‘Completely unprepared’: Warning over Australia’s AI data centre ‘frenzy’Australia’s “reckless” data centre boom is demanding a massive surge in electricity, an alarming new report has warned, with experts calling for an urgent moratorium.Brielle Burns5 min readMay 27, 2026 - 12:46PMAustralia’s “frenzied” AI data centre boom will put a massive demand on the nation’s energy over the next 15 years, with one proposed centre set to generate emissions equivalent to over half a million petrol cars, an alarming new report has found.The report, commissioned by Greenpeace Australia Pacific and an independent expert, found the rollout of power-hungry data centres needed to sustain AI will derail the country’s transition to renewable energy, with experts calling for an urgent moratorium on new centres. “Australia is completely unprepared for the magnitude of impacts of the AI-driven data centre frenzy,” said Joe Rafalowicz, Head of Climate and Energy at Greenpeace Australia Pacific. “Data centres are being rolled out at a feverish pace, with some of the largest planned for Australia consuming as much energy as Adelaide.”The report is calling for an urgent moratorium on new AI data centres. Picture: iStockThe report said Australian Energy Market Operator data shows data centres will double in their proportion of total energy demand by 2040, growing from three to six per cent of the country’s total energy use in a low growth scenario. In a high-growth scenario, the demand for energy will surge six and a half times, soaring from two to 13 per cent of the country’s total energy use by 2040.Others you may likenewsnewsThis is more than the total load from electric vehicles or all electrification of connected households.Australia’s biggest proposed data centre, the 1GW Mamre Road Data Centre Campus in Western Sydney, will generate 1.3 million tonnes of CO2-equivalent greenhouse gas emissions in 2032.At its peak, the emissions from the centre will be equivalent to 560,000 petrol cars, or all domestic flights within NSW in 2023, the report said.In a high-growth scenario, data centres will grow to 13 per cent of total demand in 2040 – more than the total for residential electrification, the report found. Picture: iStockThe report said data centres are already failing to cover their own demand with additional renewable energy.“Impatience is not a virtue. The reckless data centre buildout is heaping massive new load onto the grid, meaning renewables have to run harder just to stay in the same spot,” said the report’s independent author and climate expert Ketan Joshi.“Currently data centres increase coal and gas output and delay shutdowns, while plugging polluting gas into data centres does the damage directly instead. “Unless the data centre industry builds no new fossil fuels and far more new renewables than new demand, we end up worse off.”The report recognised the surge in data centre-related spending in Australia, which has become the second-largest destination for data centre investments behind only the US. It cited Australian Bureau of Statistics data showing spending rose over 60 per cent to a record high of $2.6 billion in the September 2025 quarter – over 140 per cent higher than the previous year. Construction for NextDC's dedicated AI data centre on the Sunshine Coast. News Corp AustraliaThe report called for a moratorium on the approval and construction of new data centres in the country until “clearly defined, enforceable regulations” are put in place. “We should all be concerned by the extreme lack of scrutiny being applied to the companies leading the data centre charge in Australia and their proposals. Without strong, legislated standards, we risk replicating the disastrous US pattern, where Big Tech corporations have carte blanche to drain energy and water, and build new, polluting gas and diesel-powered plants to fuel their operations,” said Mr Rafalowicz.“Australia is not a playground for Big Tech corporations. It is time our leaders stepped up and took seriously their role as custodians of our resources and protectors of our society and environment.”Australia has seen a surge in data centre-related spending. Picture: iStockAI data centres could ‘jeopardise’ NSW’s net-zero targetIt comes after NSW Environment Minister Penny Sharpe was told “uncontrolled” AI data centres could jeopardise the state’s net-zero target at a budget estimate hearing earlier this year. During the February hearing, Ms Sharpe was repeatedly questioned over the state’s emissions targets, admitting the latest modelling forecast NSW would only reach about 40-46 per cent reductions by 2030, well below the legislated target of 70 per cent below pre-2005 levels by that year.When asked whether she had been advised “that uncontrolled data centre growth could jeopardise NSW’s legislated 2035 emissions target”, Ms Sharpe replied simply: “Yes.”The state energy minister also admitted she was “worried” that data centres used to drive AI would increase the cost of electricity.“One of the key things I worry about every day is the impact of prices on households and businesses,” she told the hearing.“When it comes to energy, there is no doubt that increased demand from data centres could significantly put pressure on prices.”Minister for Climate Change Penny Sharpe during Budget Estimates in NSW state parliament. Picture: NewsWireThe inquiry was told that the wholesale price was directly affected by demand, and that as a result, all increased demand had the potential to impact prices.Proposed data centres could lead to an additional 12 per cent demand on the energy sector, the hearing was told.Ms Sharpe said there was “a risk” of increasing prices, but that the state government was exploring how data centres may connect to the grid and the energy mix.Mounting concerns Last week, Sydney Water repeated its forecast that data centres could use up to one quarter of all water used across the network by 2035.“Our forecasts do reflect applications that are coming in that are planning to go ahead, and there’s clearly uncertainty when we get towards that 10-year time frame,” Sydney Water managing director Darren Cleary said at the third hearing of the NSW government’s data centre inquiry on Friday. “We have a large new industry developing in the west or in greater Sydney that will add a significant new demand to our system.”Sydney Water said data centres could use up to one quarter of the city’s drinking water by 2035. Picture: iStockDuring the hearing, the Lane Cove Responsible Planning Group also expressed concerns about planning regulations and called for a moratorium, with member Paul Trainor saying there are plans for six data centres to be built in the Lower North Shore suburb, including one within 20 metres of homes and 160m from a school. “Governments around the world are already recognising impacts of hyperscale data centre clustering. New South Wales must not be left playing regulatory catch-up,” he said. “If data centres are truly critical infrastructure, they must be planned to a far higher standard and not cluster beside homes, beside schools, beside recreation areas without enforceable statewide planning rules and cumulative impact assessments.”The inquiry is set to continue this Friday. Growing US concerns The warnings in Australia come as environmental activist Erin Brockovich has highlighted growing concerns over AI data centres in the US – where tech giants are investing billions of dollars on infrastructure in a race for AI dominance. The legal clerk launched a website this week showing the locations of 33 operational and 44 under-construction AI data centres, as well as over 2,700 locations where Americans have raised concerns. Erin Brockovich has launched an AI Data Center Reporting website with a map of US data centres. Picture: Brockovich AI Data Center Reporting“The RACE to build AI infrastructures is unfolding town by town across America,” Ms Brockovich said in a statement on the website. “In some places, data centers are welcomed. In others, they are delayed, contested or abandoned altogether. This MAP captures the real-world footprint of that race — revealing patterns of growth, conflict and uncertainty.”More CoverageBig issue with new AI road camerasEmma KirkChina’s new plan to bypass US dominanceAFPCommunity complaints include high energy consumption and its impact on the environment, high water usage required for cooling systems, environmental waste from cooling systems and generators, and the strain on local resources and infrastructure.“These challenges highlight the need for sustainable, secure, and efficient AI data center practices,” the website states. – With NCA NewsWireMore related storiesAustralian Economy‘Five per cent’: Odds of June rate hike plungesMoney markets have virtually ruled out the Reserve Bank hiking rates again in June after inflation dipped in April, but it won’t be a long-term reprieve.Read moreInterest RatesRate hikes loom despite slowing inflationGovernment fuel excise cuts may have delivered a short-term inflation reprieve but there are still fears the Reserve Bank could raise interest rates again.Read moreAustralian Economy‘Not what we said’: PM pushes back on budgetAs the backlash against the Federal Government’s capital gains tax changes continues, Anthony Albanese says carve-outs are on the table.Read more