Back to Headlines
Business
Jun 21, 2026
Analyzed by GPT OSS 120B

Thirsty and Power‑Hungry: Australia’s Datacentre Boom Raises Energy and Water Concerns

AI Summary
Australia is witnessing a rapid expansion of hyperscale datacentres, with a $155 bn investment pipeline and projects like the 52‑hectare Mamre Road site. Experts warn the surge could push electricity use on the east coast above 10 % by the mid‑2030s and raise wholesale power prices, while water demand and limited job creation add to the controversy.

Lead: Massive hyperscale plans ignite a power‑and‑water debate

Australia’s datacentre sector is entering a "boom" phase, highlighted by the proposed 52‑hectare Mamre Road complex in Sydney’s western suburbs. While the project promises to be one of the world’s largest hyperscale facilities, critics question whether the nation can sustainably supply the required electricity and water.

Scale of the Mamre Road hyperscale project and national pipeline

  • Mamre Road site: six four‑storey buildings, 40 m tall, 936 cooling units and 852 diesel backup generators.
  • Estimated $155 bn investment pipeline for Australian datacentres over the next decade.
  • Current landscape: about 160 operational datacentres and 90 proposals, according to the Climate Council.

Financial and resource metrics driving the boom

  • Datacentres now account for 2.8 % of electricity consumption on Australia’s east coast.
  • Projected rise to 7 % by 2030 and > 10 % by the mid‑2030s.
  • The Climate Council warns wholesale electricity prices could be 20 % higher by 2035 if additional renewable capacity is not secured.
  • Cooling systems consume large volumes of water; evaporative cooling is essential to prevent server overheating.
  • Job creation is modest: thousands during construction but only a few hundred permanent operational staff.

Environmental and economic implications for Australia

  • Power demand: The Mamre Road centre would out‑consume the Tomago aluminium smelter, the nation’s single biggest energy user.
  • Water stress: High evaporative cooling needs compete with agricultural and municipal water supplies, especially in drought‑prone regions.
  • Land use: Large tracts are required near urban areas, raising concerns about proximity to residential zones.
  • Economic argument: Pro‑growth voices like Pat Bustamante (Westpac) argue the boom fuels foreign direct investment and future productivity gains, likening it to the PC revolution of the 1990s.
  • Policy tension: Experts such as Alex Hooper (Oxford Economics Australia) and Beth Webster (Melbourne University) stress the need for clear rules on energy, water and site selection to avoid the pitfalls seen in the United States.

Outlook: policy choices and market forces shaping the next decade

Whether Australia can harness the datacentre boom as a catalyst for sustainable growth hinges on three factors: securing enough renewable energy to offset rising demand, implementing water‑efficiency standards for cooling, and designing a regulatory framework that balances economic benefits with community and environmental safeguards. If these conditions are met, the sector could become a cornerstone of the nation’s digital economy; if not, the power‑hungry expansion may exacerbate energy costs and environmental strain.