Data centres have become the talk of the town, as a rapidly growing stream of AI facilities enter the local development pipeline.
Just last week, Australia’s largest data centre precinct – a 350-hectare AI hub sitting alongside the Melbourne Renewable Energy Hub in Plumpton – was publicised. With a planned capacity of 2.4 gigawatts (GW), Syncline Energy is set to build two data centres at the site. This exceeds initial plans for a 3.1GW, eight data-centre site.
To put this into perspective, Australia’s largest coal-fired power station – Origin Energy’s Eraring plant in New South Wales – has a total generation capacity of 2.92GW, and supplies about 25 per cent of NSW’s total power needs.
In February, Moody’s Ratings flagged Australia’s data-centre fleet would require 6GW of new generation capacity to support annual data-centre electricity consumption of more than 21 terawatt-hours (TWh) a decade from now. This would call on just under 10 per cent of the National Electricity Market (NEM).
Moody’s Ratings based its projections on the expectation Australian data-centre capacity would reach 4.7GW in 2035. The country’s current data-centre capacity sits at around 1.4GW.
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So how will these facilities be powered?
Federal Minister for Climate Change and Energy Chris Bowen said Australia’s data centres would need to “bring their own renewable energy”.
“Last month I put to the state and territory energy ministers a framework which they almost unanimously adopted,” he said on Friday. “Every state and territory, with the exception of Queensland, adopted that framework.
“That framework requires new data centres to, one, bring their own renewable energy. That is additional renewable energy, not renewable energy that is going to be built anyway.
“Two, they must be flexible and have redundancy built into the system, so they can turn up and down as necessary.
“And three, ideally, they should be located near power generation.”
Bowen speaks of the Federal Government’s Expectations of Data Centres and AI Infrastructure Developers framework, established in March to provide guardrails for data-centre development in Australia.
Five expectations have been put forward, one of which prioritises Australia’s renewable energy rollout and the need to regulate energy prices.
The framework specifically states that AI infrastructure developers should work with energy regulators and suppliers to secure new and additional clean energy generation and/or storage to offset demand.
Bowen said clean energy was not “a barrier to data centres, it is an essential ingredient”.
“We do need to be involved in the data centre revolution around the world, partly for sovereign capability,” he said. “But it has got to be done right. Data centres bringing their own new renewable energy is an important part of that.”
Independent consultancy TBH believes Australia should develop ‘integrated utility precincts’ to support data centres, where power generation, storage, water treatment and cooling are planned at a precinct or district scale.
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 sustainably.
“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.”
