New data centres must come with their own, new, sources of firmed renewable energy, or face a social backlash, a new alliance says.
Fears that data centres will suck up emerging renewable energy capacity and leave coal power still in the box seat are increasingly on the need-to-fix list of governments and regulators around the world.
And with national data centre principles expected to require sustainability and renewable energy targets in exchange for fast tracked planning approvals, a coalition of 11 Australian industry, union, and community and environmental groups want those rules to impose a modicum of control over the nascent sector.
“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,” says a joint statement backed by the Clean Energy Council, Electrical Trades Union, and Smart Energy Council, among others.
“If communities and civil society are not adequately engaged, a backlash against the sector is inevitable.”
The alliance outlined eight “public interest” principles that it wants the federal government to factor into its own upcoming framework.
These are 100 per cent additional renewable energy, providing added grid stability through the use of energy storage and demand response, appropriate siting in places that reduce network congestion, emissions reduction, responsible water use, transparent operations, community benefits sharing, and jobs training.
“Data centres can support Australia’s clean energy future, but only if new demand brings new renewables with it,” Carbon Zero Initiative project lead Alexander Hoysted.
“Clear guardrails now will benefit households, communities and the grid. Done right, data centres can accelerate Australia’s clean energy transition by anchoring new renewable generation and storage.
“We need to ensure growth strengthens the grid and expands supply, rather than competing with households and industry for limited capacity.
The scale of electricity needed by the anticipated data centre industry is enormous.
It’s expected to rise from 1.35 gigawatts (GW) today to between 5-8 GW by 2035, says Clean Energy Council CEO Jackie Trad.
It’s a volume of energy that will put a lot of pressure on existing resources and the plans for new generation, which are struggling to push through slow planning processes and slow transmission build outs.
“With the expected growth in demand it’s important Australia has a sustainable solution to meet the supply needs of new data centres,” Trad says.
“Data centres powered exclusively by new renewable energy can grow the existing supply pool without increasing pressure on existing residential and commercial electricity users.”
Consuming, not contributing
The joint statement taps into a fear that while Australia is finally moving in the right direction when it comes to building and connecting new generation, that extra could easily be sucked up by the new era of data centres, gargantuan AI “hyperscale” developments with energy needs the size of a small town.
Those energy needs are notoriously inflexible, given centre operators pay huge penalties for every minute of downtime.
Among the many data centre pitches sent to Renew Economy daily, many are targeting Australia’s currently curtailed excess solar and wind.
Some proposals se emotive language such as “stranded renewable energy” to show they will be grid-neutral, but others are aware of the growing issue, promising to “co-locate” data centre precincts to better manage grid demand.
But question remain around where they will get energy at, say, nighttime, and what they’ll do when big batteries sweep in, as they are now doing, to suck up that extra curtailed capacity.
At least one developer is solving the problem by building their own gas power station in the Southern Highlands of New South Wales.
These are scenarios that threaten to slow electricity decarbonisation, which is beginning to ramp up, push up consumer prices by creating energy scarcity and by driving up the need for new transmission infrastructure, and straining grids and scarce water resources.
The alliance notes that where data centre growth drives the need for new transmission, firming or network augmentation, those costs should not be socialised onto households and small businesses.
“Data centre investment is red hot, so we expect our governments to ensure that giving approvals to new infrastructure projects comes with clear community benefits,” says Climate Energy Finance director Tim Buckley.
“After all, the data centres can only be built leveraging the existing publicly funded water and grid infrastructure we have all paid for.”
“Approvals should be conditional upon new long-term firmed renewables PPA as a pre-requisite.”
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