NITI Aayog has asked the Ministry of Power (MoP) and the Central Electricity Regulatory Commission (CERC) to develop and publish model green-tariff, banking and open-access principles for round-the-clock (RTC) renewable and storage-backed electricity supply to data centres. The recommendation forms part of the “Data Centre Evaluation Framework to Help States Plan for Sustainable Growth”, released by NITI Aayog’s Frontier Tech Hub in New Delhi on 14 October 2026. The model principles are intended for adoption by State Electricity Regulatory Commissions (SERCs), giving developers longer-term visibility on green-energy procurement mechanisms.
The framework was released in the presence of NITI Aayog Member Prof. Abhay Karandikar and CEO Shri Anurag Jain. It was prepared with inputs from the Ministry of Power, the Ministry of Electronics and Information Technology (MeitY), DPIIT and industry, with Deloitte India among the contributors.
Why the Framework Matters Now
According to the official release, India’s data-centre capacity has grown from about 375 MW in 2020 to approximately 1.5 GW, driven by demand for artificial intelligence, cloud computing, high-performance computing and data-intensive applications. The Government has already introduced a tax holiday until 2047 for eligible foreign cloud service providers using India-based data-centre infrastructure. As States compete for these investments, NITI Aayog notes that facilities at this scale place substantial demands on electricity, water, land and connectivity.
The framework therefore aims to shift competition among States from investment announcements to investment readiness, infrastructure quality and sustainable economic value. It is positioned as a decision-support tool that States can adapt to their priorities, not as an additional layer of regulation. Projects are assessed across five pillars: Power and Energy; Water and Cooling; Siting and Environmental Sustainability; Economic and Strategic Value; and Policy, Governance and Implementation.
Role of the Centre in Green Power Procurement
Beyond the MoP–CERC model principles, the Power and Energy pillar asks the Centre to issue common load-flow and grid-augmentation templates. It recommends that the Bureau of Energy Efficiency (BEE), the Bureau of Indian Standards (BIS) and MeitY standardise measurement boundaries, reporting and verification for Power Usage Effectiveness (PUE), Water Usage Effectiveness (WUE) and Carbon Usage Effectiveness (CUE), in line with applicable Indian Standards. BEE has also been asked to assess a Designated Consumer pathway for eligible data centres, the category used for large energy users under the Energy Conservation Act, 2001.
Reducing Dependence on DISCOMs
At the State level, the framework encourages firm captive or open-access renewable-plus-storage supply to reduce data centres’ draw from distribution companies (DISCOMs). Where applicable, States may prescribe a minimum renewable-energy share and encourage hybrid models combining solar and grid power. State and Central resource-adequacy assessments are to include approved and committed data-centre loads, counting captive, open-access and backup arrangements only to the extent that capacity is available to the system.
The framework also sets clear conditions for crediting green power. Reductions in grid draw from renewable and storage arrangements should be recognised only when hourly or applicable time-block matching, approvals, contracted quantum, commissioning, connectivity, metering and usable discharge capacity are confirmed. Storage-backed reductions are to be counted only for usable capacity over the discharge period, with approved net grid draw recorded at each capacity milestone.
Grid Readiness and Demand Response
At site selection, the developer, DISCOM and State Transmission Utility (STU) are to jointly validate a Power Readiness and Ramp-up Plan covering total campus demand, sanctioned MW, year-wise energisation, and substation and transmission augmentation. Load-flow studies should examine feeder limits, N-1/N-2 contingency conditions and transformer loading at 132 kV, 220 kV and 400 kV substations. Each facility is to be classified as conventional colocation, AI/HPC/GPU compute or hybrid.
For facilities above 20 MW, the framework recommends automated demand-response readiness and telemetry and control integration with the State Load Dispatch Centre (SLDC), subject to grid-code requirements. Shared upstream network costs should be allocated by beneficiary, contracted load and utilisation, while project-exclusive assets may be funded by the applicant. Load enhancement should be approved only after the required assets are commissioned and agreed milestones are met.
Developers would also need to submit design and guaranteed operating PUE, and report operating PUE, CUE and site-level greenhouse gas emissions. The framework recommends a phased roadmap to reduce diesel reliance through battery energy storage systems (BESS), green hydrogen or sustainable biofuels where technically feasible, along with waste-heat utilisation assessments for hyperscale facilities.
Siting, Water and Outcome-Linked Incentives
Among otherwise suitable sites, States are advised to prioritise renewable-energy-rich zones with available connectivity to limit long-distance transmission, and to designate data-centre-ready zones with published grid, water, fibre and land readiness, alongside high-risk “red zones” where development should be restricted. Water allocation to data centres should not reduce dependable supply for existing users, supported by a 20–30 year seasonal catchment water balance.
Incentives are to be disbursed against verifiable milestones such as commissioning, renewable supply, PUE or WUE, employment and domestic procurement, each with a defined suspension trigger. The framework further proposes a time-bound digital single-window clearance system, a State-wise Data Centre Approval Matrix and a centralised audit mechanism with MeitY as the nodal ministry.
Outlook
At the launch, Shri Anurag Jain stressed that States must assess infrastructure availability, resource requirements and economic benefits before committing support to data-centre projects, while Prof. Karandikar highlighted opportunities for domestic R&D in advanced cooling, energy efficiency and resource-efficient computing. NITI Aayog Distinguished Fellow Ms Debjani Ghosh said the framework will help States identify the right locations, plan infrastructure ahead of demand and ensure that every investment creates measurable public value.
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