Australian data centres will use seven times more power by 2036

Australian data centres will take 13% of the country’s main electricity market by 2035-36, up from 3% today. That is almost a sevenfold rise in a decade, according to the Australian Energy Market Operator. Keira Wright reported the forecast for Bloomberg.

The figure lands in AEMO’s annual Electricity Statement of Opportunities. The document is the operator’s read on whether supply will meet demand across the National Electricity Market over the coming decade, and it is the one utilities and governments plan against.

The number

Data centres will draw 34 terawatt hours a year from the National Electricity Market by 2035-36, on AEMO’s projection. The market operator published the forecast at a moment when the country is closing most of its old baseload.

Roughly 13 gigawatts of coal-fired plant will retire within the decade. Almost 2 gigawatts of gas generation will go with it.

Those two sets of numbers do not subtract from each other. The data centre forecast counts energy over a year, in terawatt hours. The retirements count capacity at a moment, in gigawatts. They describe different things.

Why data centres bother a grid operator

“Data centers are particularly influential because they operate relatively consistently throughout the day and across seasons, similar to large industrial loads,” AEMO said in its report.

That flatness is the problem. A steady draw presses on the system during the hours when everyone else has switched off. Those are the hours when the grid runs thinnest.

Most large loads follow a pattern a planner can anticipate. Factories run shifts, households cook dinner, air conditioning tracks the weather. A rack of accelerators does none of that.

What is being built

The outlook is not all strain. Generation and storage connections more than doubled last year’s record, and AEMO says that has improved the reliability picture.

Last year was already a high-water mark. Record clean energy additions eased blackout fears in August 2025, Bloomberg reported at the time. This year beat it.

About 9 gigawatts of new generation and storage reached full output in 2025-26. That is double the year before.

“A significant amount of new capacity is expected to be delivered between now and the early 2030s,” AEMO chief executive Daniel Westerman said in a statement. It will help “replace retiring generation and support growing electricity demand”, he said.

“Beyond 2030, the next wave of investment will be critical to maintaining reliability.”

A third of the pipeline vanished

Developers have since cancelled more than a third of the data centre projects AEMO listed last year, according to the report.

That is a useful correction to every capacity forecast in this sector, including this one. Announced projects and built projects are different populations.

It also cuts both ways. A pipeline that shrinks by a third in a year could shrink again, or it could refill faster than the wires arrive.

The money behind it

Commonwealth Bank of Australia estimates the country’s data centre buildout could reach A$150bn, about $108bn, by 2030.

Australia wants that investment. It is trying to capture the economic benefits of the buildout while limiting the strain on its grid and its water supplies, Bloomberg reported. That tension runs through the whole file.

Demand arrives faster than wires

A data centre can switch on long before the infrastructure to power it exists. The United States Studies Centre has put numbers on that mismatch for Australia.

The Clean Energy Finance Corporation has flagged what follows. Its report names bottlenecks, higher prices for consumers, and more reliance on fossil fuels than anyone planned for.

The politics is unresolved

The federal government is pushing to make new data centres run on renewable energy. Bloomberg reported that doubling down earlier this month. Some regional administrations object.

Anthony Albanese will use Wednesday’s national cabinet to reassure premiers about a new AI law, according to the Guardian. He will promise that federal approval rules complement state ones rather than override them.

The conservative governments of Queensland and the Northern Territory have been the loudest objectors. A climate expert told the paper Australia has “one shot to get the rules right”.

The argument is not new. Australia’s world-first data centre rules needed every state to agree, and two said no in July.

Some builders are going around the grid

Not every project waits for a connection. A gas-rich outback station could host a $28bn off-grid AI data centre. It would generate its own power rather than queue for someone else’s.

That solves the operator’s problem by removing the site from the operator’s system. It does not solve the emissions one.

Everyone else has the same fight

The pattern repeats wherever the buildout lands. An operator or a government looks at the connection queue, finds it larger than the wires, and reaches for a pause or an audit.

Texas called itself the epicentre of AI, then froze new connections pending an audit.

Scotland weighed a moratorium that would have frozen new datacentres and threatened the UK’s AI plan.

In Europe the constraint is queueing rather than politics, and it has pushed 63% of new capacity out of the five established markets.

What the forecast does not settle

AEMO has published a demand projection, not a build schedule. The 34 terawatt hours assumes a pipeline that has already lost a third of its projects once.

The report does not say which sites make it, who supplies their power, or what happens to the 13% share if the next wave of investment Westerman describes does not arrive.

Nor does it settle the question the premiers are arguing about on Wednesday, which is who gets to say yes to a data centre in the first place.