The report, titled “Data Centre Evaluation Framework to Help States Plan for Sustainable Growth,” called on states to look beyond investment announcements and assess whether they have the electricity, water, land and supporting infrastructure needed to sustain data-centre projects.
The framework is intended to support decision-making, the report said, adding, “States can apply the common assessment principles in line with their priorities, resource availability and development objectives.”
The government’s think tank proposed five pillars for evaluating projects: power and energy, water and cooling, site selection and environmental sustainability, economic and strategic value, and policy and implementation.
The framework is supposed to provide “states with a common set of parameters to evaluate data-centre proposals and make informed decisions that balance investment promotion, infrastructure readiness, economic value and long-term sustainability.”
Verify power and water availability
The report asked states to assess whether their electricity grids can meet the demand from data centres, and asked to account for future expansion and identify the upgrades needed to support new projects.
The report called for states to assess the “total electricity demand” of a proposed data centre and identify the cost and responsibility for upgrading power infrastructure.
The report suggested states to assess long-term availability and the needs of existing users, including households, farmers and industries.
“Prepare a 20-30 year seasonal catchment water balance covering surface water, groundwater, municipal supply, treated wastewater, competing demand, particularly agriculture,” the report stated. It added, “Surface-water, groundwater or municipal-water allocation should not reduce dependable supply for existing users.”
In areas facing water stress, the framework said projects should not be allowed to “further strain existing freshwater resources”. It also calls for states to assess water requirements based on the cooling technology used by a data centre.
The report also asked states to designate and prepare data-centre-ready zones by verifying land title, permitted use, zoning, and expansion headroom.
“Pre-assess grid, water, substation readiness and, among otherwise suitable sites, prioritise renewable-energy-rich zones with available connectivity where this limits long-distance transmission,” the report said.
Weigh economic benefits against public support
The report asked states to assess the “net economic contribution” of data-centre projects and weigh it against the public support offered to developers. This includes incentives and support for land, infrastructure, electricity and other costs, rather than focusing only on the investment a project brings in.
States urged to assess local employment, training, research and development, and procurement from domestic companies. The framework encouraged states to promote the use of Indian technology and infrastructure suppliers.
It recommended linking incentives to measurable outcomes, including project commissioning, renewable energy use, energy and water efficiency, employment and local procurement.
States should define the targets companies must meet to qualify for incentives and specify how progress will be measured. The report also called for clear conditions under which government support could be suspended if companies fail to meet their commitments.
The report also recommended a “time-bound end-to-end digital single-window mechanism” to coordinate approvals for data-centre projects. It said states should publish an approval matrix that lists the clearances required, the authorities responsible, indicative processing times, fees and escalation mechanisms.
