{"id":170584,"date":"2025-11-25T16:32:34","date_gmt":"2025-11-25T05:32:34","guid":{"rendered":"https:\/\/www.climatecouncil.org.au\/?p=170584"},"modified":"2025-11-28T13:45:04","modified_gmt":"2025-11-28T02:45:04","slug":"what-does-the-data-centre-boom-mean-for-australias-switch-to-renewables","status":"publish","type":"post","link":"https:\/\/www.climatecouncil.org.au\/what-does-the-data-centre-boom-mean-for-australias-switch-to-renewables\/","title":{"rendered":"What does the data centre boom mean for Australia\u2019s switch to renewables?"},"content":{"rendered":"\n

Data centres make many of the things we take for granted in our day-to-day lives possible: sending emails, online shopping, streaming tv shows, cloud storage and navigation apps \u2013 the list goes on. They are the foundation of our growing digital economy, and are bringing new investment and skilled jobs<\/a> to Australia. Data centres can help cut climate pollution and boost productivity by making many processes more efficient, but they also use large amounts of energy and water. As demand for data centres surges, driven largely by the growth in artificial intelligence (AI) and cloud computing, we need to carefully manage their impact on our grid and environment. <\/p>\n\n\n\n

Here are eight key things to know about data centres and what they mean for Australia and our shift to renewables.<\/p>\n\n\n\n

1. What are data centres?<\/strong><\/h3>\n\n\n\n

Data centres are buildings that run all day, every day, to process, store, and manage digital data. They include equipment like servers, routers, switches, firewalls, and storage systems. They can range in size from small sites under 500 square metres, to massive \u201chyperscale\u201d centres more than 100,000 square metres.<\/p>\n\n\n\n

2. How many data centres are in Australia?<\/strong><\/h3>\n\n\n\n

There are already more than 250 data centres<\/a> in Australia. Despite our relatively small population, we are in the top five<\/a> locations for data centres in the world. They\u2019re usually near major cities, so they can be easily connected to the electricity grid and to the businesses and government agencies that rely on them. <\/p>\n\n\n\n

3. How much energy does a data centre use?<\/strong><\/h3>\n\n\n\n

Like their physical size, the energy needs of data centres vary greatly. Typical data centres are around 5-10 megawatts (MW) in size (NB 1 MW is enough to power around 300 homes). or use about as much energy as around 3000 houses. Emerging \u201chyperscale\u201d data centres can be more than 100 MW, needing as much electricity as a small city<\/a>. In total, Australia\u2019s data centres currently use just over 2% of the power in our main grid, and this is expected to grow to around 6 per cent by 2030<\/a> as AI and cloud computing grow.<\/p>\n\n\n\n

Data centre energy demand is forecast to grow nearly 5x over the next decade<\/h4>\n\n\n\n
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Source: <\/em>AEMO 2025-26 Inputs, Assumptions and Scenarios<\/em><\/a><\/figcaption><\/figure>\n\n\n\n

4. How much climate pollution does a data centre create?<\/strong><\/h3>\n\n\n\n

Most of the climate pollution from data centres comes from the electricity they use, and along their supply chains. The emissions from energy use depend on a centre\u2019s size, location, and energy efficiency. For example, a data centre in a state with a high share of renewables like Tasmania, the ACT or South Australia, will generally have lower emissions than one in states that rely more on coal and gas. Some data centres are also cutting their climate pollution (and their power bills) by making or purchasing clean power. <\/p>\n\n\n\n

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What are the climate impacts of using AI?<\/strong><\/h4>\n\n\n\n

AI is now powering processes and devices that many of us regularly use \u2013 like search engines, social media algorithms, maps apps, smart watches and voice recognition tools. It is becoming embedded in our digital lives, often without us playing an active role. More people and businesses are also actively using large language model (LLM) tools like ChatGPT. There are growing concerns about the climate and environmental impacts of AI.<\/p>\n\n\n\n

Research estimates<\/a> that a typical text-based AI query now uses about 0.2-0.3 watt-hours (Wh). The energy consumed depends on the model used, and increases with the complexity of the query \u2013 generating an image may use around 0.5Wh. For comparison, boiling a kettle uses around 100 Wh. The climate pollution from an AI query depends on many factors including the location of the data centre and measures it has in place to improve energy efficiency and use renewable power. Research shows that a typical AI query creates a few grams<\/a> of carbon pollution. <\/p>\n\n\n\n

Should I limit my AI use to reduce emissions?<\/strong><\/h4>\n\n\n\n

Firstly, energy use and climate pollution are just two of many factors to consider when deciding whether to use AI tools. Minimising AI use is one thing we can do to reduce emissions, just like eating less meat, riding a bike to work instead of driving, or composting food waste. Ultimately though, governments and corporations have the responsibility to set and work within policy that addresses the climate emergency including by switching to renewable energy and away from fossil fuels.<\/p>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n

5. How can data centres reduce their energy use and climate pollution?<\/strong><\/h3>\n\n\n\n

There are many ways that data centres can cut climate pollution, and many are already being adopted in Australia. Many data centre operators in Australia have committed to 100% renewable energy by 2030. Actions they are taking include:<\/p>\n\n\n\n