Report claims AI data centre boom threatens Australia's energy transition
A Greenpeace-commissioned report warns Australia’s AI-driven data center boom could demand 13% of the country’s total electricity by 2040, risking reliance on fossil fuels and delaying renewable energy transitions. The surge in demand—projected to grow over sixfold by 2040—threatens climate policies by outpacing renewable infrastructure development, with one proposed Sydney data center alone expected to emit 1.3 million tonnes of CO2-equivalent emissions by 2032.
A new report commissioned by Greenpeace Australia Pacific highlights how the rapid expansion of AI-powered data centers could derail Australia’s energy transition. According to the analysis, electricity demand from data centers may rise more than sixfold between 2024-25 and 2040, accounting for up to 13% of the nation’s total energy use under a high-growth scenario. This demand could surpass the energy needed for electrifying cars, homes, and businesses, according to projections from the Australian Energy Market Operator (AEMO). The report cites AEMO data showing data center demand in 2040 could increase over fivefold from its 2024 estimates, driven by AI’s need for massive computing power to train systems like chatbots and image generators. Greenpeace warns this surge risks forcing Australia to rely on coal and gas plants to fill gaps in renewable energy supply, undermining climate goals. Economic data supports the report’s findings, with Australian Bureau of Statistics figures showing data center-related spending grew over 60% in the September 2025 quarter, reaching $2.6 billion—a 140% increase from the previous year. One proposed facility in western Sydney, the Mamre Road Data Centre Campus, is expected to emit 1.3 million tonnes of CO2-equivalent emissions by 2032, comparable to all domestic flights in New South Wales in 2023. Greenpeace calls for a moratorium on new data centers until governments implement transparency measures, renewable energy sourcing requirements, and stricter approval processes. The environmental group argues the current pace of data center construction—funded by billions in investment—threatens to outstrip renewable energy expansion, delaying Australia’s transition away from fossil fuels. The report’s author, Ketan Joshi, emphasizes the need for policy intervention to align data center growth with climate targets. Without safeguards, the AI boom could reverse progress in phasing out coal and gas, according to Greenpeace’s head of climate and energy, Joe Rafalowicz.
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