Climate Council Warns of Increased Pollution
The Climate Council has warned that the rapid expansion of data centres in Australia could lead to a 26% increase in power prices and heightened climate pollution if not managed sustainably. The report, released on 2nd June 2026, highlights the potential risks associated with the growing demand for digital infrastructure.
Australia is currently a global hotspot for data centre investment, trailing only the USA with 162 operational centres and over 90 projects in development. The report titled 'Clouded Future: Managing Risks of the Data Centre Boom' stresses the need for intervention to align this growth with renewable energy goals.
Unchecked growth could result in a 23% rise in electricity prices in Victoria by 2035 if demand is met by gas rather than renewable sources. the energy demand from data centres is expected to triple by 2030, equating to the total power use of all Victorian homes.
Without intervention, climate pollution from the main electricity grid could increase by 14% by 2035. This scenario underlines the necessity of aligning data centre growth with clean energy expansion.
Call for Government Action
The Climate Council's CEO Amanda McKenzie stated, "Australia is navigating a dual boom: a critical switch to a clean energy system and a historic surge in digital infrastructure. To protect the Australia of tomorrow, our governments must act today."
The report also warns of a tripling in water demand by 2030, with data centres requesting connections for up to 40 million litres per day. This comes as Australia faces a hotter and drier climate.
According to Associate Professor Joel Gilmore, a Climate Councillor and energy expert, "How we manage this industry will shape our energy system and climate for decades to come. Done poorly, data centres threaten to derail our switch to clean energy."
The Climate Council emphasises the need for new data centres to match their energy load with renewables and storage solutions. This alignment is crucial to prevent surging costs and emissions, thereby safeguarding Australian households and businesses.
Proactive government action is required to ensure that data centre expansion supports the transition to a clean, reliable, and affordable energy system. This approach will protect Australians from potential price hikes and environmental impacts.
