CANBERRA: Australia sees data centre (DC) electricity use rising almost sevenfold over the next decade, highlighting the need for investment in generation and storage as the nation’s aging coal plants are retired.
The computing facilities are expected to use 34 terawatt-hours of the National Electricity Market’s power by 2035 to 2036, boosting their share to 13% from 3%, the Australian Energy Market Operator (Aemo) said in its annual Electricity Statement of Opportunities.
However, a more-than-doubling of last year’s record generation and storage connections has helped improve the reliability outlook.
“A significant amount of new capacity is expected to be delivered between now and the early 2030s, helping to replace retiring generation and support growing electricity demand,” Aemo chief executive officer Daniel Westerman said in a statement.
“Beyond 2030, the next wave of investment will be critical to maintaining reliability.”
Australia is seeking to capture the economic benefits of a DC buildout that Commonwealth Bank of Australia estimates could reach A$150bil (US$108bil) by 2030, while limiting the strains on its grid and water supplies.
The government is pushing to ensure new DCs use renewable energy, despite opposition from regional administrations.
“DCs are particularly influential because they operate relatively consistently throughout the day and across seasons, similar to large industrial loads,” Aemo said in its report.
That puts pressure on the grid during periods when consumption is lowest.
Demand from the facilities can also come online faster than major energy infrastructure can be built to power it. That risks bottlenecks, higher prices for consumers and an increased reliance on fossil fuels.
However, the sector’s expansion hasn’t been without challenges.
More than a third of the projects Aemo listed last year have since been canceled, according to the report.
Meanwhile, 13 gigawatts (GW) of coal-fired plants and almost 2GW of gas generation are now slated for retirement within the decade.
About 9GW of new generation and storage reached full output in 2025 to 2026, double the previous year. — Bloomberg
