Solar-powered data centers soon; this crucial change to data center policy may attract realty players

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Updated: Aug 04, 2020 10:22 AM

The government is working on a policy for establishing data centers across the country under which, a major push is likely to be given to renewable energy sources such as solar power, since data centers consume a lot of power.

Other than the data consumed by data trays or data racks, the government wants to push for renewable energy consumption for other needs of the building in which the data centre is housed.

The government is working on a policy for establishing data centers across the country under which, a major push is likely to be given to renewable energy sources such as solar power, since data centers consume a lot of power. Data centers do not have a cross-subsidy to help them tide over high electricity costs and they consume a lot of power. Other than the data consumed by data trays or data racks, the government wants to push for renewable energy consumption for other needs of the building in which the data centre is housed, The Indian Express reported quoting an unidentified official. Under the new nationwide policy, the Ministry of Electronics and Information Technology (MeitY) is also likely to allow states to either follow the policy in total or mould it slightly according to their needs.

Moreover, it is likely that the ministry will urge state governments to give cross-subsidy to data centres. Currently, data centres get electricity at either very high rates or get lower electricity from other states but have to pay a cross-subsidy surcharge. “Once the power cost is managed, more players can be attracted into the system and the overall cost of running or managing a data centre comes down dramatically,” the official said. Apart from these changes, the MeitY may also suggest that data centres be considered a part of urban or semi-urban infrastructure in order to attract players from real estate to make investments in the sector, another official said. “So currently there are about 40 clearances needed to establish a data centre, which is extremely time consuming. We are talking to all stakeholders and discussing if there could be a single-window clearance for applicants,” the official said.

Since the cost of running data centers remains high, the government is also considering giving some relief in the form of lower levies to electronic components and keep guidelines which favour domestic ancillary industries.

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