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Home Electricity

Data centres are draining the grid, but there’s a better way

by Tom Parker
April 1, 2026
in Electricity, News, Renewable Energy
Reading Time: 2 mins read
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Australia data centre

TBH believes Australia should establish 'integrated utility precincts' to support data centres. Image: TBH

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A consultancy believes reframing data centres as anchors of shared energy and water infrastructure rather than isolated, high-intensity loads is the best way to sustainably grow such systems.

This would involve the development of ‘integrated utility precincts’, where power generation, storage, water treatment and cooling are planned at a precinct or district scale, with shared infrastructure reducing duplication of assets and lowering capital and operational costs.

An integrated utility precinct would comprise shared renewable energy generation and storage, recycling-water systems and waste-heat reuse to ensure data centres are powered in the most sustainable way.

“The next phase of global data-centre growth will be shaped by how effectively facilities integrate with surrounding energy, water and community systems,” TBH director and global data-centre lead Rob Hammond said.

“Integrated utility precincts provide a pathway to move beyond incremental, site-by-site solutions and deliver infrastructure that is efficient, resilient and socially sustainable.”

TBH draws on examples from Asia-Pacific, the Middle East, the US, and Europe in detailing how integrated utility precincts can be developed.

In Japan, SAKURA Internet’s zero-emission Ishikari data-centre facility leverages cold-climate conditions, abundant hydro and wind resources and proximity to industrial land parcels that support phased precinct-scale expansion.

Microsoft’s Goodyear campus in Arizona, on the other hand, has had to invest in the expansion of a nearby wastewater treatment plant to secure the necessary water discharge, with air-cooling to be adopted in the future to reduce reliance on municipal water systems.

As for Australia, SunCable’s Australia-Asia PowerLink (AAPowerLink) proposes a multi-gigawatt solar and storage precinct north of Tennant Creek, supplying both industrial and hyperscale data-centre loads.

In its ‘Powering Data Centres’ report, TBH suggests ways in which an integrated utility precinct would benefit the Ishikari, Goodyear and AAPowerlink sites.

It comes as data centres increasingly compete for scarce energy and water resources, lengthening connection lead times and heightening public scrutiny.

The Australian Energy Market Commission (AEMC) recently released a draft rule proposing new technical standards for large data centres connecting to the National Electricity Market.

The AEMC asks for a clearer framework for defining and classifying large inverter-based loads such as data centres, while these facilities would need to meet specific disturbance ride-through requirements. Thirdly, the AEMC asks for alignment with global practice.

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