Here’s a startling fact: Australia’s datacentres are on track to consume more energy than electric vehicles by 2030, and their power demand could triple in just five years. But could this explosive growth derail the nation’s net zero ambitions? It’s a question that’s sparking both excitement and alarm across the country.
Currently, datacentres draw about 2% of Australia’s electricity from the National Grid, totaling around 4 terawatt-hours (TWh). However, the Australian Energy Market Operator (Aemo) predicts a dramatic surge—a 25% annual increase—pushing consumption to 12 TWh by 2030, or 6% of the grid’s total demand. By 2050, that figure could soar to 12%. And this is the part most people miss: in states like New South Wales and Victoria, where most datacentres are located, they could account for 11% and 8% of each state’s electricity demand by 2030, respectively.
Tech giants like OpenAI and SunCable are championing Australia’s transformation into a global hub for data processing and storage. Just last month, the Victorian government pledged a $5.5 million investment to cement its position as Australia’s datacentre capital. But with 260 datacentres already operational and more on the horizon, experts are sounding the alarm. What happens when an industry’s growth outpaces its energy efficiency?
Consider this: a single hyperscale, AI-focused datacentre can consume as much electricity annually as 100,000 households. According to the International Energy Agency (IEA), global datacentre demand is growing four times faster than any other sector. Why? Because these facilities are multiplying in size and number, driven by the insatiable appetite for data storage and processing.
But here’s where it gets controversial: while tech companies often tout their investments in renewable energy, the reality is more complex. Ketan Joshi, a climate analyst with the Australia Institute, points out that the near-constant energy draw of datacentres often mismatches the intermittent nature of renewable energy generation. “Sometimes, these datacentres end up relying on fossil fuels to meet their demands,” he explains. “It’s like running on a treadmill that’s speeding up—you’re working harder just to stay in place.”
The energy intensity of datacentres is staggering. Rows of servers running 24/7 generate immense heat, requiring massive amounts of electricity for cooling. Professor Michael Brear from the University of Melbourne notes, “You need to air condition these spaces to keep the devices at safe operating temperatures. It’s a significant challenge.”
And this is the part that should concern everyone: as datacentre demand grows, it’s not just about energy consumption—it’s about where that energy comes from. Joshi argues that instead of renewables displacing coal and gas, these resources are being diverted to power datacentres. “We’re not making progress; we’re just keeping up with the demand,” he says. Some companies have even resorted to restarting mothballed nuclear power plants in the U.S. or proposing new gas generators in Australia to meet their needs.
By 2035, Aemo forecasts that datacentres could consume 21.4 TWh—nearly as much as Australia’s four aluminium smelters combined. The federal government’s recent AI plan acknowledges the issue, promising principles for datacentre investment that include renewable energy and water sustainability. But will it be enough?
Dr. Dylan McConnell from the University of New South Wales warns, “If renewables don’t keep pace with this demand, we risk locking in fossil fuel use for decades.” Unlike electric vehicles, which reduce petrol consumption, datacentres don’t offset their energy use elsewhere. The result? Higher power prices and a tougher path to net zero.
Here’s the burning question: Can Australia balance its tech ambitions with its climate goals? Or will datacentres become the Achilles’ heel of its energy transition? Let us know what you think in the comments—this debate is far from over.
