Australia's datacentre boom raises energy, water, and economic concerns
Consensus Summary
Australia is experiencing a rapid expansion of datacentres, driven by global demand for AI infrastructure, with over 160 operating and 90 proposed across the country. The Guardian and ABC both highlight major projects like the Mamre Road datacentre in Sydney and the Bundey facility in South Australia, which would require up to 800 megawatts of power and use closed-loop cooling systems. While supporters argue these projects will boost productivity, create jobs, and attract foreign investment, critics warn of significant energy and water consumption risks, particularly in drought-prone regions like South Australia. The Guardian notes datacentres could consume 7-10% of Australia’s east coast electricity by the 2030s, while ABC reports concerns over water depletion from the River Murray, with local farmers and conservation groups opposing the Bundey project. The federal government has set voluntary guidelines for datacentre operations, but opposition senators demand stricter regulations to prevent environmental and economic harm.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- Australia currently has about 160 operating datacentres and another 90 proposed, according to the Climate Council (Guardian) and industry figures (ABC).
- The proposed Bundey datacentre in South Australia would require up to 800 megawatts of electricity, equivalent to powering around 800,000 Australian homes (ABC).
- The Bundey datacentre is proposed by Nasdaq-listed tech company IREN and aims to be operational by 2028 (ABC).
- Datacentres currently account for 2.8% of electricity consumption on Australia’s east coast, with projections of 7% by 2030 and above 10% by the mid-2030s (Guardian).
- The Bundey datacentre would use a closed-loop cooling system, with IREN stating less than 1% of its total on-site tank capacity would be depleted annually (ABC).
- The Mamre Road datacentre in Sydney’s outer western suburbs, if approved, would be one of the biggest in the world, consuming more power than the Tomago aluminium smelter (Guardian).
- The Mamre Road project includes six four-storey buildings stretching 40 metres high, alongside 936 cooling units and 852 diesel backup power generators (Guardian).
- The Bundey datacentre is located near the Bundey electrical substation, which integrates large-scale renewable energy into the National Energy Market (ABC).
Points of Difference
Details reported by only one source:
- The Mamre Road datacentre is part of an estimated $155 billion investment pipeline over the coming decade.
- Alex Hooper, head of climate and energy economics at Oxford Economics Australia, states datacentres could account for 20% higher wholesale electricity prices on the east coast by 2035 if not offset by renewable energy.
- Penrith council opposes the Mamre Road project due to its massive energy consumption.
- Beth Webster, an economics professor at Melbourne University, believes Australia can avoid pitfalls seen overseas by implementing rules around datacentre development.
- Pat Bustamante, a senior economist at Westpac, says datacentres are laying the foundation for the next wave of productivity growth, comparing it to the PC and IT revolution of the late 1990s.
- The Greens have called for a moratorium on 'hyperscale' datacentre developments like the Bundey project.
- South Australian Senator Sarah Hanson-Young warns of a 'catastrophe' due to potential water depletion from the River Murray.
- The federal government has set voluntary 'expectations' for datacentre energy and water usage, but Senator Hanson-Young argues for legally binding rules.
- Federal Industry and Innovation Minister Tim Ayres claims Australia’s water resources will cope with AI infrastructure growth and expects state governments to follow federal guidelines.
- Local residents like Megan Gill (Burra cafe owner) and Bill Gebhardt (Goyder Regional Council Mayor) support the Bundey project for job creation and economic growth.
- Irrigators like Jeff Knispel fear water shortages due to the proposed datacentre’s potential draw on the River Murray, with a 20% cut in water allocation already announced for July.
- Henry Schutz, a farmer near Bundey, expressed national security concerns, fearing the datacentre could become a target in global conflicts.
Contradictions
Conflicting information between sources:
- The Guardian states datacentres account for 2.8% of electricity consumption on Australia’s east coast, while ABC reports the federal government forecasts 2% nationally and 12% by 2030.
- The Guardian mentions datacentres are not big job creators, with studies showing thousands of workers during construction but only hundreds once operational, while ABC highlights the Bundey project creating 500 jobs during construction and 200 ongoing positions.
- The Guardian suggests datacentres could raise wholesale electricity prices by 20% by 2035 if not offset by renewables, while ABC’s Minister Ayres claims energy prices won’t rise due to new power generation investments.
Source Articles
Thirsty and power hungry: Australia is in the middle of a datacentre boom – but not everyone is convinced
They’re a key part of the digital and AI economy, but they come at a high environmental cost and offer few operational jobs Get our breaking news email , free app or daily news podcast On Mamre Road, in Sydney’s outer western suburbs, there are plans to build a “hyperscale” datacentre that will be one of the biggest in the world. If approved, the 52-hectare site will include six four-storey buildings that stretch 40 metres high, alongside 936 cooling units and 852 diesel backup power generators.
'Sleepwalking into a catastrophe': Proposed data centre raises water use fears
To its supporters, this proposed data centre will provide much-needed regional jobs, but in the nation's driest state, critics say the draw on river water to cool the machines could be too great.
Proposed data centre faces scrutiny over water and environmental risks
A massive data centre proposed for SA faces scrutiny over water and environmental risks.