12 May 2026
The rapid deployment of new data centres to power artificial intelligence (AI) systems, such as chatbots and generative AI, has enormous and possibly damaging implications for energy systems and the climate.
Data centres house physical hardware that allows for enormous amounts of data to be transferred and stored. They require constant power and cooling, which leads to greater energy and water consumption.
NSW Greens MLC Abigail Boyd, who is chairing a NSW Parliamentary Inquiry into data centres, told the Green Left Show that 90 have already been approved and the NSW government is considering 22 more large-scale projects.
Boyd criticised the lack of long-term planning, saying the government is approaching it from a “project-by-project perspective”. She said corporate owners should be considered as an “extractive industry” because “they are using our data for their own profit and, in the process, taking huge amounts of water and energy and setting back efforts to decarbonise the economy”.
Ketan Joshi, a climate and energy analyst, told the Green Left Show that data centres raise demand for energy and incentivise more fossil-fuel generated power.
Data centres have led to a rise in greenhouse gas emissions and power prices, Joshi said. “Analysis by the Clean Energy Finance Corporation found that no matter whether data centres build their own renewable energy or not, there will be some increase in power prices.”
Boyd said most data centres are “not paying for the upkeep and improvements to the grid that all of us are paying in our power bills”.
Joshi said data centres often have their own onsite energy generation, usually diesel- or gas-powered. One planned facility in NSW, operated by Cloud Carrier, wants to construct a 700 megawatt gas-fired power station. “It’s very, very large.”
Boyd said that is the same size as the Kurri Kurri gas-fired power station: “That’s a massive amount of gas and emissions.”
Boyd said data centres are set to use up 11% of the state’s electricity and 20% of total Sydney water usage within five to 10 years. She said the Marsden Park Data Centre in Western Sydney — which will be the largest in the Southern Hemisphere — is set to use as much energy as 140,000 homes.
While some data centres are being constructed with renewable energy power, it is often only a small percentage of the centre’s overall energy use.