Australia is on the cusp of a data centre revolution, with a staggering £122 billion investment pipeline projected over the next decade. The country's data storage landscape is rapidly expanding to meet the escalating global demand for infrastructure supporting the artificial intelligence (AI) boom. As Australia's data centres sprout up at an unprecedented rate – 160 currently operating and 90 more in the pipeline, according to the Climate Council – concerns are growing about their environmental and social impact.
A prime example of this development is a proposed "hyperscale" data centre on Mamre Road in Sydney's outer western suburbs. The facility, set to span 52 hectares with six four-storey buildings, 936 cooling units, and 852 diesel backup power generators, would become Australia's single largest energy user – surpassing even the Tomago aluminium smelter's consumption. Local authorities are wary of this massive energy demand, with Penrith council opposing the project.
The energy implications extend far beyond individual facilities. Alex Hooper, head of climate and energy economics at Oxford Economics Australia, calculates that data centres currently account for 2.8% of electricity consumption on Australia's east coast – a figure projected to rise to 7% by 2030 and potentially above 10% by the mid-2030s. The Climate Council warns that wholesale electricity prices could increase by 20% by 2035 if this additional demand is not offset by new renewable energy sources. Moreover, data centres consume vast quantities of water for evaporative cooling – often in urban areas.
Despite the substantial investment and infrastructure development, data centres are not significant job creators in their operational phase. Studies indicate that only hundreds of workers are typically needed once a facility is active, raising questions about the economic return for the environmental and resource costs. Beth Webster, an economics professor at Melbourne University specialising in advanced manufacturing, acknowledges the pitfalls observed overseas but remains optimistic that Australia can implement robust regulations to mitigate these issues.
Pat Bustamante, senior economist at Westpac, firmly believes the data centre boom is beneficial for the economy – laying the groundwork for the next wave of productivity growth. However, the challenge lies in balancing economic benefits with environmental and social responsibilities – a dilemma echoed in other nations like the UK, where policymakers are also grappling with the implications of their own data storage expansion.