Powering growth, risking sustainability: The real cost of India’s power surge

By Shankar Sharma* 

India is approaching a critical juncture in its development, where the pressures of economic growth, rapid digitalisation, and ecological limits are converging in ways that cannot be ignored.

Recent developments across the power sector point to a system under visible strain. The push for large data centre parks in cities such as Bengaluru, Mysuru, and Mangaluru, rising concerns about the water footprint of AI infrastructure, increasing stress on the electricity grid, and price spikes during heatwaves together signal a deeper structural imbalance. At the same time, policy initiatives such as farm solarisation are being advanced as quick solutions to long-standing inefficiencies.

What is emerging is a pattern of reactive decision-making. As electricity demand surges—driven by heat extremes, urbanisation, and energy-intensive technologies—the response has largely been to expand supply as quickly as possible. This approach may offer short-term relief, but it risks locking the country into pathways that are environmentally and economically unsustainable.

The rapid growth of data centres illustrates this dilemma clearly. While they are indispensable to the modern digital economy, they also require enormous quantities of electricity and water. In a country already grappling with water stress and uncertain monsoon patterns, the unplanned expansion of such infrastructure could intensify resource conflicts. The question is not whether India needs data centres, but how many, where, and at what ecological cost.

The intensifying cycle of heatwaves and rising electricity demand further exposes the limits of current policy thinking. Increasing power supply to meet cooling needs without addressing the underlying drivers of heat—such as declining tree cover, unchecked urbanisation, and land degradation—amounts to treating the symptoms rather than the disease. Without a serious commitment to restoring ecological balance through afforestation and better land-use practices, the demand for electricity will continue to escalate in a self-reinforcing loop.

India’s energy transition is often framed as a technological challenge, but it is equally a question of strategic judgment. Options such as small modular nuclear reactors, distributed solar systems, battery storage, pumped storage projects, and expanded transmission networks each have a role to play. However, their deployment must be guided by rigorous, context-specific evaluation. A uniform, one-size-fits-all approach will only lead to inefficiencies and unintended consequences. Every additional megawatt of demand must be met with the most appropriate solution, not merely the most expedient one.

Compounding these challenges are structural distortions within the power sector, particularly the large subsidy burden in agriculture. While farm solarisation offers a promising pathway to reduce fiscal stress and improve sustainability, its implementation must be carefully designed to avoid new inefficiencies or inequities.

At the heart of this issue lies a deeper concern: the absence of sustained and informed public engagement. Decisions of such scale and consequence cannot remain confined to administrative or corporate domains. Civil society must play a far more active role in shaping the discourse, questioning assumptions, and demanding accountability. Without such participation, the risk of short-termism and policy capture increases significantly.

India does not lack technological options or institutional capacity. What it urgently needs is a coherent, long-term framework that integrates energy planning with water management and ecological sustainability. This requires moving beyond fragmented responses and embracing a holistic strategy that prioritises efficiency, decentralisation, and environmental resilience.

The choices being made today will define the country’s energy and ecological future for decades. Continuing along a reactive path may deliver immediate gains, but at the cost of deeper crises ahead. A deliberate, rational, and participatory approach is no longer optional—it is imperative.

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*Power and climate policy analyst based in Sagara, Karnataka. This article is based on an email alert distributed by the author