Archive · 9 Oct 2026
Telangana Data-Centre Push Faces Power and Water Challenges
Telangana wants to bring many large data centres to the state.
These centres need a lot of electricity to run computers and keep them cool.
Telangana’s electricity use is already rising, and Hyderabad may need more power next summer.
The city is also expected to face a shortage of water by 2027–28.
Data centres need water for some cooling systems, so this could make their growth harder.
The state’s policy offers support such as power connections and renewable energy.
Experts say incentives alone are not enough.
They suggest improving the power grid and using recycled water and more efficient cooling.
Telangana aims to attract 8–10 GW of data-centre investment and ranks among India’s most attractive locations, according to S&P Global.
The state recorded peak electricity demand of 19,543 MW last month, 23% above the corresponding day a year earlier.
Hyderabad’s peak demand reached 4,782 MW last summer and is projected to exceed 5,000 MW next summer.
A projected 240 MGD water shortfall by 2027–28 raises concerns about supplying data-centre cooling systems.
Experts say expansion will require grid upgrades, reliable renewable power, efficient cooling, and measures such as recycled water and water audits.
- Who
- Telangana, data-centre investors, and experts including Dr P. Sridhar and T. Kiran Reddy.
- What
- The state’s plan to attract 8–10 GW of data-centre investment faces concerns over electricity and water availability.
- When
- The reported power-demand peak occurred last month; Hyderabad’s water shortfall is projected by 2027–28, and national AI data-centre demand is expected to increase by 2031–32.
- Where
- Telangana, particularly Hyderabad and the Greater Hyderabad Municipal Corporation area.
- Why
- Data centres require substantial electricity and cooling, while demand is rising and a significant water shortfall is projected.
Policy and investment strengths
Infrastructure and resource concerns
Attracting data-centre investment
Policy and investment strengths
Telangana’s policy, incentives, land and capital support, fibre connectivity, and technology ecosystem help make it an attractive destination.
Infrastructure and resource concerns
Experts caution that incentives are insufficient without adequate grid infrastructure, reliable power contracts, transparent water rules, and predictable approvals.
Water for cooling
Policy and investment strengths
The state policy promises continuous water supply for heavy-duty cooling systems.
Infrastructure and resource concerns
Hyderabad is projected to face a 240 MGD domestic and industrial water shortfall by 2027–28; experts recommend recycled water, dry or closed-loop cooling, and water audits.
- Investment ambition
- Telangana plans to attract 8–10 GW of data-centre investment.
- State peak power demand
- 19,543 MW last month, 23% higher than on the corresponding day the previous year.
- GHMC peak demand
- 4,782 MW last summer; projected to exceed 5,000 MW next summer.
- Projected Hyderabad water shortfall
- 240 million gallons per day (MGD), or 909 million litres per day, by 2027–28.
- Cooling electricity use
- Cooling systems account for an estimated 40% of a data centre’s electricity consumption.
- Projected AI data-centre demand
- The Union power ministry said AI data centres were expected to add 26.3 GW of electricity demand by 2031–32.
- Policy measures
- Telangana’s policy promises dual-grid power, renewable-energy access, fibre infrastructure, continuous water supply for cooling, and fiscal incentives.