Powering Data, Straining the South
Explore how data centres fuel digital growth yet strain energy, emissions, and equity, deepening divides between the Global North and South.
Introduction
The modern world is driven by data. Every time a person sends a message, streams a video, or searches for information online, data is created and processed. This invisible activity is supported by vast buildings known as data centres. These centres are filled with servers, cooling systems, and storage devices that keep the digital world functioning. However, behind the convenience of instant information lies a major challenge: data centres consume huge amounts of electricity and add to greenhouse gas emissions. As Lydia Powell and Akhilesh Sati argue in The Consumption of Energy by Data Centres: Implications for the Global South (ORF Monograph, 27 August 2025), the unequal spread of these centres deepens the divide between the rich nations of the Global North and the poorer nations of the Global South. This essay shows that while data centres bring technological growth, their uneven geography and high energy footprint risk harming the Global South unless fairer policies are developed. The thesis is clear: data centres are powerful tools of progress, but they must be managed carefully to avoid creating new forms of inequality.
Shifting Electricity Trends
For decades, electricity use in rich countries such as the United States, Japan, and parts of Europe hardly grew. This was partly because these countries had already industrialised, meaning most homes and factories already had steady supplies of electricity. Imagine filling a glass of water to the brim; once full, there is little more that can be added. Similarly, electricity growth had slowed.
But today, that glass is being filled again. New demands have arrived, and they are extremely thirsty. Electric cars, for example, need constant charging. Cryptocurrency mining, which involves computers solving complex puzzles to produce digital coins, requires vast power. Above all, data centres now represent the fastest-growing source of electricity demand. Unlike switching on a light bulb, the tasks of artificial intelligence grow more complex with each request, consuming far more energy. A single advanced query can use more electricity than keeping a household lamp lit for several minutes. As artificial intelligence spreads, this demand could reach unprecedented levels, straining national electricity supplies.
Unequal Geography
Although the internet is global, data centres are not. By 2024, more than 11,000 data centres existed worldwide, yet their distribution was far from equal. Over half were located in the United States, while Asia had around 30 percent. Europe, the Middle East, and Africa together accounted for just 20 percent. The Global South, excluding China, had less than 10 percent of the world’s data centre capacity despite housing most of the world’s people.
To understand this imbalance, picture a library. If only a few cities owned most of the world’s libraries, then readers everywhere else would need to send their books across borders to be stored, read, or copied. That is exactly how data flows today: raw information often leaves the Global South and travels to centres in the Global North, where it is processed into valuable knowledge. The result is that the South pays more and benefits less.
Data centres are also highly concentrated in certain regions. Unlike steel factories, which may spread across a country, data centres cluster in specific spots to share cooling systems and fibre-optic cables. In large economies such as the United States, China, and Europe, data centres already use between 2 to 4 percent of national electricity, and in some regions the percentage is even higher.
Virginia and Dublin
Two striking examples of data centre clusters are found in Virginia in the United States and Dublin in Ireland.
Virginia became the world’s leading hub for data centres due to a mix of history and favourable conditions. In the 1960s, the US defence department launched ARPANET, the ancestor of the internet, in Virginia. Later, companies like America Online set up strong internet networks there. Its flat land, low electricity prices, and closeness to Washington, D.C., made it a natural choice. To sweeten the deal, state authorities offered tax breaks, encouraging companies to build hundreds of centres. Today, the electricity consumed by data centres in Virginia equals that used by hundreds of thousands of homes, leading some residents to fear rising bills.
Dublin, on the other hand, rose as Europe’s data capital mainly through policy choices. Ireland offered one of the lowest corporate tax rates in Europe, making it attractive to technology giants. The country also invested in transatlantic internet cables, linking it with the United States and the wider European Union. Dublin’s cool, damp climate reduces the cost of cooling servers, an enormous expense in warmer countries. As a result, by the 2010s, global companies established their European headquarters in Dublin, creating a powerful cluster effect. However, by 2026, data centres were expected to consume nearly one-third of Ireland’s electricity, a level that risks overwhelming the national grid.
The South’s Disadvantage
While the Global North reaps the rewards, the Global South struggles. Excluding China, the South accounts for half the world’s internet users but less than 10 percent of its data centre capacity. This creates a situation much like colonial trade in earlier centuries. Back then, colonies exported raw materials such as cotton and tea, only to import finished goods at higher prices. Today, the Global South exports raw data, while the Global North processes it into valuable services such as artificial intelligence and sells it back.
The main obstacle is electricity. Data centres need constant power. Yet in many poorer nations, frequent blackouts make reliable supply impossible. Imagine trying to run a refrigerator that turns off every few hours; food would spoil. Similarly, servers cannot afford interruptions. Backup systems are expensive, so many businesses in the South prefer to rely on overseas data centres. This dependence keeps the South in a weaker economic position.
Data Sovereignty
Data sovereignty refers to a country’s right to control the data generated within its borders. By 2025, 144 countries had passed laws to protect personal data. These laws cover over 80 percent of the world’s population.
The European Union’s GDPR is the strongest example, preventing data from leaving the EU unless the destination ensures equal protection. The United States, lacking one single law, instead uses multiple rules across sectors, but its CLOUD Act allows US authorities access to overseas data stored by American companies. China has some of the strictest rules, requiring companies to keep sensitive data within the country. India’s 2023 Digital Personal Data Protection Act also seeks to regulate how personal information is stored and transferred.
For the Global South, these laws present mixed consequences. On one hand, stricter rules could force companies to build local data centres. On the other hand, this may lead to centres being built in unsuitable places where energy is scarce or expensive. It is like planting crops in poor soil; the result is wasteful and costly. Thus, while data sovereignty gives countries control, it may also increase burdens.
Energy and Operations
Running a data centre is like keeping a giant oven permanently switched on. The servers inside produce constant heat, and this must be removed or the system will collapse. Cooling alone can use up to 40 percent of total electricity.
Globally, data centres consumed about 1.5 percent of electricity in 2023. By 2030, this could double or triple. Although efficiency has improved—for example, more powerful chips now do the work of many older ones—the overall demand continues to rise. A simple query to an artificial intelligence system such as ChatGPT can consume as much electricity as leaving a light bulb on for several minutes. If millions of such queries are made every hour, the electricity toll becomes enormous.
Advanced cooling systems, such as liquid cooling, can cut waste by up to 90 percent. However, these are expensive, and most centres in the Global South still use cheaper air cooling, which is less effective. The result is that poorer nations often face higher electricity costs for the same digital services.
Growing Emissions
The carbon footprint of data centres depends on the fuel used to generate their electricity. In 2023, fossil fuels made up 56 percent of their energy mix, while renewables accounted for 27 percent and nuclear for 15 percent. In countries like the United States, natural gas and nuclear reduce emissions somewhat. But in India and China, coal dominates, leading to much higher carbon pollution.
Though emissions from data centres are still less than 1.5 percent of the global total, they are among the fastest-growing sources. This is worrying because the world has limited “carbon space” left under climate agreements. If the North fills much of this space with emissions from its data centres, the South will be forced to restrict its own growth. It is like having a limited number of chairs in a room; if the North takes most of them, the South is left standing. This unfairness could block development and increase global inequality.
Policy Dilemmas
Governments face tough choices. Many nations have imposed efficiency standards such as Power Usage Effectiveness (PUE) to limit waste. Big companies sign agreements to buy renewable power, but solar and wind cannot provide continuous energy. As a result, natural gas and nuclear are regaining favour, especially in the United States where firms have invested heavily in new capacity.
For the Global South, however, the challenge is sharper. Offering cheap land and power may attract investment, but it could also lead to local electricity shortages or rising tariffs for citizens. Without strict environmental standards, the South risks trading long-term sustainability for short-term profit. It is like renting out your house cheaply but then finding you cannot afford your own food because costs have risen.
Towards Balance
The growth of data centres shows the deep divide between the North and South. The North enjoys profits and advanced technologies, while the South provides the users but gains little in return. To change this pattern, the Global South must invest in advanced infrastructure, promote artificial intelligence research, and develop skills in its workforce. At the same time, global climate talks must recognise the unfair carbon burden created by the North’s energy-hungry data centres.
Emerging technologies may help. Artificial intelligence itself could optimise electricity grids, improve renewable integration, and expand electrification in poorer regions. Yet these solutions are uncertain and cannot be relied upon alone. Ultimately, fair policies, strong regulation, and international cooperation are essential to ensure that the promise of data centres is shared more equally.
Implications for India
India stands at a critical crossroads in the story of data centres. On one hand, its vast population and rapid digital growth create a natural demand for local centres. The Digital India programme, rising e-commerce, and increasing use of artificial intelligence make it one of the largest future markets. On the other hand, India’s heavy reliance on coal for electricity means that expanding data centres could sharply raise emissions. The Digital Personal Data Protection Act of 2023 has already pushed global firms to consider local storage, but challenges remain. Unstable power supply in some regions, high cooling costs in hot climates, and pressure on water resources for cooling could make expansion costly. Unless India invests in renewable energy and efficient cooling, it risks repeating the mistakes of the Global North while also straining its development goals.
Conclusion
Data centres are the hidden engines of the digital world, enabling everything from social media to artificial intelligence. Yet they also consume vast electricity, produce rising emissions, and deepen inequalities between the Global North and South. As Powell and Sati highlight, the benefits are concentrated in wealthy nations, while poorer regions are left with few centres, unreliable power, and growing dependence. Unless fairer policies and sustainability standards are adopted, the digital revolution may repeat old patterns of inequality under a new guise. The task ahead is not simply to build more data centres but to build them wisely, with justice, efficiency, and global balance in mind.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
