Submission to the Environment and Communications References Committee

Australian Industry Group strongly supports the growth of data centres in Australia. These facilities are essential infrastructure for the digital economy  and  provide the foundational infrastructure that will support the continued growth of digital services, AI, advanced manufacturing, biotechnology, scientific research and the broader innovation economy. They also position Australia at the cutting edge of technological adoption.

At the same time, the pace and scale of proposed data centre development create genuine challenges that require urgent policy attention. The Australian Energy Market Operator has at least 5.4 gigawatts of new data center pro jects formally requesting connection, including 1.3 gigawatts currently being implemented. Perhaps another 5 gigawatts of proposals are regarded by electricity networks as serious, and at least another 10 gigawatts of more speculative projects have made connection inquiries. If only a substantial fraction of the firmest slice of that pipeline is realised, the National Electricity Market faces demand growth of a magnitude not seen in decades. Without
coordinated action, this risks pricing out existing industrial energy users, delaying the retirement of coal-fired generation, and degrading overall system reliability.

Meeting our energy, water, land use and skills challenges at the same time is achievable, but only if the right strategy and policy frameworks are in place.