A new political fight is brewing over data centres, with the artificial intelligence energy hubs on track to become Australia’s biggest electricity consumers in the next decade.
A report by the Energy Market Operator predicts their energy use will explode by 700 per cent over the next decade, setting the scene for a National Cabinet showdown.
WATCH THE VIDEO ABOVE: Data centre energy boom sparks political showdown
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The average household uses 15 kilowatt hours of energy a year. Data centres today consume 5 billion kilowatt hours. By 2036, they’ll use 34 billion – equal to every house in NSW and Victoria combined.
“We’re requiring new data centres to bring our own new renewable energy backed by gas firming,” Energy Minister Chris Bowen said.
But Queensland is rejecting the renewables-only policy, wanting the option of powering its data centres with coal and gas.
Shadow Energy Minister Dan Tehan said Queensland wants to use its energy abundance and natural resources.
The federal government is threatening legislation to force Queensland to comply.
“We’re not going to let Queensland run a race to the bottom,” Bowen warned.
AI hubs are set to become the biggest electricity consumers in the next decade. Credit: 7NEWS National Cabinet will discuss the AI data centre boom. Credit: 7NEWS While 225 Australian data centres are in planning, questions remain about whether communities want them as neighbours and if the development boom is sustainable.
One punter was asked about a data centre in NSW’s Blacktown, responding “that would be awesome”.
“I haven’t got a problem as long as it brings jobs in,” another resident added.
Tony Wood from the Grattan Institute expressed scepticism about the projections.
“I’m a little bit of a sceptic on some of this. I think we’ve already seen 40 per cent of the data centres that were being talked about 12 months ago have already been cancelled or postponed,” he said.
The political drama unfolded as Prime Minister Anthony Albanese took Cabinet on the road to Perth, while Opposition Leader Angus Taylor recovered from a fall during his charity bike ride.
Premiers will also face scrutiny at Wednesday’s National Cabinet meeting over how they’re spending the extra $4.7 billion allocated to counter domestic and sexual violence.
There are concerns federal money is simply replacing state funding rather than improving crucial frontline services and legal support for victims.