BRISBANE: The developer of what’s set to be one of Australia’s biggest data centres (DCs) has been hit by power supply problems, highlighting how access to electricity could become a bottleneck for the country’s rollout of artificial intelligence (AI) infrastructure.
NextDC Ltd requested an immediate trading halt on Monday as it assessed the impact of delayed power supply at its M3 DC in Melbourne, including possible implications for its fiscal 2027 guidance.
The DC operator has asked for the suspension to remain in place until it releases an announcement or trading begins tomorrow.
Its board hasn’t yet met to consider the issue or its consequences, according to the request to Australian Securities Exchange.
The setback highlights a challenge confronting Australia’s DC buildout, which Commonwealth Bank of Australia estimates could reach A$150bil (US$105bil) by 2030.
The energy-hungry facilities require reliable around-the-clock electricity supply, just as Australia is retiring ageing coal plants and relying more heavily on variable wind and solar.
Unless investment in generation, storage and grid capacity keeps pace, the planned expansion could be delayed.
“This points to a broader infrastructure challenge beyond M3’s potential delay,” said Naomi Wagura, a researcher at Accela Research, which is focused on the energy transition.
“DCs can be built much faster than the electricity infrastructure needed to supply them, creating a risk that power availability falls behind expansion plans.”
Network operator AusNet Services Holdings Pty Ltd said power demand from advanced DC proposals in Victoria – which accounts for about a third of facilities seeking transmission connections across Australia – exceeds the state’s existing capacity.
Competition for electricity – and the grid capacity needed to deliver it – is acute in Melbourne’s west, where M3 is located.
Network operators Jemena Ltd and Powercor Australia Ltd warned in August that DCs were seeking more power in the area than the grid could accommodate.
NextDC was not immediately available to respond to questions, and the statement didn’t clarify what caused the power delay.
The company’s share price has plunged by around a third since the end of August.
The delay likely relates to Jemena pausing work on electricity lines that were meant to deliver power to M3, Citigroup Inc analysts Siraj Ahmed and Howard Suen said. It could reduce NextDC’s fiscal 2027 operating earnings by as much as A$25mil, they said.
M3, which serves cloud, AI and large-scale enterprise platforms, is currently partially operable. — Bloomberg
