Read The Times Australia

Daily Bulletin

Power-hungry data centres threaten Australia’s energy grid. Here are 3 steps to make them more efficient

  • Written by: Johanna Lim, Research Associate, Strategic Technologies, University of Sydney
Power-hungry data centres threaten Australia’s energy grid. Here are 3 steps to make them more efficient

The Australian Energy Market Operator estimates data centres will consume 6% of Australia’s grid-supplied electricity by 2030.

To put that in context, that’s more than the current share of Australia’s healthcare and social assistance industry.

This reflects the rapid growth of Australia’s data centre industry – the backbone of artificial intelligence (AI). This growth is, in part, being driven by multi-billion-dollar investments from major tech players including AWS, Microsoft, CDC and NextDC. Atlassian co-founder Scott Farquhar has even suggested Australia could become Southeast Asia’s data centre hub.

The federal government is also fertilising the data centre industry. In August, for example, Treasurer Jim Chalmers announced the development of “national interest principles on data centres” as an outcome of the economic reform roundtable.

The power-hungry nature of data centres, however, poses major problems for the current energy grid in Australia. But there are three steps Australia can take to help power these facilities reliably and sustainably.

Increased volatility, increased risks

Unlike households and most industries, data centres require constant power. This adds pressure to an energy grid designed for variable consumption.

As more people use AI for more complex tasks, the workloads on data centres will intensify. This leads to increased baseload demand. But it also leads to unpredictable spikes and drops in demand which the grid was not built to manage. This volatility creates real risks.

In 2024, 60 data centres in northern Virginia suddenly disconnected from the grid due to a tripped safety mechanism. This unleashed a massive surge of excess electricity – which, were it not for network operators implementing emergency countermeasures, would have caused a massive blackout.

This near-miss highlighted the fragility of the grid when faced with sudden, large-scale data centre disconnections.

Clean energy can’t do it alone

The limitations of Australia’s current energy mix are another source of volatility.

While renewable energy is central to the clean energy transition, it alone can’t meet baseload and peak demands from data centres. The problem is twofold. First, renewables are intermittent. Second, energy storage and backup options can only be scaled to a limited degree.

This means most data centres will continue to rely on coal or gas in some form.

Most data centre operators have committed to 100% renewable energy by 2030. But in practice, this often means purchasing annual renewable credits or power purchase agreements.

These mechanisms don’t guarantee clean energy during actual operations – they simply help offset annual consumption. Meeting real-time demand with clean energy is a far more complex challenge. It requires greater investment in renewables, storage and transmission infrastructure. It also requires better coordination between energy regulators, utility companies and data centre operators.

These challenges were reflected in Australia’s new climate target – a 62–70% cut below 2005 levels by 2035. This sits below the 65-75% range initially proposed by the Climate Change Authority last year. Why the reduction? Among the cited “transition risks” is the significant growth of data centres.

A large white wind turbine in an open field.
While renewable energy is central to the clean energy transition, it alone can’t meet baseload and peak demands from data centres. Mick Tsikas/AAP

Becoming a global champion

Australia has an opportunity to develop policies that synchronise data centre expansion with more efficient energy and grid management.

First, Australia should promote computing methods at scale that reduce emissions but don’t compromise capabilities.

For example, smart scheduling software can automatically shift energy-intensive tasks, such as model training, to off-peak periods when renewable energy is most abundant. This wouldn’t affect more everyday, less energy-intensive tasks, such as using ChatGPT, that require immediate responses. Companies such as Google have already adopted this approach to reduce grid strain without impacting user experience.

Alongside this, data centres should be required to inform power companies in advance of large-scale AI training runs that can cause dramatic energy spikes. Companies such as Hitachi Energy have called on governments to implement such rules to support grid management, citing other energy-intensive industries, such as smelting, where prior warning is already a common practice.

Second, Australia needs to accelerate advanced energy storage innovations, including batteries, pumped hydro and thermal energy storage. Research in many of these technologies is already underway, backed by government initiatives and private investments.

Data centre company AirTrunk, for example, is exploring different ways of implementing battery energy storage systems in its new data centres. However, more targeted financial incentives and support – such as through the Future Made in Australia and the National Reconstruction Fund – can help to bridge the gap between research and commercial scalability.

Third, Australia can require data centres to set what are known as “power usage effectiveness” – or PUE – targets to drive energy efficiency.

PUE targets are calculated by dividing the data centre’s total energy use by its IT equipment energy use. A PUE closer to 1.0 indicates greater energy efficiency.

PUE limits in China helped reduce its average PUE from 1.54 to 1.48 in just one year. Similarly, voluntary initiatives such as the European Union’s code of conduct for data centre energy efficiency, have consistently lowered the average PUE among participating facilities.

There is no shying away from the reality that data centres are energy-hungry behemoths. However, with the right planning and policies, Australia could be a global champion for data centre growth that supports, not derails, the clean energy transition.

Authors: Johanna Lim, Research Associate, Strategic Technologies, University of Sydney

Read more https://theconversation.com/power-hungry-data-centres-threaten-australias-energy-grid-here-are-3-steps-to-make-them-more-efficient-266992

Business News

Executive Recruitment Solutions That Help Organisations Secure Exceptional Leaders

Leadership has a direct impact on organisational performance, employee engagement, strategic growth, and long-term success. Businesses operating in increasingly competitive environments require experi...

Daily Bulletin - avatar Daily Bulletin

Why A WooCommerce Website Designer Matters For Online Growth

Running an online store today requires more than simply listing products and waiting for customers to arrive. Businesses need a website that is fast, reliable, easy to navigate, and designed to suppor...

Daily Bulletin - avatar Daily Bulletin

Turning Your Empty Tables into Revenue

The rise of AI demand tools in hospitality, the EatClub–CommBank partnership, and seven trends reshaping Australian dining  A growing number of Australian venues are turning to AI-powered demand ma...

Daily Bulletin - avatar Daily Bulletin

High-Impact Dental Marketing Strategies That Are Driving Real Practice Growth Today

The landscape of dental practice growth in Australia has shifted dramatically over recent years. Standard, broad-spectrum advertising campaigns no longer yield the return on investment they once did. ...

Daily Bulletin - avatar Daily Bulletin

How Telematics Helps Australian Companies Improve Productivity

Operating a commercial fleet in Australia is a uniquely demanding endeavour. Between the sprawling urban sprawl of cities like Sydney and Melbourne and the immense, unforgiving stretches of the Outb...

Daily Bulletin - avatar Daily Bulletin

Inside the Icon: The BridgeMuseum Officially Opens at the Sydney Harbour Bridge

A bold new way to experience one of Australia’s most recognisable landmarks has arrived, with BridgeClimb Sydney officially opening the all-new BridgeMuseum.  Located inside the Sydney Harbour Bridge...

Daily Bulletin - avatar Daily Bulletin

Is Your Brand Showing Up in AI Search? Most Melbourne Brands Aren't.

The New Front Door Nobody Told You About Something changed. Quietly. Without a press release. The way buyers find businesses in Australia has been rewired. Not replaced, rewired. Google isn't dead...

Daily Bulletin - avatar Daily Bulletin

How Australian Businesses Can Measure SEO ROI

SEO can feel vague when you are staring at a dashboard full of numbers that do not clearly connect to revenue. The key is to measure the right signals in the right order, then tie them back to outcome...

Daily Bulletin - avatar Daily Bulletin

How Commercial Roller Shutters Improve Site Security Without Slowing Operations

Security upgrades can be frustrating when they make everyday work harder. A door that takes too long to open, creates bottlenecks at shift change, or fails at the worst time can turn “better protectio...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Gold Migration Lawyers in Liquidation: How the Closure Affects Your ART Appeal

If your appeal was with Gold Migration Lawyers, a recent change to how the Tribunal decides cases ...

The pressure cooker: life in urban Australia in 2026

Australian cities have always been demanding. Long commutes, rising housing costs, busy schedules a...

What Actually Makes a Good Criminal Lawyer in Melbourne

Most people only think about this question once. That is usually too late. Most people charged wi...

Why Working With A Chatswood Tutor Can Improve Academic Performance

Academic expectations continue increasing for students across primary school, high school, and senio...

Is It Worth Getting Solar Panels in Melbourne?

The real question is not whether solar works in Melbourne. It works. The question is what it is co...

How A Diploma Of Project Management Builds Practical Skills For Modern Work Environments

Developing the ability to plan, execute, and deliver outcomes efficiently is a key requirement in to...

How to Choose the Right Football for Every Level

Choosing a football may seem straightforward, but the right option depends on who will be using it a...

What to Ask a Wedding Photographer Before You Book

Booking a wedding photographer can feel deceptively simple: you like the photos, you like the vibe...

Why Stress Relief For Dogs Is Essential For Emotional Balance And Long-Term Wellbeing

Managing emotional health is just as important as physical care when it comes to pets, which is why ...