Graham Readfearn Environment and climate correspondent 

Datacentres should be forced to invest in wind and solar energy, all states agree – except Queensland

State and federal energy ministers say investments in new renewable energy and storage should ‘fully offset’ new datacentres’ energy needs
  
  

The power needs of datacentres, like this one in Sydney, should be fully offset by renewable energy, most state ministers agreed.
The power needs of datacentres, like this one in Sydney, should be fully offset by renewable energy, most state ministers agreed. Photograph: Steven Markham/AAP

Power hungry datacentres that are growing to meet the demands of artificial intelligence could be forced to invest in enough new solar and wind generation to completely cover their electricity needs.

State and federal energy ministers agreed at a meeting last week that datacentres across the country should “fully offset” their electricity demand through investments in new renewable generation and energy storage.

The push, backed by all ministers except Queensland’s, also said datacentres should provide “demand flexibility services” – steps that allow a datacentre to control the amount of electricity being drawn from the network.

There is growing opposition to the boom in large datacentres, in particular where they are being built in residential areas.

As well as requiring large amounts of electricity, the centres will also put pressure on water supplies for cooling.

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At the energy and climate change ministerial council meeting, the Australian Energy Market Commission (AEMC) was also asked to advise ministers by July on ways to implement their calls to manage the electricity needs of datacentres.

The federal energy minister, Chris Bowen, said datacentres were one of the biggest drivers of new energy demand and ministers wanted “to make them an asset to the energy grid, not a strain”.

He said: “If datacentres want to benefit from Australia’s energy grid, we think they should do their bit to strengthen it – and it’s clear that the overwhelming majority of states agree.”

Queensland’s energy minister, David Janetzki, who is also the state’s treasurer, said: “Queensland’s continued commitment is to affordability and reliability as the foundation of our energy system and that means we expect to see details on costs, benefits, and risks before agreeing to any national proposal that impacts Queensland’s energy system and Queenslanders’ electricity bills.

“Further work is needed before imposing underdeveloped national proposals to advance other policy objectives and I look forward to considering [Australian Energy regulator] and AEMC advice which is expected to be completed later this year.”

In March, the government released a set of “expectations” on datacentres that said they should support the country’s transition to renewable energy, use water sustainably and support the national interest.

Data from peak body Data Centres Australia says the country’s 162 datacentres currently have an operational capacity of 1.4 gigawatts that is expected to more than double to 3.2GW by 2030.

The Australian Energy Market Operator forecasts a tripling in the amount of electricity used by datacentres by 2030. AEMO says datacentres currently use about 2% of the main east coast market’s electricity.

The chief executive of Data Centres Australia, Belinda Dennett, said it was “unclear” how the federal government’s expectations would be considered when states assess proposals.

“Any policy uncertainty creates investment risk,” she said.

“Datacentre operators and their customers are already supporting Australia’s energy system and are catalysts for the energy transition, offsetting 70% of their energy use through signing long-term off-take agreements with renewable energy projects and through free-market large generation certificates.

“There is a strong ambition to offset 100% of energy use, however that requires the availability of viable renewable energy projects.”

Research commissioned by the group suggests the industry invested $3.1bn, between 2020 and 2025, on energy infrastructure, with a further $7.2bn expected by 2030.

 

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