Australia can harness data centre boom to build green industries

• Australia should strategically locate major data centres where they can support renewable energy and create demand for emerging green industries
  

• Many AI data centres do not need to be located in major cities and could instead drive investment in regional infrastructure
  

• Data centre investment could create new demand for Australian green steel, aluminium and low-carbon cement

Australia should use the global data centre boom to drive investment in regional infrastructure,
renewable energy and green manufacturing, according to Beyond Zero Emissions (BZE).

In its submission to the Australian Government’s consultation on AI and data centre infrastructure, the
independent climate change solutions think tank says major new data centres should be planned
alongside Australia’s future energy and industrial needs.

BZE Chief Researcher Matt McKee said Australia had an opportunity to shape how billions of dollars of
new investment are directed and what it delivers for the country.

“Data centres need enormous amounts of power and infrastructure, but that also creates an
opportunity. If we properly coordinate where these facilities are sited, that investment can help build the
infrastructure and industries Australia needs for the future,” Mr McKee said.

“We shouldn’t simply let data centres compete for whatever spare grid capacity they can find. We
should be looking at where this demand can support new renewable generation, stronger regional
infrastructure and emerging Australian industries.”

BZE says many large AI facilities have considerably more flexibility about where they are located than
traditional data centres. AI training in particular does not need to be close to major population centres,
making regional areas with access to renewable generation, suitable land and grid infrastructure strong
candidates for future development.

BZE Research Officer Dr Fred Hiskens said the speed and scale of data centre development made
decisions about where they are built increasingly important.

“Data centres are moving quickly and looking for places with access to large amounts of power. But
grid capacity is limited in some parts of Australia, and many of the new industries we want to build will
need access to that same infrastructure,” Dr Hiskens said.

“We need to plan where the biggest data centres go so they don’t crowd out other industries. If we get
that planning right, their demand can instead help drive investment in the new renewable energy and
infrastructure that those regions will need.”

BZE is also calling for data centre investment to help create demand for Australian-made green
materials. Major facilities require large quantities of steel, aluminium and cement, while global
technology companies have already demonstrated a willingness to support lower-emissions materials.

“Data centres represent billions of dollars of investment and enormous purchasing power. Australia
should use some of that demand to help build markets for Australian green steel, aluminium and
low-carbon cement,” Mr McKee said.

“Done well, the data centre boom can be much more than a new source of electricity demand. It can
help Australia build the infrastructure, industries and regional economies we need for the future.”

BZE’s submission also recommends requirements for new renewable energy, fair allocation of network
costs, closed-loop cooling to minimise water use, workforce and apprenticeship commitments, and
stronger community benefit standards.

Read our explainer: How Australia can get data centre growth right

‍Read BZE's full submission: Australian Government consultation on AI training and infrastructure

‍Read our FAQ: What is the data centre REGO liability, and how does it work?

ENDS

Contact
Aimee Sanderson, Communications and Media Manager
0414 611 334
aimee.sanderson@bze.org.au