���������¼�

Current situation

Multinational and Australian owned and operated DC companies aim to establish Australia as the premier Southern Hemisphere hub for hyperscale and AI workloads. Australia as one of the fastest-growing APAC markets with the potential to double in five years (CBRE 2023). By 2030, Australia’s data-centre sector is likely to be worth A$15–41bn annually¹, with capacity exceeding 4–5 GW.

Austrade (2023) highlights Australia as a regional data-centre hub, ranking Sydney and Melbourne among the top ten markets in Asia-Pacific. Connectivity improvements are also pivotal: new subsea cables linking Australia to Asia and the US are strengthening resilience and lowering latency (Submarine Cable Map, 2023; Dgtl Infra, 2024).

Linkage across national and state imperatives

DC growth is at the nexus of decarbonisation, sovereign AI, Future Made in Australia (FMA), comparative advantage and productivity imperatives of Commonwealth and state governments.�� Increasing productivity and ‘green industry’ at significant economic scale- eg value adding minerals using ESG compliant technologies - will require advanced AI, automation and edge computing solutions and orders of magnitude more cheap electricity in the right locations.

DCs and Australia’s industrial electricity supply crisis

The critical limiting factor for Australia’s digital transition is availability of electricity.�� Globally, ICT electricity demand has not been provisioned for and networks are struggling to keep up.�� By 2028 USA data centres may account for 7–12 % of national electricity usage (U.S. Department of Energy, 2024).

Limits to grid-based supply are driving hyperscalers (eg Meta, Google) to purchase and build nuclear power stations to meet gigawatt AI DC facility electricity loads.��

In 2025, Australian data centres are estimated to have consumed 3.9 TWh of electricity, roughly 2 % of grid-supplied electricity.�� Under a high-growth scenario, consumption is forecast to climb at ~25.1 % per year, reaching 12.0 TWh by FY 2030 and 34.5 TWh by FY 2050, with ~12 % of NEM supply being attributed to data centres by 2050 (Oxford Economics /AEMO, 2025).�� Data centres companies are not yet seeing a clear pathway for provision of firm electricity under the national electrification plan.����

The Australian Energy Market Commission (AEMC) is revising the National Electricity Rules to address mega loads like data centres, ensuring they meet grid connection and performance standards (KWM, 2025; AEMC, 2025). Transmission operators (e.g. AusNet) are building new forecasting frameworks to explicitly model data centre load, recognising it as distinct from traditional industry (AusNet, 2025).

Federal policy requires 5-star NABERS ratings for government workloads, driving efficiency and sustainability in new builds.�� ��NABERs itself needs fine tuning to accommodate the unique characteristics of DCs (Next DC, 2025).��

Congestion and competition for allocation is a significant issue.�� Transmission build-outs are long-cycle and lag demand.�� Data centres prefer metropolitan siting near users, but grid congestion is highest there, limiting renewables integration.�� As it stands, there is no specific plan for DCs and related critical ICT loads; they are instead managed within broader decarbonisation and electrification pathways.��

Compatibility of AI DCs with regional industrial hubs

AI DCs do not have the same external bandwidth priorities as conventional DCs.�� AI Inference and training tasks prioritise internal computing speed and GPU density. This means that AI DCs can be located where energy can be supplied cheaply and reliably, and where there is demand for edge computing and data services from heavy industry (eg mining, mineral processing).

Industrial electricity x10

Australia’s transition to green industry requires different thinking about provision of electricity to DCs and other heavy industrial loads such as mining, mineral processing and metal foundry.��

Providing for new industrial demand via upgrades to the national grid may not in all cases be the most efficient strategy.

In certain critical regional and peri-urban industrial hubs, consideration can be given to creation of independent electricity supply entities, using advanced technologies for generation, storage and distribution.�� Public/private companies supplying this service could aggregate demand across AI DCs, mines, metals, chemical and other industrial facilities.����

It is noteworthy that the electricity supply problems facing DCs are representative of those facing Australian heavy industry and manufacturing in general.�� Table 1 contrasts USA and Australian situations.��

A coordinate national program to boost supply of industrial electricity, looking outside the constraints of the national grid and NEM, would leverage ���������¼� expertise in integrated clean energy portfolios and inverter-controlled distributed generation.��

Follow the sun compute

Australia’s strength in solar energy must be part of the solution.�� Potentially, Australia can participate in global “follow the sun compute” ��solutions, taking advantage of cheaper solar power and also the ability of AIDCs to interrupt training and inferencing tasks, scheduling computing to match peak solar supply.�� ��

Water efficiency

DC water use is almost entirely driven by cooling choices, influenced by climate, workload intensity, and facility design. The trade-off is usually between higher electricity demand with air-cooling and higher water demand with evaporative cooling. ‘Zero water’ technologies for cooling are available but come with higher CAPEX and OPEX.�� ���������¼� is working with DCs that are committed to sustainable thermal management solutions that are tailored to Australian and APAC climates and geographies.

Social licence

Competition for electricity and land in urban areas has led to growing community opposition to data centres. Datacentres have significant land, amenity and resource footprints that must be intelligently provided for by planning, regulatory and infrastructure authorities.�� Established planning methodologies and standards must be modified to prioritise sustainable, ESG compliant DCs as vital infrastructure within urban, peri-urban and regional systems.�� This goes hand in hand with design and technology solutions that maximise energy and water efficiency, enable synergies with collocated industry (eg heat exchange), and minimise negative amenity impacts such as noise from cooling technology.

���������¼� objectives

In collaboration with Australia’s leading DCs, HPC and AI companies:

• Establish Australia as the southern hemisphere hub for ESG compliant, trusted data and AI services.
• Develop energy and cooling solutions tailored to the unique challenges and opportunities facing DCs operating in Australia and the region.
• Develop commercial IP with potential for domestic manufacturing of equipment and components
• Develop robotic pre-fabrication solutions for DC construction and system components
• Help establish colocation synergies between AI DCs and other companies that are heavy consumers of electricity and data services
• Contribute to a national road map for rapid growth in the sector that spans economic, engineering, planning and ESG considerations
• Industrial electricity x 10 - Collaborate with industry and government to fast-track sustainable provision of affordable gigawatt-scale electricity to DCs and other critical sectors that are implementing next generation ESG compliant technologies��

���������¼� capability

���������¼� is a global leader in sustainability engineering². Capability spans ���������¼� specialists and laboratories, networks across leading national and international research groups, and insight into the practical needs of the sector, based on consultation with industry and government partners.��

Themes are outlined below with reference to a sample of ���������¼� research leaders.

Industrial electricity

Expansion in the datacentre sector depends on access to reliable electricity. �����������¼� is a global leader in both mainstream and renewable energy technologies with extensive specialist expertise across Engineering schools and disciplines. This expertise spans the needs of industry at national, regional, enterprise, device and software level.

Relevant research leaders include:

Cooling and thermal management

Research frontiers include innovation in air cooling, liquid cooling technologies, dielectric fluids, immersion cooling, and hybrid solutions designed to improve heat transfer efficiency, reduce water and energy consumption, and extend component lifespans.��

Research leaders include:

Advanced materials

���������¼� teams are developing materials with superior thermal conductivity, dielectric properties, and structural resilience. Capability spans nanostructure characterisation for efficient components, alternative low-carbon industrial materials, and sustainable recycling.��

Research leaders include:

Built environment

���������¼� integrates architectural design, planning, computational modelling, and energy systems analysis to create holistic designs for buildings, precincts and future cities. Capability includes modularity, energy efficiency, embodied carbon and sustainable architecture and urban design

Research leaders include:

AI in construction and urban systems

���������¼� recognises the transformational scope digital technologies in achieving sustainability and productivity goals in the built environment sector.

Research leaders include:

Building control and logistics

���������¼� develops robotics and autonomous systems for building monitoring, predictive maintenance, and logistics.

Research leaders include:

Water distribution, management & sustainable allocation

���������¼� has deep expertise across the distribution, management, metrics and sustainable allocation of industrial water in urban and regional markets and works internationally in the field with the UN and other peak bodies.

Research leaders include:

• ABC News (2024) ‘Power-hungry data centres scrambling to find enough electricity to meet grid demand’, ABC News, 26 July. (Accessed: 26 September 2025).
• Arizton/Research & Markets (2024) Australia Data Center Market – Investment Analysis and Growth Opportunities 2024–2030. Arizton Advisory & Intelligence.
• Austrade (2023) Australia: The Next Data Centre Hub. Canberra: Australian Trade and Investment Commission.
• Australian Energy Market Commission (AEMC) (2023) Integrating large flexible loads into the National Electricity Market: Consultation paper. AEMC, Sydney.
• Australian Energy Market Commission (AEMC) (2025) AEMC modernises grid connection rules to accelerate energy transition and manage AI boom. (Accessed: 26 September 2025).
• Australian Energy Market Operator (AEMO) (2022) Integrated System Plan 2022: Step Change Scenario. AEMO, Melbourne.
• Australian Financial Review (2024) ‘Data centres face water and energy scrutiny’, Australian Financial Review, 5 June.
• Australian Government (2023) Data and Digital Government Strategy. Canberra: Digital Transformation Agency.
• AusNet (2025) Data centres: When to include them in electricity demand forecasts. Available here (Accessed: 26 September 2025).
• CAELed (2025) Global Data Center Power Consumption 2025: Regional usage patterns, AI impact and proven efficiency methods. (Accessed: 26 September 2025).
• CBRE (2023) Australia Data Center MarketView Q4 2023. CBRE Research.
• DC Byte (2023) Asia Pacific Data Centre Report. London: DC Byte.
• Department of Energy (DOE) (2023) Electricity Demand Growth from Artificial Intelligence and Data Centers. U.S. Department of Energy, Washington D.C.
• Dgtl Infra (2024) ‘Australia’s Subsea Cable Expansion’, Dgtl Infra, 12 April.
• Grand View Research (2024) Australia Data Center Market Size Report 2024–2030. Grand View Research.
• International Energy Agency (IEA) (2024a) Data centres and data transmission networks. (Accessed: 26 September 2025).
• International Energy Agency (IEA) (2024b) ‘Data center energy consumption set to double by 2030 to 945 TWh’, Data Center Dynamics. (Accessed: 26 September 2025).
• KWM (2025) Energising innovation: Data centres and the future of Australia’s electricity network. (Accessed: 26 September 2025).
• Macromonitor (2024) Australian Data Centre Construction Forecasts 2024–2030. Macromonitor.
• Mordor Intelligence (2024) Australia Data Center Market – Growth, Trends, and Forecast (2025–2030). Mordor Intelligence.
• NABERS (2024) National Australian Built Environment Rating System (NABERS) Annual Report 2023–24. NABERS, Sydney.
• Next DC (2025).�� ���������¼�/Next DC Consultation Workshop, July 2025, Next DC Sydney
• NextMSC (2024) Australia Data Center Market by Component, Enterprise Size, Application: Forecast 2024–2030. Next Move Strategy Consulting.
• Oxford Economics / AEMO (2025) Data Centre Energy Demand – Final Report. (Accessed: 26 September 2025).
• RenewEconomy (2025) ‘Huge data centres queue to join Australia’s grid, but not where wind and solar industry want them’, RenewEconomy. (Accessed: 26 September 2025).
• Submarine Cable Map (2023) Australia: Current and Planned Subsea Cable Systems. TeleGeography.
• U.S. Congressional Research Service (2024) Data Centers and U.S. Electricity Demand (Report R48646). (Accessed: 26 September 2025).
• U.S. Department of Energy (DOE) (2024) DOE releases new report evaluating increase in electricity demand from data centers. (Accessed: 26 September 2025).
• U.S. Energy Information Administration (EIA) (2024) Electric Power Monthly: February 2024. EIA, Washington D.C.
• World Resources Institute (WRI) (2023) AI, Data Centers, and the Grid: Scenarios for 2030. World Resources Institute, Washington D.C.
• World Resources Institute (2024) US Data Centers Electricity Demand: Future projections and policy implications. (Accessed: 26 September 2025).