Technology

Rapid expansion of Australian data centres sparks concerns over energy and water resources

Billions of dollars are flowing into new computing infrastructure, prompting community pushback and planned federal regulations.

Updated Sep 3, 2026 · 20:20 UTC1 reports

The short version

Australia has 162 operating data centres with 90 more planned, driven by an estimated A$155 billion in investments to support artificial intelligence and digital services.
Communities and environmental groups are voicing alarm over noise, power grid strain, potential utility price increases, and high water consumption.
Prime Minister Anthony Albanese announced legislation planned for 2027 to mandate power underwriting and water restrictions for new large-scale facilities, though existing and under-construction sites will be exempt.

Australia currently operates 162 data centres, with 90 additional facilities planned and more than A$155 billion in anticipated investment.[BBC News]
The Australian Energy Market Operator projects that nationwide data centre power demand could triple by 2030.[BBC News]
Sydney Water estimated that data centres could consume up to 25% of Sydney's drinking water supply by 2035.[BBC News]
Federal legislation slated for 2027 will require new large-scale data centres to underwrite power supplies and limit water usage, but will exempt projects already built or currently under construction.[BBC News]
Residents and local officials in suburbs such as Lane Cove have reported noise disruptions and warned about the displacement of local industrial businesses.[BBC News]

Whether future private investments in data centres will accelerate renewable energy adoption or drive continued reliance on fossil-fuel power sources such as gas and diesel.[BBC News]
The long-term net impact on employment, as operational facilities require significantly fewer on-site staff than during the initial construction phase.[BBC News]