logo
AI data centres need round-the-clock energy and could be more power-hungry than we think

AI data centres need round-the-clock energy and could be more power-hungry than we think

Consider, for a moment, the year 2008.
Kevin Rudd was less than a year into his first, ill-fated prime ministership, Ricky Ponting was the captain of the Australian Test cricket side, and social media platform Facebook was sweeping the world by storm.
It was also a time of rising demand for electricity.
In fact, up until that time, demand for electricity had been rising steadily for as long as anyone could remember.
There was a basic equation that seemed to explain it — as the economy grew, so, too, did our need for power.
Merryn York, who was at the time working at Powerlink, the state-owned Queensland transmission company, says the equation was the bedrock of planning for the grid.
"Demand for electricity had always responded to economic conditions," Ms York says.
But then something unexpected, and unprecedented, happened.
That link between economic growth and electricity demand broke down.
Ms York, now the executive general manager of system design at the Australian Energy Market Operator, explains that electricity demand fell — and for a remarkably long time.
For more than 15 years, demand was subdued as appliances became more efficient, soaring prices made householders increasingly wary about using power and industry contracted.
Now, however, Australia's long march towards ever greater power needs has resumed.
And it's come back with a vengeance.
"We're really turning a corner," Ms York says.
Figures from AEMO show average demand for power in the national electricity market, which spans Australia's eastern seaboard, last year finally surpassed the previous high recorded way back in 2008.
In that time, the way demand for power is measured has changed.
Whereas once there was simply demand, it is now split between "operational" demand for power from the grid — excluding rooftop solar generation — and "underlying" demand.
On that, more relevant, score, demand in July last year was almost 26,000 megawatts, eclipsing the 25,738MW record set some 16 years ago.
In the first three months of this year, underlying demand rose 1.4 per cent compared with the previous corresponding period to a new record.
Ms York says the numbers are expected to get much higher in the years ahead.
"We are seeing significant growth and we're forecasting significant growth," she notes.
Much of the growth to date, and much of what's expected to come, is thanks to the effects of electrification — from cooking and transport to entire industrial processes.
"Electricity demand is now being driven by things like electrification, as people want to decarbonise their electricity usage," Ms York says.
"That's playing a role now and will play a stronger role going forward."
Indeed, AEMO noted in its most recent snapshot of the NEM that electrification was already having an effect.
It was one of the big factors behind the most recent rise in demand, even if the rate of uptake for things like electric vehicles has been slower than expected.
For all the implications of electrification, experts say there is another source of demand that looms even larger.
Matt Rennie, who co-owns and runs energy advisory firm Rennie, says our need for data has the potential to change everything.
"It is a big deal," Mr Rennie says.
Mr Rennie says Australia is on the cusp of what is likely to be a revolution in the way we use data and — more importantly — how much of it we use.
He says it's a revolution that is being driven by the migration of so many services — from education and games to healthcare and shopping — to the digital realm.
More ominously, he suggests the rise of artificial intelligence is another thing entirely.
In a world where AI becomes "pervasive", he says there is likely to be a step-change in demand power that will require round-the-clock supply.
"The thing about AI is that the algorithms that it uses are much more power-intensive," Mr Rennie says.
"So as these begin to pervade the way in which we do business and the way in which we plan and conduct our lives, we can expect that there'll be many more of these data centres specifically allocated to training AI systems and then to operate them after that.
"Beyond this point, I think we're going to see a different nature of data centre, a much more power-hungry data centre in Australia."
Mr Rennie says demand from data centres is already sneaking up and risking the assumptions used by AEMO to forecast electricity requirements.
He notes AEMO's official forecasts show there will be up to 1.5 gigawatts of new demand by 2035 in an "accelerated data centre scenario".
However, Mr Rennie says his firm's own research suggests demand will be far higher.
"Our research shows that that's something like 4.9 gigawatts — so two, three times what AEMO was forecasting," he says.
To put that in context, a large coal-fired power plant typically has about a gigawatt of capacity.
"One of the interesting things is that Jemena alone, one of the electricity networks in Victoria, has had connection applications for data centres of around 1.5 gigawatts by 2030, Mr Rennie said.
"And that's only for that one distributor in that one state.
One person at the bleeding edge of the debate is Alex Coates, the chief executive of data centre operator Interactive.
Ms Coates agrees Australia is on the threshold of a transformation as the twin forces of "radical digitisation" and AI combine to propel power demand higher.
She says both applications require huge amounts of extra computing power, or chips.
"That chip must reside somewhere," Ms Coates says.
"And of course, it must reside in a place that's secure and safe and reliable, and that's a data centre."
According to Ms Coates, there are already about 200 data centres in Australia.
Between them, she says, they use about 5 per cent of the power drawn from the grids in which they operate.
Much of the power is used to cool computer chips housed in the servers that make up data centres.
Ms Coates says significant efforts are being made to make cooling more efficient.
Interactive, for example, is exploring two different types of temperature control known as "liquid-to-chip" and "immersion" cooling to cut its electricity use.
Ultimately, however, she says data centres will need to find new sources of power from somewhere.
"By 2030, we're expecting double the capacity — another 175 facilities," Ms Coates says.
"We haven't seen anything like the demand that we will see over this coming period.
"In what that means and therefore what that then means for, again, the compute, the data centre provision and the power to the data centre."
For Ms Coates, America provides a useful, if cautionary, tale on what to expect.
In the US, demand for power from data centres — especially those connected to AI — has caught almost all forecasters off guard.
Celebrated American energy writer Daniel Yergin noted in an essay earlier this year that data centres alone could consume as much as 10 per cent of power in the US by 2030.
"One large tech company is opening a new data centre every three days," Mr Yergin wrote.
"Electricity consumption is already outpacing recent demand forecasts.
"PJM, which manages electricity transmission from Illinois to New Jersey, almost doubled its growth projection between 2022 and 2023 and is warning of the danger of shortfalls in electricity before the end of the decade.
Indeed, Ms Coates says a constant consideration for her business is not only how to secure power supplies, but how to secure them in a sustainable way.
At the moment, she says Interactive draws its power from the grid, meaning it is a mix of renewable and fossil fuel generation.
But she says the company is determined to eventually rely totally on clean energy and may sign deals with generators — so-called power purchase agreements — to do so.
"Certainly we will consider it," Ms Coates says.
"I certainly see it continuing as well."
For both Ms Coates and Mr Rennie, the coming surge in demand for power to meet our insatiable thirst for data is likely to arrive whether Australia is prepared or not.
Mr Rennie says that will almost certainly have consequences for Australia's electricity system, its renewable energy target and its emission goals.
"I mean, we're already concerned about the way in which demand will be met by supply," Mr Rennie says.
"We know that the Australian system is growing enormously in terms of demand.
"We know people are buying EVs. We know that these data centres are coming.
"But we also know that coal's coming out of the system, that renewables are taking a little longer than what we thought they would.
"Transmission is now three and a half years behind schedule on average.
"And the overblown role of batteries and solar in the forecast suggests to us that there will already be a gap between demand and supply, which is something that we're worried about.
"Adding more demand through data centres just takes that to a different level."
At AEMO, which is responsible for keeping on the lights in Australia's biggest electricity systems, Ms York is optimistic.
She says one of the virtues of forecasting is that it's a "repeat exercise", meaning whatever is missed or had changed in one year could be updated the next.
This was true generally, she says, and is no different when it comes to data centres and the ways they will affect Australia's grids.
To that end, she says AEMO has started treating demand forecasts for data centres much more seriously and is endeavouring to better understand the implications.
"Certainly, data centres is something we are specifically considering in our forecasting," Ms York says.
"It is quite challenging to know how much of that will turn up here in Australia and where it will be located.
"But it is something that we are very focused on making sure that we are well positioned to support data centres coming to Australia and being able to meet their needs.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Firehouse pub sale to raze the roof as long-time owner sounds siren for last drinks
Firehouse pub sale to raze the roof as long-time owner sounds siren for last drinks

The Age

time22 minutes ago

  • The Age

Firehouse pub sale to raze the roof as long-time owner sounds siren for last drinks

Motel Molly, at 2 Shepherd Street, is a boutique, near-beachfront accommodation hotel featuring 16 rooms. The previous owners, the Knox Group, opened the doors in the past few months of 2022 after a comprehensive refurbishment. In Sydney's eastern suburbs, the 42-room, six-storey boutique accommodation asset, UME Potts Point at 39A Elizabeth Bay Road, has been sold to Carpe Diem Partners, which recently bought the sister boutique site, UME Potts Point, for about $7.98 million. The private fund is run by former Goldman Sachs banker Simon Wheatley and will add to its growing portfolio, which has a focus on developing more assets in the burgeoning co-living property sector. The combined Mollymook and Potts Point sales were worth about $20 million. HTL Property's Andrew Jolliffe and Andrew Jackson advised on the sales, while Ray White Commercial also worked on the Potts Point deal. Ampol HQ Fuel refiner and retailer Ampol is raising cash through the sale of headquarters in the heart of Sydney's south with a price tag of about $100 million. The 9475-square-metre site at 29 Bourke Street, Alexandria, covers four levels with a six-year lease to the group. There is an architecturally designed atrium, advanced end-of-trip facilities and a six-star NABERS Energy rating. The Colliers team of Michael Crombie, Adam Woodward, James Mitchell and Gillian Kaplan are advising on the sale. Ampol is also selling a portfolio of 13 development sites around the country. Included is a mix of metropolitan and regional locations, spanning five states with sites ranging from 1265 sq m to 3073 sq m. Included are properties Tumbarumba, NSW, and Portland, Victoria. They are undeveloped and come with flexible zoning in many locations. The ASX-listed group told investors on Wednesday that its first-half earnings before interest and taxes were expected to total $400 million, compared with $502.1 million reported last year. It said tighter refining margins and a 6.1 per cent fall in first-half sales volumes during the period were partly offset by stronger sales in its convenience retail operations. The portfolio is being sold by Cushman & Wakefield's Queensland-based Daniel Cullinane. Area 53 deal Known as Area 53, the 6.5-hectare site dedicated to life science and innovations in Sydney's north has been bought by joint-venture partners Wentworth Capital and BlackRock for $200 million. The property at 5-11 and 14 Julius Avenue, North Ryde, was the former home to CSIRO for nearly 60 years and other government tenants and is located within the Macquarie Park Innovation district, which is home to medical/pharma businesses including AstraZeneca and Cochlear. It comprises 12,000 square meters of purpose-built laboratory space alongside 40,000 square meters of surplus developable land. There is a 95 per cent occupancy of which government tenants account for 70 per cent of rental income.

Firehouse pub sale to raze the roof as long-time owner sounds siren for last drinks
Firehouse pub sale to raze the roof as long-time owner sounds siren for last drinks

Sydney Morning Herald

time22 minutes ago

  • Sydney Morning Herald

Firehouse pub sale to raze the roof as long-time owner sounds siren for last drinks

Motel Molly, at 2 Shepherd Street, is a boutique, near-beachfront accommodation hotel featuring 16 rooms. The previous owners, the Knox Group, opened the doors in the past few months of 2022 after a comprehensive refurbishment. In Sydney's eastern suburbs, the 42-room, six-storey boutique accommodation asset, UME Potts Point at 39A Elizabeth Bay Road, has been sold to Carpe Diem Partners, which recently bought the sister boutique site, UME Potts Point, for about $7.98 million. The private fund is run by former Goldman Sachs banker Simon Wheatley and will add to its growing portfolio, which has a focus on developing more assets in the burgeoning co-living property sector. The combined Mollymook and Potts Point sales were worth about $20 million. HTL Property's Andrew Jolliffe and Andrew Jackson advised on the sales, while Ray White Commercial also worked on the Potts Point deal. Ampol HQ Fuel refiner and retailer Ampol is raising cash through the sale of headquarters in the heart of Sydney's south with a price tag of about $100 million. The 9475-square-metre site at 29 Bourke Street, Alexandria, covers four levels with a six-year lease to the group. There is an architecturally designed atrium, advanced end-of-trip facilities and a six-star NABERS Energy rating. The Colliers team of Michael Crombie, Adam Woodward, James Mitchell and Gillian Kaplan are advising on the sale. Ampol is also selling a portfolio of 13 development sites around the country. Included is a mix of metropolitan and regional locations, spanning five states with sites ranging from 1265 sq m to 3073 sq m. Included are properties Tumbarumba, NSW, and Portland, Victoria. They are undeveloped and come with flexible zoning in many locations. The ASX-listed group told investors on Wednesday that its first-half earnings before interest and taxes were expected to total $400 million, compared with $502.1 million reported last year. It said tighter refining margins and a 6.1 per cent fall in first-half sales volumes during the period were partly offset by stronger sales in its convenience retail operations. The portfolio is being sold by Cushman & Wakefield's Queensland-based Daniel Cullinane. Area 53 deal Known as Area 53, the 6.5-hectare site dedicated to life science and innovations in Sydney's north has been bought by joint-venture partners Wentworth Capital and BlackRock for $200 million. The property at 5-11 and 14 Julius Avenue, North Ryde, was the former home to CSIRO for nearly 60 years and other government tenants and is located within the Macquarie Park Innovation district, which is home to medical/pharma businesses including AstraZeneca and Cochlear. It comprises 12,000 square meters of purpose-built laboratory space alongside 40,000 square meters of surplus developable land. There is a 95 per cent occupancy of which government tenants account for 70 per cent of rental income.

John Hewson says we should sack the NACC
John Hewson says we should sack the NACC

ABC News

time6 hours ago

  • ABC News

John Hewson says we should sack the NACC

Former Liberal leader John Hewson says after two years the National Anti-Corruption Commission has failed in its mission to properly investigate allegations of systemic corruption. Hewson takes issue with the lack of action over things like procurement contracts and political pork-barrelling. He says we need an integrity commission which is prepared to have public meetings and that without that it can't be effective. GUEST: John Hewson, professor at the ANU Crawford School of Public Policy and former Liberal opposition leader. John Hewson, professor at the ANU Crawford School of Public Policy and former Liberal opposition leader. PRODUCER: Catherine Zengerer

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store