Syllabus: GS3/Infrastructure; Science & Technology
Context
- Data centres are increasingly being viewed as the refineries of the digital era, transforming raw data into actionable insights and services. It brings into focus the environmental and geopolitical implications of data infrastructure.
What Are Data Centres?
- A data centre is a specialised facility designed to house computer systems and related components, primarily servers, storage devices, and networking equipment that store, process, and distribute large amounts of digital data.
- They form the backbone of the digital economy, supporting everything from cloud computing and social media to banking systems, streaming platforms, e-commerce, and AI operations.
| Why Is Data Considered As New Oil? – The Phrase ‘data is the new oil’ was coined by British mathematician Clive Humby in 2006. – It captures how data, much like crude oil, is a raw resource that, when refined and processed, can generate immense economic value. – Both are foundational resources that reshape economies and societies when harnessed effectively. |
Rise of Data Centres: Powering the Digital Economy
- Backbone of Digital Transformation: Data centres are the engines behind every online interaction from streaming videos and banking transactions to AI-driven healthcare diagnostics.
- Economic Growth and Employment: For developing countries like India, data centres offer:
- High capital investment in infrastructure and technology.
- Employment opportunities in construction, operations, and IT maintenance.
- Boost to allied sectors like renewable energy, telecom, and logistics.
- India’s data centre capacity is projected to grow by over 70% by 2028, signaling strong investor confidence.
- Enabler of Innovation: Data centres are the foundation of AI 5G and upcoming 6G ecosystems. They enable AI model training and deployment; Internet of Things (IoT) operations; Big Data analytics; and Real-time digital services.
- It underpins national ambitions in digital sovereignty, cybersecurity, and AI-led economic competitiveness.
Concerns & Issues Surrounding Data Centres
- Energy Consumption: Data centres are energy-intensive, accounting for around 2–3% of global electricity demand, and could double by 2030 due to AI and cloud growth.
- In India, it could stress infrastructure unless renewable sources are integrated where the power grid already faces reliability issues.
- Water Usage and Ecological Stress: Cooling servers requires massive amounts of water. Locating data centres in water-stressed regions can worsen scarcity and local conflicts.
- For instance, Chile’s Cerrillos data centre by Google faced legal action for potentially affecting aquifers (poor site selection can have real ecological costs).
- Hidden Carbon Footprint: Even when powered by ‘green energy’ the construction and maintenance of large data centres have embedded emissions, from steel, concrete, and cooling chemicals that contribute significantly to carbon footprints.
- Governance Deficits & Data Dumping: In many developing economies, weak zoning laws, opaque approvals, and poor environmental oversight allow developers to sidestep regulations.
- Governments, eager for foreign investment, often cut corners, offering land and power subsidies without adequate environmental due diligence.
- It can lead to ‘data dumping’ when global companies offload inefficient, resource-hungry facilities onto countries with lax enforcement and lower public resistance.
Issues Related To Privacy, Monopoly, and Inequality
- Privacy Erosion: Personal data, from browsing habits to biometric information — is constantly harvested.
- It can be misused for surveillance, manipulation, or discrimination without safeguards.
- Digital Monopolies: Data has created Big Tech monopolies just as oil created monopolies like Standard Oil.
- A handful of corporations control vast troves of user information, stifling competition and innovation.
- Unequal Access: Data-rich nations and corporations widen the global digital divide. Developing countries risk becoming ‘data colonies’, providing raw data without benefiting from its processing and monetisation.
India’s Position
- India is rapidly positioning itself as a global data-centre hub, supported by government incentives, stable geopolitics, and a growing digital market.
- It is projected a 77% capacity increase, reaching 1.8 GW by 2028, and forecasts 4.5 GW capacity by 2030.
- CRISIL estimates growth to 2.3 – 2.5 GW by FY2028.
- However, India’s weak zoning laws, inconsistent environmental enforcement, and water stress in key regions heighten the risk of becoming a dumping ground for inefficient projects.
Why is the Risk Real For India?
- Water Stress: Many Indian basins are already overdrawn; adding water-guzzling data centres could worsen scarcity.
- Power Grid Pressure: Large data loads require costly grid upgrades; without clear cost-sharing rules, households may end up subsidising industrial users.
- Regulatory Weakness: Reports by the Comptroller and Auditor General (CAG) and the National Green Tribunal (NGT) highlight gaps in post-clearance monitoring and environmental compliance.
- Incentive Race: State-level competition may lead to ‘race-to-the-bottom’ incentives like cheap land, expedited clearances, and lax sustainability norms.
Way Ahead: Strengthening Governance
- Incentives & Zoning: Excessive concessions on land, power subsidies, fast-tracked permits often hide environmental shortcuts.
- Zoning needs to classify data centres as heavy infrastructure with noise and buffer controls.
- Focus on Hidden Costs: Opaque grid arrangements can shift upgrade costs to consumers.
- Developers should disclose power use, water sources, cooling methods, and generator timings.
- Local Water Realities: Facilities in arid regions should face binding water budgets and public contingency plans. Water ceilings need to reflect local basin conditions.
- Secrecy and Non-Disclosure Agreements (NDAs): Public utilities should not operate under NDAs for such projects.
- Environmental filings, audits, and incidents need to be accessible through a public registry.
- Cautious Optimism: Hyperscale data centres require robust grids and connectivity, enforcing natural limits on unsustainable expansion.
- India’s courts and tribunals can impose accountability and deterrence.
- Strong activist and journalistic communities can expose opaque deals and demand public disclosure.
- Data Ethics and Sustainability: The next phase of the data revolution must balance innovation with ethics. This includes:
- Strong data protection laws (like India’s Digital Personal Data Protection Act, 2023);
- Transparency in AI algorithms;
- Sustainable data infrastructure powered by renewables;
- Equitable access to digital technologies;
- The goal is to ensure that data enriches humanity collectively, rather than empowering only a few global giants.
| Daily Mains Practice Question [Q] In what ways can the analogy of data as the new oil help us understand the strategic, environmental, and ethical implications of data centres in the digital economy? |
