Data centres spruiked as energy grid ‘shock absorbers’
The federal climate change minister says the second-largest pipeline of data center investment in the world should be seen as a vote of confidence in Australia’s energy system.
Energy and Climate Change Minister Chris Bowen said Australia had renewable resources to host energy-hungry data centres, but it was important they interact flexibly with the grid to avoid outages.
“We need to make sure that these data centers build in extra capacity and redundancy as they are built, so they can become a resilient shock absorber,” he said at a Nature Conservation Council business breakfast on Wednesday.
“Our biggest energy user in NSW is the aluminum smelter, but it is also a shock absorber.
“When we need dialing back, he dials back.”
The world’s data center fleet is growing rapidly to accommodate the rise of AI tools, and Australia has become a preferred destination for new facilities.
But data centers are large consumers of energy and water, raising questions about their suitability as Australia tries to generate renewable energy fast enough to replace aging coal plants and meet climate targets.
A national plan published last year promised frameworks for energy and water use associated with AI infrastructure.
Mr Bowen also predicted a 1.9 per cent reduction in domestic greenhouse gas emissions by September 2025. quarterly figures.
Renewables displacing coal were part of the story, with more electric cars on the road, fueling the first drop in transport emissions since the COVID-19 pandemic.
The Minister said New Vehicle Efficiency Standards introduced early last year had led to a “tremendous” increase in the availability of electric cars for consumers.
To meet Australia’s target of 62-70 per cent emissions reductions by 2035, the Climate Change Authority says around 80 per cent of all new vehicle sales must be electric by the middle of the next decade.
Gavan McFadzean, climate program manager at the Australian Conservation Foundation, said the country was making progress but emissions cuts were not at the pace needed to meet climate targets.
“The latest figures show Australia’s emissions have been reduced by half the pace needed to meet our 2030 target, and only 35-40 per cent of the annual pace needed to reach the 2035 target range,” Mr McFadzean said.
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