As society becomes more reliant on digital technology, the demand for storage and network bases to deal with transferring vast amounts of data is growing.
For most, data is stored in the “cloud”, but this metaphor masks a far more resource-intensive and, in its aggregate impact, insidious physical reality.
The huge tracts of data that make up everything from music streaming platforms to complex artificial intelligence systems must be housed in physical hardware.
This includes millions of Hard Disk Drives and Solid State Drives integrated into servers and massive storage arrays. A “data centre” refers to when these physical systems are grouped together and housed in a single location.
A data centre requires constant power, extensive cooling and complex networking to guarantee 24/7 access. This leads to massive and increasing energy and water consumption, which then contributes to greenhouse gas emissions. It also places substantial stress on local utility infrastructure and climate commitments.
Given that demand is growing, the corporate class in Australia is fighting for a monopoly. According to ABC economics correspondent Michael Janda, business spending on new data centres was a substantial contributor to the 2% growth recorded in the July–September quarter, with business spending on machinery and equipment ramping up by 7.6%.
The corporate class — driven by a search for high-return investments and the imperative to compete globally — has found its new “bubble” in data centres, which are rapidly being geared toward AI.
More than 260 data centres are already established across Australia, with dozens more in the pipeline. These currently consume about 2% of the national electricity grid — about 4 terawatts (TWh).
The Australian Energy Market Operator expects that to rise to 6% by 2030 and 12% by 2050. Of this, about 60% powers the servers themselves, while the rest powers cooling systems and other infrastructure.
This is driving a substantial rise in energy consumption, particularly in Gadigal/Sydney and Naarm/Melbourne. Data centres consume 11% of power in NSW and 8% in Victoria.
By 2035, data centres could consume 21.4TWh, just shy of the annual energy consumption of Australia’s four aluminium smelters.
Globally, data centres account for about 1.5% of all electricity use, but this is projected to double by 2030, driven almost entirely by energy-hungry generative AI. About 80% of data centre growth is in the United States and China, but there are hubs in South-east Asia, particularly Singapore and southern Malaysia.
This global demand is growing four times faster than other economic sectors, making the development of huge hyperscale facilities, often known as data campuses, increasingly common; each one consumes power comparable to that of 100,000 households.
While major tech players like OpenAI — the company behind AI chatbot ChatGPT — are investing, the Victorian government has committed $5.5 million in a bid to establish the state as Australia’s “data centre capital”.
OpenAI is the primary tenant in a $7 billion data centre being built in Western Sydney, set to be the largest in the southern hemisphere.
While this will primarily be used to serve OpenAI’s Australian clients, including Commonwealth Bank, Wesfarmers, Fortescue, Atlassian and Virgin Australia, OpenAI CSO Jason Kwon is pushing Labor to remove copyright rules that prevent AI companies from training chatbots on peoples’ data without permission.
The rapid development of data centres carries profound consequences for national infrastructure and climate goals.
Oslo-based climate analyst Ketan Joshi told the Guardian that data centres are increasing the country’s reliance on coal and gas energy generation.
Instead of new renewables displacing fossil fuels, news demands are being made for fossil energy to power the centres. “It’s like running harder just to stay in the same spot because the treadmill is getting quicker,” Joshi said.
Carbon emissions from data centres currently account for about 1% of global emissions and are set to rise.
SunCable is pushing for an AI data centre precinct in the Northern Territory to increase demand for the massive solar farm it has proposed for the territory.
University of New South Wales energy systems researcher Dr Dylan McConnell said the rising demand could make the renewables transition “very difficult, if not impossible”.
Data centres also put immense pressure on water resources, which they need to manage the massive heat generated by the equipment.
The Australian Financial Review quoted Water Services Association of Australia calling for governments to adopt clear water efficiency and water recycling rules for data centres, “if they are to capture the economic opportunities of artificial intelligence without losing the trust of the broader community”.
Some data centres request as much as 40 million litres of water a day for their cooling systems, the equivalent amount of use by 80,000 households.
Industry minister Tim Ayres said Labor would set out its data centre policy in early next year. Given Labor’s performance in government, it is unlikely to challenge the rent-seeking billionaire class’ search for another investment bubble, nor the fossil fuel corporations’ push to expand coal and gas.