INTHEBLACK October 2026 - Magazine - Page 22
F E AT U R E
“Connectivity is the lifeblood of the modern economy. Online
banking, government services, cloud computing and consumer
platforms such as Netflix, Spotify and TikTok all depend on it.”
CRAIG SCROGGIE, NEXTDC
becoming a regional AI hub. “None of that
is possible without the underlying compute
infrastructure,” Whitelock says. “We also need
to talk more openly about jobs — Australia’s
data centre workforce needs to grow from
about 9600 today to 17,900 by 2030. That is
8300 new roles for electrical trades, HVAC,
network engineering, cybersecurity and
ICT professionals.”
More broadly, economies in the
Asia-Pacific region are set to reap the
benefits of data centres, with Deloitte
predicting that the region will become the
world’s next data-centre hub on the back
of about US$800 billion (A$1.14 trillion)
in data-centre investment by 2030. Scroggie
says the sector has shifted from merely being
part of a technology cycle to an industrial one.
“Electricity is the input and intelligence is
the output. For the economy, the opportunity
is productivity itself. Developed economies
have seen weak productivity growth for
a decade, and AI is one of the few
technologies capable of changing that.”
ENVIRONMENTAL CONCERNS
Amid the excitement around data centres,
the criticism is that they are highly
energy-intensive facilities that consume
significant amounts of electricity to power
servers and maintain cooling systems.
As AI workloads increase, there are fears
for electricity grids and the potential impact
on carbon emissions. Water consumption
is another issue — many facilities rely
on large volumes of water for cooling,
creating challenges in regions already facing
water scarcity or climate-related stress.
The Australian Conservation Foundation
(ACF) believes power- and water-hungry
data centres could derail Australia’s clean
energy transition unless they are properly
regulated. National climate policy adviser
at ACF, Annika Reynolds, says that while
22 INTHEBLACK October 2026
it remains difficult to sort fact from fiction
when it comes to the likely trajectory of AI
data-centre growth in coming decades,
Australian governments and regulators
are incorporating significant AI data-centre
uptake into energy planning. The ACF notes
that the Australian Energy Market Operator’s
Draft 2026 Integrated System Plan for the
national electricity market now expects data
centres to use up to 29 TWh of grid energy
by 2050, which is 90 per cent higher than
current consumption levels.
“This has profound implications for
the planned transition of Australia’s energy
system,” Reynolds says. “Without safeguards,
the data-centre industry could be used to
justify the extension of Australia’s coal power
clunkers and the building of new, expensive
and polluting gas power plants.”
Reynolds says ACF will continue to
advocate strongly to government that AI
data giants should be compelled to adhere to
BYOE — bring your own energy — principles.
Without strong conditions, it also contends
that AI data centres pose a serious risk to water
security in Australian regions and cities.
At NextDC, Scroggie concedes that data
centres consume significant energy.
“The question is not whether they consume
it. It is whether they create enough economic
and social value to justify it,” he argues.
“They do.”
Scroggie says data centres now consume
about 2 per cent of Australian electricity, or
3.9 TWh, rising to about 6 per cent by 2030.
While that is “significant”, Scroggie says
data centre operators “pay their own way”,
with A$3.1 billion having been invested
in the electricity grid since 2020, and an
extra A$7.2 billion committed to 2030.
CORPORATE RESPONSE
Given such environmental worries, corporate
leaders are facing a delicate balancing act.
