Our online lives are increasingly reliant on digital data, whether it’s asking an AI chatbot a question, generating a video or transcribing an online meeting.
Datacentres – giant warehouses stacked with servers to process and store all that data – have been around for decades. But what’s changing is the rapid pace and scale of industry growth, fuelled by the uptake of artificial intelligence.
Technology companies are pushing for Australia to become a hub for data processing and storage. But with 260 datacentres operating – mostly in Sydney and Melbourne – and dozens more in the offing, concerns about the impacts on power and water resources are also rising.
What has been said about datacentres – in the US and Australia – this week?
In the US, president Donald Trump announced “ratepayer protection pledges” requiring tech companies to meet their own power needs.
“Many Americans are also concerned that energy demand from AI datacentres could unfairly drive up their electric utility bills,” he said. “They can build their own power plants as part of their factory, so that no one’s prices will go up.”
In Australia, energy minister Chris Bowen acknowledged “datacentres are big energy users”, an issue he said would be addressed in a forthcoming AI and datacentre strategy.
“People who are building datacentres do need to build new energy to go with it, and that energy will be renewable. But we also want to ensure that energy use has flexibility and redundancy built in.”
A coalition of energy and environment groups, including the Clean Energy Council, Electrical Trades Union, Australian Conservation Foundation and Climate Energy Finance, proposed a set of “public interest principles for datacentres” that include investing in new renewable energy and using water responsibly.
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“If you want to build a datacentre, you should have to build the renewables and water recycling to power it,” the ACF chief executive, Adam Bandt, said. “Big tech corporations should be forced to do their fair share so they don’t drain our resources.”
The Australian Energy Council says key policy questions still need answering: will datacentres need to be 100% renewable? And will that be based on total demand, or take into account when the electricity is being used?
Meanwhile, an inquiry in NSW will examine the social, environmental and economic effects of the datacentre boom.
Are datacentres a threat to Australia’s electricity supply for households and businesses?
Datacentres currently draw about 2% of electricity from the national grid, but that share could triple within five years, according to the Australian energy market operator (Aemo).
By 2030, Aemo forecasts that datacentre energy demands could exceed the power used by the nation’s fleet of electric vehicles. And by 2035, the industry could consume 21.4 terawatt hours of power, an amount just shy of the annual consumption of Australia’s four aluminium…
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