Australia’s data centre investment boom now spans 162 operating facilities and more than 90 projects in the pipeline, with a $3.1 billion build under way in Sydney’s northwest. For households, the pressure point is direct: a Climate Council report warns electricity bills could rise 25 per cent if demand outruns new generation and safeguards.
Joel Gilmore on Australia
Joel Gilmore, an associate professor with the Climate Council and an energy expert, said Australia’s appeal to global operators starts with policy and infrastructure. “We have a very strong and stable regulatory and policy environment. We have excellent infrastructure, so for data centres that means land close to power, water and fibre optic cables,” he said.
That mix has made Australia the world’s second-biggest destination for data centre investment behind the US. International tech giants are increasingly sizing up the country, and the growth of artificial intelligence is driving part of the demand.
Marsden Park and AI demand
The clearest sign of the buildout is at Marsden Park in Sydney’s northwest, where construction is underway on a $3.1 billion mega data centre set to become the largest of its kind in the Southern Hemisphere. More projects in the pipeline mean more electricity use, more water demand, and more competition for existing grid capacity.
“McKinsey [consultants] estimates that roughly half of data centre usage at the moment is AI, and that could increase to around two-thirds over the next five years,” Gilmore said. “They estimate that AI demand could triple or even quadruple over that period, and it's growing much faster than non-AI workloads.”
Power and water costs
The Climate Council report warns data centre energy demand could triple by 2030 without intervention. Gilmore said the long-term scale could be material for the national grid: “You could be looking at data centres accounting for around six per cent of Australia's electricity demand in the long term.”
“That's a huge increase in electricity consumption,” he said. The report also says the cost of water could rise if the boom is not managed, leaving households exposed if new demand is not matched by new energy generation and policy safeguards.
For consumers, the practical issue is not the headline investment total but who pays for the extra load. If generation, grid planning and water policy lag the buildout, the report’s 25 per cent electricity bill warning becomes the risk to watch, not a theoretical one.
