In the industrial shadow of eastern Mumbai, the residents of Mahul wake up to a skyline dominated not by the glittering high-rises of India’s financial capital, but by the smokestacks of the Trombay Thermal Power Station. For years, the community—often described by local activists as a “toxic hell”—has lived in anticipation of a reprieve. The coal-fired units of the Tata Power facility, particularly the aging Unit 5 and Unit 8, were slated for decommissioning, relics of an older energy era that were supposed to make way for the city’s green transition. However, the insatiable digital appetite of the modern economy has rewritten that timeline. Instead of shutting down, these coal units have been granted a new lease on life, driven by a singular, surging force: the explosive growth of data centers.

Mumbai has emerged as the undisputed capital of India’s digital infrastructure, housing more than half of the country’s data center capacity. As global tech giants and domestic conglomerates race to build the server farms necessary to support cloud computing, artificial intelligence, and streaming services, the demand for reliable, uninterrupted power has skyrocketed. As reported by Rest of World, this demand has created a paradox where the infrastructure of the future is being sustained by the fuel of the past. The Maharashtra Electricity Regulatory Commission (MERC), faced with the terrifying prospect of blackouts in the country’s financial hub, has extended the operational life of the Trombay coal units, prioritizing grid stability over immediate decarbonization goals.

The collision between India’s ambitious net-zero targets and the pragmatic reality of keeping the servers running has exposed a critical vulnerability in the nation’s energy transition, forcing regulators to choose between digital uptime and clean air.

The decision to keep the coal fires burning is rooted in a capacity crisis that industry insiders have watched unfold with increasing alarm. Mumbai’s peak power demand has consistently breached historical records, driven largely by the cooling and computational needs of data centers. These facilities are energy voracious; a single hyperscale data center can consume as much electricity as a small town. According to market analysis by JLL, Mumbai’s data center capacity is projected to exceed 1 gigawatt in the coming years, a load that the current transmission infrastructure is struggling to support. The grid is congested, and the transmission lines required to bring in renewable energy from outside the city are years behind schedule.

This infrastructure bottleneck has effectively landlocked Mumbai’s energy market. While solar and wind power are abundant in other parts of Maharashtra and India, the transmission corridors—specifically the critical 400kV lines—are insufficient to wheel that green power into the city center where the data centers reside. Citing the risk of load shedding, the MERC noted that without the local generation provided by Tata Power’s coal units, Mumbai’s grid would lack the inertia and base load required to remain stable. As detailed in reports by The Economic Times, the regulator’s extension of the power purchase agreement is a tacit admission that the physical grid has failed to keep pace with the digital economy.

While tech giants publicly tout their commitment to carbon neutrality and 100% renewable energy, the physical electrons powering their Mumbai operations tell a different, carbon-heavy story dictated by transmission constraints.

The beneficiaries of this arrangement are the operators of the data centers, ranging from global heavyweights like NTT and ST Telemedia Global Data Centres to domestic titans like the Adani Group. For these companies, power reliability is the primary currency; a few seconds of downtime can cost millions in penalties and reputational damage. Consequently, they require a firm, dispatchable power source that renewables, without massive battery storage, cannot yet provide around the clock. The irony, as highlighted by industry observers on Slashdot, is that the very technology sector pitching itself as a driver of efficiency is currently the primary justification for extending the lifespan of polluting fossil fuel assets in a densely populated metropolis.

The corporate landscape of this energy dilemma is dominated by a few powerful conglomerates that control both the data and the power. The Adani Group, for instance, is aggressively expanding its footprint in both sectors through AdaniConneX and Adani Electricity. This vertical integration allows for strategic maneuvering, but it also highlights the complexity of the transition. While Adani has announced massive investments in green hydrogen and solar, the immediate operational reality in Mumbai relies on the stability provided by thermal generation. The interplay between Tata Power, which operates the Trombay plant, and the distribution companies purchasing that power, underscores a market where “green” is a future aspiration, but coal is the current necessity.

The delay in critical infrastructure projects, such as the Kharghar-Vikhroli transmission line, has created a dependency loop where coal capacity is retained simply because the bridge to renewables remains unbuilt.

The human cost of this digital boom is borne disproportionately by the residents of Mahul and Ambapada. Rest of World conducted on-the-ground reporting revealing that families in these neighborhoods are trapped in a cycle of respiratory illness and environmental degradation. The Trombay plant, which uses sea water for cooling and coal for generation, releases particulate matter that settles over the surrounding chawls and rehabilitation colonies. For the residents, the cloud is not a virtual storage space for photos and emails; it is a literal cloud of fly ash and sulfur dioxide. The disconnect between the sanitized, air-conditioned server halls and the soot-covered windows of the nearby residents illustrates the stark inequality embedded in the digital infrastructure build-out.

Regulatory filings indicate that the extension of the coal units is not indefinite, but the timelines are slippery. Originally meant to retire earlier, the dates are pushed back as demand projections are revised upward. The MERC has mandated that Tata Power ensure the availability of these units to prevent “islanding”—a scenario where Mumbai is cut off from the state grid during a failure. This technical requirement for islanding capability is a unique feature of Mumbai’s power design, and thermal plants provide the spinning reserves necessary to maintain it. Until battery energy storage systems (BESS) become economically viable at a gigawatt scale, coal remains the only technology capable of providing this specific type of grid security.

As artificial intelligence workloads begin to demand even higher power densities per rack, the strain on Mumbai’s grid is expected to intensify, potentially delaying the retirement of thermal assets even further.

The industry is attempting to pivot, albeit slowly. Companies like CtrlS and Nxtra by Airtel are investing in captive solar parks and wheeling power where possible, but they are limited by the inter-state transmission system (ISTS) charges and the physical bottlenecks at the city periphery. The government is pushing for the faster completion of the 400kV transmission ring around Mumbai, which would theoretically allow the city to import clean power from the vast solar farms in the Deccan plateau. However, right-of-way issues and bureaucratic red tape have plagued these projects for nearly a decade. Until these lines are energized, Mumbai remains an energy island dependent on its internal thermal generation.

Ultimately, the situation in Mumbai serves as a bellwether for global metropolitan hubs grappling with the dual pressures of digitization and decarbonization. The narrative of a seamless green transition is fracturing against the hard physics of power consumption. As data centers become the new steel mills of the 21st century in terms of energy intensity, the legacy infrastructure of the 20th century—coal plants like Trombay—are being called out of retirement. For the industry, it is a business imperative; for the residents of Mahul, it is a continuing public health crisis; and for the planet, it is a stark reminder that the cloud runs on the ground.