Here’s something I reckon you don’t know.
The Climate Change Authority’s (CCA) original advice to the Australian government for a 2035 emissions target was between 65% to 75%. Yesterday it pulled that back to 62% to 70% (a target the government adopted). Energy analyst Dylan McConnell discovered one of the main reasons, buried in the documentation:
We have recommended a lower bound that makes allowance for the intrinsic uncertainty of our analysis and transition risks (e.g. strong data centre growth) … the rapid growth of artificial intelligence and data centres is driving significant increases in electricity demand, which in turn is contributing to higher emissions than anticipated, making a more ambitious target harder to meet.
As I previously wrote in Crikey, the growth of data centres in Australia is already having a material, physical effect on the pace of the energy transition. Total demand has been rising for half a decade now, and the proportion of that driven by data centres is itself growing.
But the CCA’s reasoning in their shift to a weaker climate target recommendation shows that this isn’t just impacting the present — it’s changing the future as well. This should be big news, but it won’t be. There is a weird lack of scrutiny of data centre growth in Australia. Part of the reason seems to be the influence of attitudes like those of Treasurer Jim Chalmers. In a recent piece for Guardian Australia, Chalmers wrote:
If some of the predictions prove correct, AI may be the most transformative technology in human history. At its best, it will convert energy into analysis, and more productivity into higher living standards.
Chalmers is careful to mention risks, such as job losses, disinformation and inequality from the use of machine learning systems. He also specifically cites strain on energy, water and resulting rising carbon emissions. But he dismisses that: “we are well placed to manage the risks and maximise the opportunities … our substantial agenda, from the capacity investment scheme to the Future Made in Australia plan, will be key to this.”
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If the CCA is having to ratchet down its national climate targets thanks in a substantial part to data centre growth, it demonstrates that Chalmer’s “substantial agenda” is nowhere near substantial enough for his vision to become realised without causing massive climate damage.
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The talking point — that data centres are barely a concern thanks to the painted picture of unlimited renewable energy growth — is one I’ve seen crop up globally, noticeably most often from the corporate sustainability reports of the major tech companies. It has the vague aura of lobbyist-speak: the aesthetics of good technology and solid morality but absolutely zero substance.
In the US, coalitions designed to lobby against regulations placed on data centres and machine learning systems are having enormous sway. Often this influence is hidden by a combination of NDAs and lack of government transparency, as outlined by Crikey’s reporting partners as part of the Invisible Hand of Big Tech investigation.
In Australia, the bulk of big tech’s lobbying efforts to date have been focused around information and users, such as their lobbying in the media bargaining code debate or teen social media ban. Recently, Chalmers’ great big business “roundtable” featured a massive coalition of lobby groups vaguely gesturing at the deregulation of data centre construction, reflective of similar hand-waving in the UK and the US.
However, Australia’s lobbyist register reveals that the major data centre companies have hired lobbyists to make their case to the government.
One business name pops up frequently: Tim Marshall Advisory (TMA, or “TM Advisory”). Marshall was a senior comms guy with former senator Stephen Conroy, and also worked at NBN Co. Representing AirTrunk, Amazon Web Services, CDC and NextDC, he’s a key player in how a significant coalition of data centre operators present themselves to the government, and to the public.
You can get a feel for the narrative in TMA’s recent work, as data centre lobbyists focus almost entirely on energy and infrastructure. A submission to the Australian Energy Markets Commission on behalf of those four clients highlights the economic benefits of data centre expansionism, while dismissing their growth as easily met by new renewable energy. There’s mention of the power purchasing agreements signed by data centre developers, but a notable absence of any clear data on why this doesn’t seem to be accelerating Australia’s renewable energy growth beyond its current crawl.
There’s also the claim that data centres can operate as flexible load — an increasingly popular promise, but one that’s rarely put in the context of the longer-term systemic impact of massive new loads.
In October 2024, the big four data centre companies (plus Microsoft) commissioned Mandala Partners to write up a report on the purported benefits of data centre growth for Australia. In that document, they rattle off a collection of power-purchasing agreement deals conducted by data centre companies in Australia. But all the deals cited add up to 530 megawatts. About 4,300 megawatts of renewables reached financial commitment in Australia in 2024.
It’s evocative of the analysis performed by Irish researcher Hannah Daly that showed only 16% of data centre growth in Ireland was paired with renewable power purchasing agreements. “Data centre demand grew six times faster than new projects financed by [corporate power purchasing agreements], and more than 15 times faster than electricity from all other sources — homes, vehicles, industry”.
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The goal of this early-stage and gently presented lobbying from data centre operators is to position themselves as a critical cog in Australian renewable energy growth without actually being a critical cog in Australia’s renewable energy growth. If their industry does begin to balloon at many times the rate of new clean energy, as it has elsewhere, we’ll see bared teeth and raised fur.
Ireland is a great example of what Australia’s near future might look like, once things become more entrenched. As the country’s data centre expansion sucked the grid dry, operators are scrambling to hook directly into dirty gas networks, desperate for tonnes of fossil methane to fuel their insatiable hunger. Amazon’s lobbying disclosures in Ireland are endless.
The head of Equinix’s Irish operations, Peter Lantry, sits on the climate committee of South Dublin County Council; a region awash with data centres. In America, Google has dropped the greenwashing ruse and is flipping overnight to full-scale MAGA madness. The utility supplying Meta’s massive custom fossil-fuelled power stations breezily dropped its near-term climate targets.
Both power utilities and AI companies love projecting massive steep lines of energy consumption for data centres into the near future, almost certain to never come true. But the acute effect of these forecasts is to trigger over-investment particularly in fossil fuel infrastructure, like gas pipelines and power stations. Jim Chalmers will only be able to on-sell the happy clean-tech tone being whispered into his ear for so long. Once the mood shifts, Australia will catch up with the rest of the world: a big tech industry that sees no problem in letting the world burn.
