Australia Data-Center Power Use Seen Up Sevenfold by 2036
(Bloomberg) -- Australia sees data-center electricity use rising almost sevenfold over the next decade, highlighting the need for investment in generation and storage as the nation’s aging coal plants are retired.
The computing facilities are expected to use 34 terawatt-hours of the National Electricity Market’s power by 2035-36, boosting their share to 13% from 3%, the Australian Energy Market Operator said in its annual Electricity Statement of Opportunities. However, a more-than-doubling of last year’s record generation and storage connections has helped improve the reliability outlook.
“A significant amount of new capacity is expected to be delivered between now and the early 2030s, helping to replace retiring generation and support growing electricity demand,” AEMO Chief Executive Officer Daniel Westerman said in a statement. “Beyond 2030, the next wave of investment will be critical to maintaining reliability.”
Australia is seeking to capture the economic benefits of a data-center buildout that Commonwealth Bank of Australia estimates could reach A$150 billion ($108 billion) by 2030, while limiting the strains on its grid and water supplies.
The federal government will legislate a national standard on data centers’ use of electricity and water as the government aims to harness the technological development to bolster the economy without provoking a backlash from people who live near the proposed sites.
Prime Minister Anthony Albanese will tell a meeting of the leaders of all the states and territories on Wednesday about the plan, which is opposed by two of the regions.
“You need social license as one thing, so you need to make sure that on energy, that they’re adding to the grid, not just coming along and using energy that can be used for other purposes, that would therefore lift power bills for others,” Albanese said on radio on Tuesday.
“We need to make sure that’s got right, we need to make sure that water is got right, and we need to make sure that location is right as well.”
Demand from the facilities can also come online far faster than major energy infrastructure can be built to power it. That risks bottlenecks, higher prices for consumers and an increased reliance on fossil fuels.
“Data centers are particularly influential because they operate relatively consistently throughout the day and across seasons, similar to large industrial loads,” AEMO said in its report. That puts pressure on the grid during periods when consumption is typically lowest, it said.
However, the sector’s expansion hasn’t been without challenges. More than a third of the projects AEMO listed last year have since been canceled, according to the report.
Meanwhile, 13 gigawatts of coal-fired plants and almost 2 gigawatts of gas generation are now slated for retirement within the decade. About 9 gigawatts of new generation and storage reached full output in 2025-26, double the previous year.
©2026 Bloomberg L.P.
