Fears big tech plants’ voracious appetite will drain grid
Tech giants will be forced by the Albanian government to build their own renewable energy sources to power electricity-hungry data centers being built in Australia to fuel the AI boom.
Data centers, massive facilities that store computers used for artificial intelligence and cloud storage, are at the center of the federal government’s new AI policy; This policy opts for a laissez-faire model, abandoning burdensome regulations originally sought by unions as Labor aims to boost its moribund productivity rate.
As Australia prepares to impose the world’s first social media ban on children, with hefty fines for companies that fail to comply, its National Artificial Intelligence plan will not include any new laws to regulate the emerging technology, as this byline predicted in August.
Instead, a $30 million security institute will be created to advise on the need for new laws on a case-by-case basis, after Treasurer Jim Chalmers and others within the government opposed any restrictions on the AI boom. The Productivity Commission estimates it will be worth $200 billion within a decade.
“This plan focuses on seizing the economic opportunities of AI, sharing its benefits broadly and keeping Australians safe as the technology advances,” Industry Minister Tim Ayres said, risking a backlash from safety advocates who worry AI will cause the same kind of social harm that social media did before the government began cracking down on big tech.
“AI will help close gaps in essential services, improve education and employment outcomes, and create good-paying jobs.”
Nations around the world are racing to secure data centers, aiming for technological and geopolitical supremacy, even as communities dispute how much power and water they use.
A report by property consultancy Knight Frank has revealed Australia ranks second globally for data center investment in 2024. The doubling of investment in data centers in the September quarter spurred the biggest increase in business investment in four years, highlighting the role the facilities can play in boosting national output.
But data centers use large amounts of energy to power banks of computers and water to stabilize temperatures. The energy market operator said in August that data centers could need 12 percent of the energy produced by the national grid in 2050. They are currently using 3 percent.
Australia’s transit network is already under serious pressure, according to sources who declined to speak publicly until the plans are finalized; That’s why the Labor cabinet is considering options to pressure tech firms such as Amazon and Microsoft to link local investments in data centers with corresponding investments in renewable resources. The government wants companies to undertake large wind and solar energy projects or produce their own batteries on-site.
A senior government source said many firms building data centers were also investing in energy, but the ventures needed major project status to facilitate approvals.
“Our expectation is that many of these projects will bring additional power to the grid,” they said.
Labor is keen to accelerate the energy transition to meet climate targets, but the rollout of renewables has been delayed by bureaucracy, local protests and financial constraints.
While the Climate Change Authority recommends reducing emissions by 62 to 70 percent by 2035, it cited the high energy demands of data centers as a significant risk. This range was adopted by Climate Change and Energy Minister Chris Bowen, whom the opposition labeled a part-time minister after he took over as COP climate summit negotiating chair despite losing the right to host Türkiye.
Matt Kean, the authority’s chairman and former NSW Liberal government treasurer, said technology firms should build their own batteries and other manufacturing and storage facilities. “This is what households do to get the lowest-cost electricity available,” he said in this byline.
One reason the government wants tech giants to create their own energy sources is that other nations with limited electricity and water resources have faced a backlash against building data centers, similar to the resistance to wind farms.
Data centers are blamed for water shortages in Mexico, and more than 20 percent of Ireland’s electricity is used by data centers. South Africa’s routinely disrupted power grid is being further augmented by data centres, and similar concerns have been voiced in Britain, India, the Netherlands and Spain. according to a New York Times investigation.
More than 15 data centers worth $97 billion have been blocked or delayed in the US in recent years.
At least 16 data center projects worth a total of $64 billion have been blocked or delayed as opposition to the developments grows, according to a new study by Data Center Watch, a grassroots group that tracks the development of data centers.
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Paul Sakkal is Chief Political Correspondent. It has previously covered Victorian politics and won the Walkley and Quill awards. Reach him securely on Signal @paulsakkal.14Connect with: excitement or email.
