New economic analysis released today by the Smart Energy Council warns that the rapid expansion of data centres could add hundreds of dollars a year to household power bills and drive up electricity costs by $40 billion over six years, unless strict safeguards require data centres to supply their own clean energy.
The analysis shows that adding an extra 5 gigawatts (GW) of data centre demand without dedicated, additional clean power and storage, will cannibalise existing grid supply, and drive up wholesale prices by as much as three quarters.
Across the National Electricity Market (NEM), everyday Australian households will face an estimated $9 billion hit to their domestic power bills between 2029-30 and 2034-35, with commercial users and manufacturers left to pick up most of the remaining $31 billion tab.
Queenslanders are set to be slugged the hardest if State Government plans to build new taxpayer funded coal-fired generators to power massive new data centres go ahead. Queensland carries about $20 billion of the modelled cost – half the national total.
Under the modelled scenario, a Queensland household on a standard bill would pay an extra $370 a year from 2029-30.
“That’s almost 20 per cent on top of Queenslanders’ current electricity bills, unless data centres are required to bring additional clean energy into the system,” Smart Energy Council Chief Executive David McElrea said.
Victoria and New South Wales face potential cost impacts of $9.1 billion and $8.9 billion respectively, followed by South Australia at $2.1 billion.
“Australians are rightly calling for governments to ensure they aren’t worse off,” Mr McElrea said.
“If foreign tech giants are allowed to plug straight into the existing grid without building dedicated new renewable generation and firming storage, ordinary families and local businesses will pay the price through sky-high power bills.”
The Smart Energy Council notes that Queensland Premier David Crisafulli has suggested new coal-fired generation could be built to meet new data centre demand. Likely taxpayer cost estimates for that new coal generation, from Green Energy Markets, are between $15-20b for a single data centre. Further, that alternative generation via gas would soak up around half the east coast’s annual use.
“Australians suffering through a cost-of-living crisis can’t be expected to foot the bill for tech companies and artificial intelligence infrastructure. Carve-outs and special passes to rely on coal-fired generation, such as the Crisafulli Government’s coal-fired computing ambitions in Queensland, would carry immense costs for consumers and the public purse,” Mr McElrea said.
“Equally reckless is the Federal Opposition and One Nation’s push for nuclear power: the slowest and most expensive form of energy available. Like coal and gas, it’ll take decades to build, doing nothing to solve the immediate supply crunch while locking in eye-watering costs for consumers.”
“Minister Bowen had it right at the Press Club: a national standard the states can build on but can’t water down. Every one of the Prime Minister’s commitments needs to be in the legislation, as a condition of connection, with no carve-out for state-owned coal.”
“The Albanese Government must act swiftly to ensure any company building energy-hungry computing facilities is legally mandated to bring its own 100% additional renewable energy and storage. The golden rule must be simple: you want power, you bring it. Households and businesses cannot pay the price.”
The modelling shows that without enforceable requirements for big tech to contract new wind, solar, and battery storage, surging data centre load will drive up wholesale market prices across four states.
The Smart Energy Council is calling on the Albanese Government to write mandatory ‘bring your own new clean energy’ standards for all major data centre developments into the legislation it is drafting as a condition of grid connection approval.
Media contact: editor@smartenergy.org.au I 0448 972 192
