India’s data centres look to the salty seas

**Akshara** (0:04)
In today's episode, we'll break down two important stories. First, we'll talk about India's data centers looking to the salty seas, and then we'll talk about the 10 rupee battery with a 50 crore rupee problem. Welcome back to The Daily Brief by Zerodha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. If you're listening to this on your commute, on a walk, or at the gym, you can also find The Daily Brief as an audio podcast on Spotify, Apple Podcasts, or wherever you listen to your podcasts. If you prefer reading, check out the newsletter using the link in the description. I'm your host Akshara, and today is Monday, 29th June.
Coming to the first story.
Recently, the Hindu business line ran an interesting story that caught our eye. India's data center operators are looking to find new innovative ways to cool their extremely thirsty buildings. Reliance, in fact, is looking to use seawater to do so for its AI data center in Jamnagar. Now, it's well known that data centers consume a significant amount of water in order to cool servers, and a large hyperscale AI facility can guzzle millions of liters a day. For instance, Google's own reporting says that in 2024, its data centers consumed 31 billion liters of water, which is enough to irrigate 54 golf courses, or even supply to a small town.
India, too, is now in the middle of the most aggressive data center buildout in its history. Installed capacity has tripled from about 05GW in 2020 to roughly 15GW by 2025, and could cross 6GW by 2030 Now, India doesn't necessarily face a permanent freshwater shortage, but this year's monsoon is a reminder of how fragile the supply can be. The IMD has forecast below-normal rainfall under El Nino conditions, and groundwater tables in cities like Mumbai and Chennai have been dropping steadily.
Maintaining the freshwater reserves that farms, cities, and industries depend on is hard enough without adding massive data centers to the queue. The ocean, on the other hand, offers a practically infinite resource, but even without data centers in the picture, turning seawater into something a data center can actually use is harder than it sounds. Few countries have managed to make it an industrial-scale process, and we were curious to know why that is.
So let's start with how data center cooling works. Thousands of servers packed into a single facility generate enormous heat. Left uncooled, chips could fail within hours and even minutes. The most common solution is evaporative cooling. Here, cold water is pumped through pipes near the servers, absorbs the heat, and is pushed through cooling towers where it evaporates. The evaporation carries the heat away, but consumes the water in the process. Now, assume this process uses seawater. As the water evaporates, any dissolved minerals or salts left behind get progressively concentrated in the remaining water. And over time, those minerals form hard, chalky crusts on pipes and heat exchangers, clogging the system. And bacteria and algae thrive in warm, mineral-rich water, forming slimy biofilms that further choke the equipment. In essence, seawater would wreck a conventional cooling system almost immediately, and the salt would corrode metal components, the minerals would scale up the pipes, and marine microorganisms would foul the surfaces. So data centers need water that's clean enough to cycle through the system without leaving destructive residues. And that means fresh water from rivers, reservoirs, municipal supply, or groundwater, which is precisely the resource India can't afford to divert in large quantities during poor monsoons.
So the alternative is to take the infinite supply sitting offshore and strip the salt out of it. Now, there are three main industrial techniques for seawater desalination, each with its own logic. So the oldest approach is multistage flash distillation, or MSF. Think of MSF as a sequence of sealed chambers, each held at a progressively lower pressure. Now, seawater is heated and then fed into the first chamber, and when it enters a low-pressure environment, a fraction of it flashes into steam. That steam condenses on cold pipes and drips down as pure fresh water, which then flows into a separate channel. Now, MSF is reliable and proven, but brutally energy-intensive. It takes close to 120 kWh of heat to produce 1000 litres of fresh water, plus additional electricity for pumping. And it also produces the most expensive water of the three methods. Now, the second method is multi-effect distillation, or MED. And it's a more efficient version of the same principle. So instead of flashing, it uses a staircase of evaporation effects. Steam produced in one stage heats a thin film of seawater in the next, which boils and produces more steam and so on down the chain. Because MED transfers heat more efficiently through these thin films, it uses much less energy than MSF.