Andhra Pradesh has introduced a policy requiring all new data centers in the state to source at least 70% of their energy from renewable sources. The policy also includes a sustainable water management framework, addressing cooling water consumption — a major environmental concern for large data facilities. This makes Andhra Pradesh one of the first Indian states to impose binding green energy and water-use standards specifically targeting the fast-growing data center sector.

Data centers are among the most energy-intensive infrastructure assets, consuming massive amounts of electricity for computing and cooling. Globally, they account for roughly 1–2% of total electricity use, and India's rapid digitisation is accelerating domestic demand. Andhra Pradesh's 70% green energy mandate directly intersects with India's broader climate commitments under the Paris Agreement and its Nationally Determined Contributions (NDCs), which target 500 GW of non-fossil fuel electricity capacity by 2030.

The water sustainability framework addresses a less-discussed but critical issue: data centers use millions of litres of water annually for cooling. In water-stressed regions, this creates direct competition with agriculture and drinking water needs — making such regulations ecologically significant.

From a policy architecture perspective, this mandate operates at the intersection of industrial regulation, renewable energy procurement (through mechanisms like Power Purchase Agreements and Renewable Energy Certificates), and environmental impact assessment norms. States can set such conditions as part of investment approval frameworks.

For UPSC aspirants, this connects to concepts of cooperative federalism in environmental governance, India's renewable energy targets, and the role of states in implementing national climate goals. For NABARD aspirants, the water-use dimension links directly to watershed management and water-stressed agricultural regions. For SEBI aspirants, the green finance dimension — green bonds, ESG disclosure norms for data infrastructure companies — is the relevant angle.