Data Centres in Australia: Energy Grid 'Not Ready' for Massive Power Demands in Sydney and Melbourne
Australian Financial Review
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Details
- Date Published
- 5 Jan 2026
- Priority Score
- 2
- Australian
- Yes
- Created
- 6 Jan 2026, 07:15 am
Description
Huge power demands by data centres could force industrial businesses to wind back their operations, warns a top business group.
Summary
The escalating energy demands of data centres planned for Sydney and Melbourne may strain the current electrical grid infrastructure, potentially forcing industrial operations to scale back. The Australian Industry Group has raised concerns about the grid's capacity to handle this increased demand, which could lead to significant economic disruptions. This issue highlights the need for urgent governmental action to enhance infrastructure resilience against future demands. Although the article does not directly address AI safety or existential risks, the implications for infrastructure readiness in supporting AI technologies are significant.
Body
PolicyEnergy & ClimateAIPrint articleRyan CroppEnergy and climate reporterJan 5, 2026 – 7.00pmSaveLog in or Subscribe to save articleShareCopy linkCopiedEmailLinkedInTwitterFacebookCopy linkCopiedShare via...Gift this articleSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? LoginBig industrial firms could be forced to scale back their operations unless the government acts urgently to manage the huge energy demands of data centres slated to be built in Sydney and Melbourne over the next five years.Australian Industry Group, which sits on the customer councils of electricity transmission and distribution networks in NSW and Victoria, has warned the power grid is not ready for the projected growth in power demands for data centres, and the consequences could be severe for homes and businesses.Loading...Ryan Cropp is an energy and climate reporter at The Australian Financial Review based in the Canberra bureau.SaveLog in or Subscribe to save articleShareCopy linkCopiedEmailLinkedInTwitterFacebookCopy linkCopiedShare via...Gift this articleSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? LoginLicense articleFollow the topics, people and companies that matter to you.Find out moreRead MoreAIData centresEnergy transitionRenewablesChris BowenSydneyOpenAIInfrastructureFetching latest articlesThe 10 top AFR Magazine reads of 2025The untold story of the most lethal Sydney to Hobart race in 26 years24 new watches to ring out the year (from $170 to $218k)10 health hacks that keep these CEOs in shapeRachael BoltonThe 5 biggest corporate stuff-ups of 2025Leaders fail because they don’t understand one thing, says this CEOThe Sydney New Year’s Eve hotel suite that costs $500kLucy SladeThe top Life & Leisure reads of 2025Look sharp with a retro polo shirt and a limited-edition Tag HeuerCash cow: WA dairy booms thanks to billionaire Gina Rinehart’s backingMark WembridgeCan you beat our experts’ 21 predictions for 2026?Billionaire Lederer wins battle for control over $270m property fund