Anushka Bandyopadhyay & Raktimava Bose
Everyone is talking about AI taking away jobs, but few are considering its transformative potential for India’s energy sector. While the conversation focuses on disruption, AI could be the key to revolutionizing energy efficiency, renewable integration, and sustainability. Yet, with this power comes the challenge of managing AI’s own growing energy demands.
India is on a mission to achieve net-zero emissions by 2070, with a target of 50% renewable energy capacity by 2030. Artificial Intelligence (AI) is emerging as a game-changer in this transition, optimizing energy grids, predicting power demand, and improving efficiency. It has the potential to cut global emissions by 5-10%, equivalent to the annual output of the EU.
However, AI’s energy-intensive nature poses challenges—data centres alone could consume 3% of global electricity by 2030. Balancing AI’s benefits with sustainability will be key to ensuring that it accelerates, rather than hinders, India’s green transition.
The Bright Side: AI as a Green Champion
AI’s transformative power in India’s renewable energy sector is hard to ignore. Take energy forecasting, for instance. Solar and wind power depend on nature’s whims—cloudy days and still air can disrupt supply. AI steps in with machine learning models that crunch vast amounts of data, from weather forecasts to past energy trends, to predict output with stunning accuracy. Some companies have been major players in India’s renewable scene, they have boosted forecasting precision by nearly 30% using AI, cutting grid disruptions and reducing reliance on coal backups. Dr. Ramesh Kumar from The Energy and Resources Institute (TERI) calls this a “game-changer,”.
Then there’s the smart grid revolution. India’s energy demand is skyrocketing, and AI-powered systems are keeping up by balancing supply and demand in real-time. The government’s Green Energy Corridor project uses AI to integrate renewable sources into the national grid seamlessly, minimizing losses and ensuring power reaches where it’s needed most .
Maintenance is another area where AI can be roped in. In Gujarat’s rugged Kutch region, wind turbines fitted with sensors feed data to AI platforms that spot trouble—say, an odd vibration—before it becomes a costly breakdown. Some companies are saving billions by fixing equipment proactively, extending the life of their assets.
When it comes to storage, AI fine-tunes batteries to store solar energy, as seen in the Delhi Metro’s smart systems. These innovations are pushing India closer to its ambitious carbon reduction goal of 45% by 2030, as pledged under the Paris Agreement.
The Flip Side: AI’s Energy Appetite
Yet, AI’s power comes with a cost. Running those algorithms requires serious computing power, and that means electricity—lots of it. India’s data centre industry, which fuels AI, is expected to consume over 10 GW by 2030—enough to power millions of homes. Dr Anjali Mehta, energy policy expert at NITI Aayog, said that “we need a dual approach: leveraging AI for green energy while ensuring AI itself remains sustainable,”.
This paradox is real. Training a single large AI model can leave as much carbon footprint as five cars over their lifetime. Meanwhile, data centres worldwide are expanding rapidly to support AI, cryptocurrency, and digital services. Without careful planning, this could strain the grid and boost emissions, clashing with the nation’s clean energy mission. The environmental footprint of AI isn’t a distant worry—it’s a challenge India must tackle now.
So, is AI a boon or a burden? It’s both—and that’s where the opportunity lies. India can’t afford to ditch AI; it’s too vital for scaling renewables efficiently.Alongside, the focus also needs to be on making AI itself eco-friendly.
Steps are already underway. The Ministry of Power is nudging data centres to run on solar or wind power, while companies like Infosys and Wipro are pursuing carbon neutrality through AI-driven efficiency.
Beyond renewable-powered data centres, other solutions exist. Innovations in liquid cooling technology, low-power AI chips, and federated learning models can cut AI’s energy appetite. The Production-Linked Incentive (PLI) scheme for battery manufacturing and the Green Hydrogen Mission are also creating an ecosystem where AI’s energy demands can be sustainably.
The European Union’s AI Act, which flags energy-intensive AI as “high risk,” offers a blueprint—India could craft similar regulations to ensure AI serves the planet. The United Nations Development Programme (UNDP) in India suggests regular sustainability audits to keep AI’s footprint in check.
Looking ahead at 2030, AI and renewables could be unstoppable partners—if India plays it smart. The potential is dazzling, but it hinges on investments in clean tech and clear regulations. “AI is not just an enabler but a necessity for India’s clean energy transition,” says Dr. Kumar. “If harnessed responsibly, it will drive us toward a self-reliant and sustainable future”.
AI’s impact on India’s renewable energy sector is a tale of two forces: a brilliant enabler and a quiet consumer. Harnessed with care, it can light up the nation’s green future. Left unchecked, it risks a downfall. India stands at a crossroads, and with the right moves, it can turn this double-edged sword into a shining beacon of progress.
References
The Energy and Resources Institute (TERI). (2023). AI in Renewable Energy. Retrieved from https://www.teriin.org/
ReNew Power. (2023). AI for Energy Forecasting. Retrieved from https://renewpower.in/
Ministry of Power, Government of India. (2023). Green Energy Corridor Project. Retrieved from https://powermin.gov.in/
National Thermal Power Corporation (NTPC). (2023). AI in Predictive Maintenance. Retrieved from https://www.ntpc.co.in/
Ministry of New and Renewable Energy (MNRE). (2023). National Energy Storage Mission. Retrieved from https://mnre.gov.in/
Delhi Metro Rail Corporation (DMRC). (2023). AI-powered Battery Storage Systems. Retrieved from https://www.delhimetrorail.com/
United Nations Development Programme (UNDP) India. (2023). AI and Sustainable Development. Retrieved from https://www.undp.org/india
NITI Aayog. (2024). AI and Renewable Energy Policies. Retrieved from https://www.niti.gov.in/
Ministry of Environment, Forest and Climate Change (MoEFCC). (2023). India’s Updated NDCs. Retrieved from https://moef.gov.in/
World Economic Forum (2024). AI and Energy: Will AI Help Reduce Emissions or Increase Demand? Retrieved from https://www.weforum.org/stories/2024/07/generative-ai-energy-emissions/
Anushka Bandyopadhyay and Raktimava Bose both are associated with National Council of Applied Economic Research (NCAER).
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