Sify to invest ₹1250 crore to generate green power for data centers

Digital solutions provider Sify Technologies has announced that its data center wing will invest in over 231 MW of green power at one of its three data center facilities in Mumbai. The project, estimated to cost Rs.1,250 crore, will be undertaken in a 2:1 debt and equity partnership with Vibrant Energy Holdings, the Indian subsidiary of Singapore-based green energy provider Blue Leaf Energy Asia. Sify will hold a 26% stake in the equity portion of the partnership.

The first phase of the project, which includes reaching 67MW peak power generated through solar energy, was announced last year and has been commissioned now. The companies seek to achieve this goal by the first quarter of 2022, while the remaining 164MW are to be built in by 2023-24. Sify said that 111MW of this 164MW will come from solar energy, while the rest will be generated from wind.

The energy capacity will be used to power Sify’s hyperscale data centers in Mumbai, which are meant to handle large business critical operations for enterprises. The company currently has 10 operational data centres in India. These are spread across Mumbai, Noida, Hyderabad, Bangalore, Chennai and Kolkata.

“The way data center capacity is expanding today, there is no way that India can produce as much energy through traditional means. The carbon footprint is also going to be immense. Many companies who are data center customers want to know what percentage of their energy consumption is from green energies,” said Sanchit Vir Gogia, founder and chief analyst at Greyhound research.

According to a January 2022 report by market research firm Gartner, carbon emissions will be one of the top three criteria for companies to choose their data centre providers going forward.

The data center industry was granted infrastructure status at the Union Budget earlier this month. This is expected to facilitate better credit availability for digital infrastructure and clean energy storage. 

The government also announced investments to the tune of Rs. 19,500 crore for a production linked incentive scheme for solar energy, and the introduction of Sovereign Green Bonds in public sector projects, which are expected to be used in environmentally sustainable projects.

“This shift to renewables will deliver clear economic advantages, but it is also about proving the viability of adopting green energy solutions at an industrial scale.” said M.P. Vijay Kumar, chief financial officer, Sify.

Sify isn’t the only data center provider who has committed to using green energy either. Last month, Bharti Aritel commissioned a 21MW solar power plant in Bhuldana, Maharashtra to supply clean energy for large and edge data centers, and switching centers owned by Airtel subsidiary Nxtra in the state. According to Gogia, over 50% of power used by big data center players in India will come from green power, but at the moment, no more than 20-30% will come from green sources.