Electricity industry research has again confirmed the worst about Australia’s confused energy transition. The network companies that will be required to carry the electricity to supply data centres on the grid have been told that demand will be double the level of a widely adopted forecast from the Australian Energy Market Operator. The difference matters, but what matters more is what the high level of uncertainty says about our ability to plan our future energy needs with confidence.
The AEMO can argue it offered a wide range of possible futures. But it has been an unfortunate characteristic of the renewables transition that targets seldom match reality. This is true for costs as well as for when the promised new big generators of electricity will be available to use.
Our major institutions, including the AEMO, appear to be more concerned with telling the government what it wants to hear rather than what it needs to know. The obvious example is the fact that only programs that meet the government’s arbitrary targets and policy objectives are modelled. Taxpayers are given too little information about what the likely alternative costs for other technologies would be. These include nuclear and gas, as well as sticking longer with coal.
The rush to build data centres has complicated the calculations further. The AEMO admits data centre electricity use is growing quickly and will rise from about 2 per cent of National Electricity Market underlying demand today to close to 10 per cent by 2050. Data centres are typically high-load, steady users of power not well-suited to the intermittent nature of renewable energy. This affects generation, transmission, connection planning and reliability settings of the grid.
Transgrid, Australia’s largest electricity transmission company, has received new modelling for NSW and the ACT that suggests the energy-hungry AI and data centres may be a bigger drain on the grid than realised. The Transgrid-commissioned modelling backs the utility’s call for extra spending on network expansions after developers flooded the company with energy requests equivalent to double the state’s peak demand levels. Australia will soon have a choice. We can tell data centres they are not welcome because they cannot be accommodated on the grid. Or we can accept the new demand reality and open the options for data centres and power.
Queensland and the Northern Territory are showing the way with more gas and coal for longer, against obstructions from the federal government. But this should be only the beginning of a process to allow data centres to consider their own best options, on and off the grid, when it comes to power.
Electricity industry research has again confirmed the worst about Australia’s confused energy transition. The network companies that will be required to carry the electricity to supply data centres on the grid have been told that demand will be double the level of a widely adopted forecast from the Australian Energy Market Operator. The difference matters, but what matters more is what the high level of uncertainty says about our ability to plan our future energy needs with confidence.
The AEMO can argue it offered a wide range of possible futures. But it has been an unfortunate characteristic of the renewables transition that targets seldom match reality. This is true for costs as well as for when the promised new big generators of electricity will be available to use.
Our major institutions, including the AEMO, appear to be more concerned with telling the government what it wants to hear rather than what it needs to know. The obvious example is the fact that only programs that meet the government’s arbitrary targets and policy objectives are modelled. Taxpayers are given too little information about what the likely alternative costs for other technologies would be. These include nuclear and gas, as well as sticking longer with coal.
The rush to build data centres has complicated the calculations further. The AEMO admits data centre electricity use is growing quickly and will rise from about 2 per cent of National Electricity Market underlying demand today to close to 10 per cent by 2050. Data centres are typically high-load, steady users of power not well-suited to the intermittent nature of renewable energy. This affects generation, transmission, connection planning and reliability settings of the grid.
Transgrid, Australia’s largest electricity transmission company, has received new modelling for NSW and the ACT that suggests the energy-hungry AI and data centres may be a bigger drain on the grid than realised. The Transgrid-commissioned modelling backs the utility’s call for extra spending on network expansions after developers flooded the company with energy requests equivalent to double the state’s peak demand levels. Australia will soon have a choice. We can tell data centres they are not welcome because they cannot be accommodated on the grid. Or we can accept the new demand reality and open the options for data centres and power.
Queensland and the Northern Territory are showing the way with more gas and coal for longer, against obstructions from the federal government. But this should be only the beginning of a process to allow data centres to consider their own best options, on and off the grid, when it comes to power.