A new warning from Australia's clean energy sector says data center growth could become an expensive problem for everyone else on the grid if new power supply does not keep pace.
The Smart Energy Council cautions that households could pay billions more if large new data center loads connect to the eastern states' electricity market before new renewable generation is built, according to PV Tech.
Here's what to know
The council's Oct. 26 analysis examines a scenario in which 5 gigawatts of new data center demand hits the National Electricity Market in July 2028 without matching new supply.
That would add an estimated AU$40 billion ($28 billion) in wholesale electricity costs across Australia's eastern states.
Those estimates cover New South Wales, Queensland, South Australia, and Victoria, and span the six years from 2029-30 to 2034-35.
The warning centers on timing — specifically, adding massive new electricity demand before new renewable energy supply is available.
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That is a business and planning decision likely to raise costs across the market.
More background
The modeled demand is large.
An extra 5GW is not a small change to the grid — it represents a major new block of electricity use entering the National Electricity Market in July 2028.
The projected cost pressures stretch across six financial years, not just for a brief spike.
The council is not saying data centers should not be built. It is warning that bringing them online before new renewable supply is ready could lift wholesale costs by AU$40 billion.
If planners and large power users get the sequencing wrong, customers who didn't make those decisions could still face the financial consequences.
What can be done?
The council's most specific fix is to align new data center demand with new electricity supply, rather than letting the load arrive first.
The key pressure point is how new projects enter the National Electricity Market starting in July 2028.
If major new loads are approved or energized before additional renewable capacity is built, the Smart Energy Council's identified cost risk becomes much harder to avoid.
The warning also points to large companies and power system decision-makers.
Residents across the four states in the analysis cannot control when a multi-gigawatt data center project plugs into the grid.
Where can I learn more?
The same tension is showing up elsewhere as data center growth runs into tight power supply. In these stories, utilities, regulators, and communities grapple with what happens when big new loads threaten to drive up everyone else's electricity costs.
• In Florida, Duke's proposed tariff could leave households on the hook for data center costs.
• In Pennsylvania, small businesses could end up subsidizing AI data centers through higher electricity charges.
• In Utah, lawmakers are asking whether power, water, and infrastructure costs outweigh data center benefits.
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