In a major policy boost for India’s expanding digital infrastructure, the Maharashtra government has approved a plan allowing data centres in Mumbai, Navi Mumbai, Thane, and surrounding regions to generate and distribute their own renewable energy. The state energy department issued an order enabling data centre parks and individual units, recognised by the industries department, to set up captive power generation and distribution facilities. The permission applies exclusively to renewable energy sources such as solar, wind, or hydro power. Industry experts have hailed the decision as transformative for the data centre ecosystem, which relies on uninterrupted 24x7 electricity and consumes massive amounts of energy. Data centres, often described as “power guzzlers”, require constant power to operate and cool thousands of servers supporting cloud computing, digital platforms, and artificial intelligence systems. “It has become necessary to facilitate data centre park developers and their associates to develop and maintain power distribution infrastructure and procure power, which is a specialised activity for the entire data centre park,” the state energy department noted in its order dated 6 October. Although Maharashtra is not a power-surplus state, it hosts nearly 60 per cent of India’s data centres, primarily concentrated in Navi Mumbai. Data centres are already classified as an “essential service” given their need for uninterrupted operations. Earlier, on 13 May, the industries department had notified 25 areas across Kurla, Chandivali, Marol, Thane, Navi Mumbai, and Panvel as designated data centre parks and units. The notification also granted deemed distribution licences for renewable energy within these zones, paving the way for the energy department’s latest clearance. A senior energy department official stated that uninterrupted electricity is critical for data centres, as any outage can cause major financial and operational losses. “With the exponential rise of cloud computing, streaming, fintech, and artificial intelligence, their power demand is increasing rapidly. The government therefore decided to permit captive green energy generation for their operations,” the official explained. The order further allows operators to distribute electricity within the approved zones. “If they generate surplus power, they can sell it to other customers within the same zone but not beyond it,” another official clarified. Data centre operators will be required to seek parallel distribution licences from the Maharashtra Electricity Regulatory Commission (MERC) through standard procedures. However, the use of renewable energy remains mandatory. Under the state’s Information Technology and IT-enabled Services (ITES) Policy, Maharashtra aims to develop Mumbai and Navi Mumbai as leading data centre hubs for the Asia-Pacific region. With a strong power grid, multiple undersea cable landing points, and skilled technical talent, the state plans to cement its position as a regional digital powerhouse. Chief Minister Devendra Fadnavis previously noted that Maharashtra accounts for about 60 per cent of India’s total data centre capacity, most of which is based in Navi Mumbai. Major developers operating in the notified zones include Amazon Data Services India, NTT Global Data Centers, CtrlS, Equinix India, Nxtra Data, Sify Infinit Spaces, and Princeton Digital Group. According to a June report by property consultancy Cushman & Wakefield, Mumbai ranks sixth among 97 global cities for under-construction data centre capacity, surpassing markets such as London and Dublin. Virginia in the United States leads with 1,834 MW of capacity under construction, followed by Atlanta (1,078 MW), Columbus (546 MW), Dallas (500 MW), and Phoenix (478 MW). Mumbai accounts for 42 per cent of India’s total under-construction capacity, further strengthening its role as a key regional hub. The report also places Mumbai as the seventh most established data centre market in the Asia-Pacific region. By the end of 2024, the city had 335 MW of capacity under construction — a 62 per cent rise from its existing operational base.