assess their requirements, ramp up plans and then talk to developers about phased deliveries that align with their projected growth.

Regulatory feasibility: Nxtra has 120-130 edge locations across India. Each state has different regulatory requirements, banking policies and settlement mechanisms.

Financial feasibility: It is not just about favourable commercial terms from developers. The focus must be on getting credible partners who will be around for the next 10-15 years. This requires thorough financial due diligence.

Phased approach

Phase I typically involves using either solar or wind energy. Through this approach, data centres can replace 30-35 per cent of their energy usage. They can go intra-state, interstate, or combine both.

Phase II combines different sources, such as solar and wind power. In states like Karnataka, Tamil Nadu and Maharashtra, which are rich in renewable energy, data centres can use a mix of solar, wind and possibly hydro to achieve 70-75 per cent replacement of conventional energy with renewables. In places where wind is not available, such as Uttar Pradesh, a combination of interstate and intra-state solar can help achieve the same 70-75 per cent. For Delhi, a mix of hydro and wind can help reach about 80 per cent replacement.

Phase III is to explore battery storage for the peak time replacement. In most states, there are restrictions on using banked power during peak or time-of-use hours, which last three to five hours. Data centres can have a dedicated two-hour supply supplemented by solar or wind plus a battery storage solution. It might cost around Rs 4-4.50, but data centres can still achieve 10-15 per cent more renewable energy coverage for those peak hours.

Nxtra by Airtel is between Phases II and III. It is essential to identify solutions suitable for each location, and adopt tailored strategies based on hyperscalers’ ramp-ups or client needs.

Open access contracting models

There are three major models for renewable energy procurement. The first is the captive model, under which companies like Nxtra bear the capital expenditure (capex). The renewable energy developer is responsible for operating and maintaining the facility remotely or on site.

Under the bilateral or third-party model, an independent power producer (IPP) or third-party developer initiates the process by deploying their own capex to develop, operate and maintain a renewable energy plant at a remote location or on site. The electricity generated from the renewable energy plant is then transmitted to the buyer through the transmission and distribution network. A power purchase agreement is established between the IPP/third party and the buyer. However, this may not be feasible in states like Maharashtra, but it works in Karnataka, Tamil Nadu, etc.

The third option is the group captive model, involving 26 per cent equity, 7-8 per cent capital and 51 per cent power offtake.

Sourcing renewable energy

Nxtra by Airtel’s target is to reach 70 per cent renewable energy consumption for its core data centres, including hyperscalers, by 2027. The company has a clear road map to reach net zero emissions by 2031, beyond carbon neutral or partial offsets. It is also on track to become water neutral at its hyperscale campuses, and is planning to onboard a circularity platform to track waste disposal. It has already deployed hydrogen-ready fuel cells at one of its data centres in Bengaluru.

Future innovations will focus on developing advanced energy storage solutions, such as solid-state batteries, to enhance reliability and efficiency. Further, the adoption of smart grid technologies will enable real-time energy management, allowing data centres to optimise energy consumption based on availability and pricing, thereby enhancing operational efficiency. s

Based on a presentation by Sindhu Sharma, Head – ESG, Nxtra by Airtel