Andhra Pradesh Issues Deemed Distribution Licenses for Data Centres to Boost AI Infrastructure
Andhra Pradesh has introduced deemed distribution licenses (DDL) for data centres, enabling them to self-procure electricity. This policy aims to reduce costs and enhance energy access as the state seeks to expand its data centre capacity significantly.
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The Andhra Pradesh government has granted deemed distribution licenses (DDL) to data centres, allowing them to procure and distribute their own electricity, thus aiming to lower operational costs. This policy is pivotal as the state's data centre capacity is projected to grow from 1.2 GW to 5 GW, driven by increased demand for AI computing power.
The DDL status enables data centres with a minimum load of 300 MW to avoid high tariffs typically imposed on industrial users, as they can source electricity through open-access arrangements without cross-subsidy surcharges. Notably, DDL holders must source at least 51% of their energy from renewable sources and bear the costs for grid connectivity. This initiative may enhance Andhra Pradesh's competitiveness as a data centre hub while balancing the interests of existing power distribution companies by restricting DDL eligibility to new projects only.
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