Empowering Australia's Digital Future

Investment in Australian data centre capacity is empowering innovation, jobs, essential services and the clean energy transition

New investment in Australian data centre capacity is forecast to top $26 billion by 2030 to meet soaring digital demand driven by internet-connected devices, cloud computing and artificial intelligence, a new report commissioned by five of the country’s largest data centre operators has found.

Data centres are a crucial component of Australia's digital infrastructure, supporting everything from everyday internet use and streaming services to essential services like emergency response and disease surveillance.

These high-tech facilities efficiently centralise data processing and storage activities at scale to support cloud computing and enable the digital services Australians rely on daily, and increasingly help finance renewable energy projects.

The new Mandala report by found the number of internet-connected devices in Australian households is set to double by 2030, which coupled with business adoption of cloud and AI services, is driving the need for new data centre capacity.

Drawing directly on operator forecasts, it shows that data centre deployable capacity in Australia is projected to more than double from 1,350 megawatts (MW) in 2024 to 3,100 MW by 2030. This expansion will see a further $26 billion in infrastructure investment.

The report highlights the strategic importance of data centres as part of Australia’s digital infrastructure. The digital infrastructure ecosystem is a key foundation for digital capability, driving productivity, innovation and playing a crucial role in reaching the shared tech industry and Australian government goal of 1.2 million tech jobs in Australia by 2030.

With significant new development forecast, Australia’s data centre workforce is projected to grow by 8,300 to reach 17,900 by 2030, with particular opportunities for new ICT professional and skilled tech trade roles, such as electricians and mechanical engineers.

According to findings in the report, alongside AEMO’s 2024 Electricity Statement of Opportunities (ESOO), data centres consume about 1 per cent of Australia’s annual electricity usage (3 terawatt hours). For context, other activities such as metal manufacturing account for 14 per cent of electricity use.

The report found that without the aggregation of compute and storage in energy efficient, hyperscale data centres, Australian businesses would consume 67% more energy each year (approximately 2 terawatt hours), equivalent to the electricity that powers 280,000 Australian households.

Data centres are also catalysing Australia’s clean energy transition. Major data centre operators and their customers have committed to matching their power use with 100 per cent renewable energy by 2030. This is being driven by renewable energy Power Purchase Agreements (PPAs) which create investment certainty in renewable projects.

Of global renewable energy PPAs, 45 per cent involve data centre operators, demonstrating the valuable role data centres play in catalysing the energy transition.

Growth in data centre capacity could help bring online new renewable capacity equivalent to up to 5 per cent of the additional electricity generation capacity needed to meet Australia's 2030 target of 82 per cent renewable electricity.

To fully capture the opportunity, the report makes three key recommendations advocating collaboration between governments and industry to:

• Streamline planning and approval processes for development permits and power allocation to help Australia capitalise on the AI data centre growth opportunity, and create greater certainty for operators.
• Enable further investment and accelerate the construction of renewable energy projects, energy storage projects and transmission infrastructure to support digital infrastructure demand and transition to net zero.
• Prioritise workforce development and training to provide the skills for a robust data centre workforce, to strengthen Australia’s digital infrastructure capabilities.

Read the full report and fact sheet.