A surge in Australian data centre construction driven by artificial intelligence (AI) risks pushing up power bills and climate pollution, according to this report. The report reveals that Australia is already a global investment hotspot – second only to the United States in 2024 – with 162 data centres in operation and more than 90 projects in the pipeline. 

Data centres can require significant volumes of water, with industry estimates suggesting demand could at least triple by 2030. Without additional renewable generation, storage and system flexibility that matches energy demand, the industry risks extending reliance on coal and gas. With strong and enforceable policy, data centres can drive new clean energy investment and support a more resilient electricity system. The report proposes that every new data centre in Australia must be subject to strong standards for both its energy and water use.

Key findings

1. Australia is in the midst of a critical clean energy switch and data centre boom. Governments must act right now to secure our energy and climate imperatives.
2. A surge in energy and water demand from data centres is underway, with projects set to rival Australia's largest industrial users.
3. Without strong rules, data centre demand will push up power prices for homes and businesses, and worsen climate risks.
4. Enforceable rules can ensure the data boom supports a reliable, clean grid that secures Australia’s future.