Australia’s state and federal energy ministers have agreed that power-hungry datacentres, currently swelling to meet the insatiable demands of artificial intelligence, should be forced to invest in enough new solar and wind generation to fully offset their electricity needs. The decision, reached at a meeting last week and backed by all ministers except Queensland’s, also requires datacentres to provide “demand flexibility services” - a fancy way of saying they should learn to stop sucking the grid dry whenever they feel like it.
The push comes amid growing opposition to the datacentre boom, particularly when these facilities pop up in residential areas, where they apparently enjoy both guzzling electricity and straining local water supplies for cooling. The Australian Energy Market Commission (AEMC) has been asked to advise ministers by July on how to implement these demands.
Federal Energy Minister Chris Bowen, in a statement that could double as a motivational poster, said datacentres “were one of the biggest drivers of new energy demand” and that ministers wanted “to make them an asset to the energy grid, not a strain.” He added, with the air of someone laying down the law at a school assembly, “If datacentres want to benefit from Australia’s energy grid, we think they should do their bit to strengthen it.”
Queensland’s Energy Minister David Janetzki, who also serves as the state’s treasurer, begged to differ, insisting that “affordability and reliability” were his priorities and that he’d need to see “details on costs, benefits, and risks before agreeing to any national proposal that impacts Queensland’s energy system and Queenslanders’ electricity bills.” Essentially: show me the spreadsheet.
Data from the peak body Data Centres Australia reveals the country’s 162 datacentres currently have an operational capacity of 1.4 gigawatts, expected to more than double to 3.2GW by 2030. The Australian Energy Market Operator forecasts a tripling in datacentre electricity use by 2030, with these facilities currently accounting for about 2% of the main east coast market’s electricity - a number that seems quaint until you consider the growth curve.
Data Centres Australia CEO Belinda Dennett expressed concern that “any policy uncertainty creates investment risk,” while noting that operators already offset 70% of their energy use through renewable energy agreements. “There is a strong ambition to offset 100% of energy use,” she said, “however that requires the availability of viable renewable energy projects.” Translation: we’d love to be green, but only if the green stuff is actually available.