Not your average energy user

Hey Reader, welcome to The Energy's weekly data newsletter. This week we explore data centres and the tricky task of forecasting their energy use.

Data centres: not your average energy user

How much energy will Australian data centres use by 2030?

This is the question AEMO is confronting as it adjusts its forecasting methodology, splitting out data centres as a unique customer segment independent from other large industrial loads.

It’s a move that has the support of distributor AusNet. It points out key differences with data centres that could surprise forecasters: data centres can typically get to investment decision stage faster than other industrial customers; data centre loads have an exponential rather than incremental growth trajectory; and networks are receiving connection enquiries for hyperscale data centres with ultimate loads of a size not seen before.

AusNet says it already has more than 10 GW of new transmission data centre connections in the pipeline, including those in early-stage development.

How much demand?

Morgan Stanley estimates Australia’s existing data centres use about 2% of total electricity demand, and this could go as high as 12% by 2030.

This is significantly higher than what AEMO is forecasting, and is based on the investment bank’s expectation of A$31-42 billion of data centre investment over the next 8 years, helping boost the bottom line of the energy companies serving data centres.

The data centre sector has not yet drawn negative attention over energy use in Australia, but it does have ambition to become one of the leading global players supporting the growth of AI.

Meanwhile, the current empire of AI, the US, is seeing a state-by-state crackdown on heavy energy-using data centres with measures ranging from recouping additional transmission costs to mandating public reporting of energy and water usage. It comes as states like Virginia see data centres consume up to 25% of electricity supply.

And that’s where forecasting becomes super critical - get it wrong and data centres could draw the ire of politicians.

Research from Harvard recently found secret contracts between US utilities and data centres could be transferring Big Tech’s energy costs to the public.

If the energy and tech sectors work more closely for good, however, there’s the potential for data centres to help the grid.

How much flexibility?

AEMO is considering the potential for demand flexibility of data centres, which are known for their 24/7 always-on promise.

Data centres today largely rely on diesel generators to help their bosses sleep at night in the event of a power outage.

The majority are located in cities - for low latency they generally need to be near the customers that use their services, but this might have to change if Australia’s data centre sector is to grow as anticipated without causing grid challenges post 2030.

Sydney hosts 92% of all the data centres located in NSW, and Melbourne hosts 96% of those located in Victoria, according to a report commissioned by Australia’s largest data centre operators.

Driving up energy efficiency to reduce costs has been their primary aim to date, but a recent study from researchers at Duke University posited the idea of curtailing data centres in the interests of load flexibility. We’ll have more on this soon!

Energy mix

With thanks to OnlyFacts

The NEM last week (22-28 April) vs. same week in 2024

Coal (Black): 41.3% (–1.9%)
Coal (Brown): 18.4% (+3.6%)
Solar (Rooftop): 10.7% (–0.4%)
Wind: 11.7% (–1.1%)
Solar (Utility): 8.6% (+1.1%)
Hydro: 6.1% (–0.5%)
Gas: 4.0% (–0.7%)
Bioenergy: 0.0% (–0.1%)

The SWIS last week (22-28 April) vs. same week in 2024

Coal (Black): 31.0% (+1.5%)
Solar (Rooftop): 19.2% (+0.8%)
Wind: 21.4% (–1.5%)
Solar (Utility): 1.8% (+0.5%)
Hydro: 0.0% (0.0%)
Gas: 26.5% (–1.1%)
Bioenergy: 0.3% (–0.1%)

Big batteries in the NEM

Charging: -114.6 GWh in April 2025
- +14% vs. previous month (Mar 25)
- +91% vs. previous year (Apr 24)
Discharging: 89.1 GWh in April 2025
- +21% vs. previous month (Mar 25)
- +84% vs. previous year (Apr 24)