Expected electricity use from Australian data centers could put pressure on the grid and water resources in Australia
To avoid such a situation and invite community wrath, a coalition led by Carbon Zero Initiative says new data centers should match all electricity use with new renewable energy projects from day 1
Developers should provide storage, demand response, and grid support so as not to pass on any financial strain to the communities
The group calls for mandatory public reporting of energy, water, and emissions data for large facilities, and fast-tracked approvals tied to binding community benefit commitments
A coalition of unions, environmental groups, community organizations, and renewable energy industry bodies in Australia is urging that Australian data centers secure 100% renewable energy, warning they could face community and civil society backlash if they fail to act in the public interest.
This comes in the wake of US President Donald Trump directing big technology companies to build their own power plants for their data centers in his February 2026 State of the Union address. He said this will ensure consumers are protected from rising bills.
The Australian coalition explains that electricity demand from power-hungry data centers could rise 10-fold by 2035, consuming more power than Sydney, Melbourne, and Brisbane combined. Power demand from data centers is projected to increase from around 3TWh today to up to 30 TWh by 2035, according to the Australian Energy Market Operator (AEMO).
This will increase pressure on the grid and water resources and drive up power bills, while locking in emissions from coal and gas.
On the other hand, if the data centers are powered by 100% renewable energy, it will create new regional jobs in construction, operation, and related infrastructure. This will also ensure grid stability.
“If communities and civil society are not adequately engaged, a backlash against the sector is inevitable,” the coalition asserts. “We have a once in a generation opportunity to shape this industry so that it supports cheap, clean power, stronger regional economies, secure essential services and employment opportunities, rather than undermining them.”
In a joint statement, led by Carbon Zero Initiative, the coalition offers 8 public-interest principles for data centers, starting with data centers to secure their own 100% ‘additional’ renewable energy. This means that instead of relying on existing power supply, or certificates or offtakes from existing projects, these facilities must match 100% of the electricity they use with new renewable energy from day 1 of their operations.
As they bring new renewables onto the grid, new data centers must provide demand response, storage, and grid-support requirements to help strengthen grid stability. Building data centers within Renewable Energy Zones (REZ) could help these with transmission and network infrastructure within these zones. Such costs should not be socialized onto households and small businesses, it adds.
The Community Benefit Principle rules for eligibility and merit criteria, as included in the Capacity Investment Scheme (CIS) and the upcoming Future Made in Australia, should also apply to data centers. Data center approvals should be fast-tracked based on conditional, binding, and measurable social license commitments.
The coalition also demands that new data centers meet best-practice standards for energy efficiency, water use, cooling, and heat reuse, and also use water responsibly. For this, they need to factor in smart siting principles to avoid impacts on the environment and the land.
Data centers that use 1 MW or more of power should be required to report key information like hourly energy mix, water consumption, GHG emissions, cooling methods, etc., to a national public database. Creating and training the future workforce is also on the list.
“Government and industry should work together to coordinate a stable pipeline of projects to avoid ‘valleys of death’ and provide continuity of employment across multiple projects to provide durable prosperity beyond the peaks and troughs of the construction cycle, including into the operational period,” reads the statement.
The coalition says it acknowledges perceived AI demand as the key driver for data center growth, and wants it to be managed consistently with the country’s climate, water, and energy goals. Other signatories to the statement are the Clean Energy Council (CEC), Climate Energy Finance, WWF-Australia, and Australian Conservation Foundation, among others.
Amazon Web Services plans to invest AUD 20 billion in solar-powered data centers in Australia by 2029 (see Amazon to Invest AUD 20 Billion in Solar-Powered Data Centers).
The International Energy Agency (IEA) expects global data center electricity demand to more than double to about 945 TWh by 2030. While this growth may increase emissions, greater use of solar and wind power can help reduce the impact.
