More than three-quarters of data centres set to be built around Australia’s biggest cities are at risk from stretched power grids and local opposition, threatening the country’s ambition to become an artificial intelligence (AI) hub for the Asia Pacific region.
Of the 40-plus large centres planned or under construction in Sydney and Melbourne – representing more than A$100 billion (US$70 billion or $90 billion) of projected investment – just 23% have confirmed publicly that they have secured electricity supply or grid connections, according to a Bloomberg review of company disclosure. Those agreements, a gauge of whether or not a project is advancing, suggest significant setbacks and potential delays.
Australia has bet heavily on a data-centre boom that is intended to capitalise on its vast open spaces as well as clean-energy potential. To date, though, most of the project pipeline is clustered around Sydney and Melbourne – where almost two in five of its inhabitants live – in order to harness existing fibre networks and reliable power. Those operations put more strain on already stretched infrastructure, and leave developers on a collision course with residents.
Transgrid have already confirmed power allocations in Sydney are exhausted until 2032. The consequences of friction and delays are already apparent. Operator NextDC Ltd slashed its profit forecast this week after Melbourne residents blocked the installation of towering transmission lines, almost halving the value of its shares.
