A surge in data centre construction could drive up electricity prices and climate pollution unless governments intervene, according to a new report from the Climate Council released today.
The report, Clouded future: Managing risks of the data centre boom, finds Australia is already the world’s second‑largest data centre investment destination behind the United States, with 162 facilities operating and more than 90 projects planned. Energy demand from data centres is expected to triple by 2030, potentially consuming up to six per cent of electricity on the main grid — roughly enough to power every home in Victoria.
With the Hunter identified as a potential location for future data centres, Energy Estate co‑founder and chief projects officer Simon Currie says regional hubs could play a key role — if development is done properly.
“If you stand back and think about what a data centre needs — power, water and grid connection — the Upper Hunter makes a lot of sense,” he said.
However, the Climate Council warns that without additional renewable generation and storage, the extra demand could delay the retirement of ageing coal stations and increase reliance on expensive fossil gas, particularly in NSW and Victoria. That, the report says, would place upward pressure on wholesale electricity prices.
Mr Currie said data centres should be required to support new energy generation rather than drawing from existing supply.
“We should not be allowing data centres to compete for the power sources that are there today,” he said.
“We need new, additional forms of energy to power these new industries.”
The report calls on governments to require data centre operators to fund their own energy and water infrastructure, maximise efficiency, use flexible demand, and make future power and water use transparent.
One site that could draw plenty of interest for AI companies is Liddell Power Station. With the demolition of the stacks last week, AGL says that data centres is one possibility that is being explored for the site, alongside more battery storage, and other industrial adventures,
