In a significant policy shift for India’s digital infrastructure sector, Andhra Pradesh has approved a power distribution licence for Google’s upcoming data centre project in Visakhapatnam. The move is being seen as a first-of-its-kind decision in India, allowing a major data centre operator to distribute electricity for its own operations under a dedicated regulatory framework.
The approval has been granted under Andhra Pradesh’s newly introduced policy for strategic data centre projects. While neither the state government nor Google has formally announced the development yet, sources familiar with the matter confirmed that the clearance has already been approved.
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Andhra Pradesh Introduces Dedicated Power Policy for Data Centres
Under a recent order issued by the state’s Energy Department, Andhra Pradesh has created a framework for granting Deemed Distribution Licences (DDL) to large-scale data centres. The policy recognises the unique energy demands of hyperscale digital infrastructure projects, which require an uninterrupted, high-capacity power supply.
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The government order states that it has become necessary to allow data centres with the required technical expertise to obtain distribution licences for projects already under development or planned within the state. With this decision, Andhra Pradesh becomes the first Indian state to permit private companies outside the traditional power sector to secure distribution licences specifically for dedicated infrastructure operations.
Eligibility Linked to Large-Scale Power Consumption
As per the policy, a single investor developing a data centre project with a minimum connected load of 300 MW or more in Andhra Pradesh will qualify for a DDL. The framework also allows developers to combine the connected load of multiple facilities across the state to meet the threshold requirement.
The licence comes with operational restrictions as well. Electricity supplied under the DDL may be used only for approved data centre operations within the licensed area. Operators will not be allowed to distribute power to third-party consumers outside the designated zone without approval from the Andhra Pradesh Electricity Regulatory Commission.
Flexible Power Procurement for Hyperscale Projects
The new framework gives data centre operators greater flexibility in sourcing electricity. Licensed operators can procure power through multiple legal channels, including renewable energy producers, bilateral power purchase agreements, open access mechanisms, captive power generation, and power exchanges.
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Officials cited in the report noted that modern data centres are highly power-intensive facilities requiring scalable and uninterrupted electricity supply, often consuming several hundred megawatts within tightly controlled operational zones. The policy has been designed to address these specialised infrastructure requirements while strengthening Andhra Pradesh’s position as a digital infrastructure destination.
Google Cloud AI Hub and Rising Investments in Vizag
The policy push comes shortly after the foundation stone was laid for Google Cloud’s India AI Hub in Anakapalli. The project is estimated to involve an investment of around USD 15 billion and is expected to play a major role in India’s growing AI and cloud ecosystem.
At the same time, Visakhapatnam is rapidly emerging as a major data centre hub. Earlier reports stated that Reliance Industries is planning an investment of nearly Rs 1.6 lakh crore in Vizag, including a proposed 1.5-gigawatt data centre cluster supported by captive solar power and battery storage systems.
Industry observers believe Andhra Pradesh’s latest policy move could set a precedent for other states looking to attract hyperscale data centre investments, particularly as India’s demand for AI, cloud computing, and digital infrastructure continues to rise.
