MELBOURNE, AUSTRALIA / RankWire.AI / – The primary electricity network in Australia is expected to experience a dramatic surge in demand driven by rapid growth in data centre infrastructure. The Australian Energy Market Operator reports that there are now 225 data centre projects in the connection pipeline, a significant rise from 97 projects just a year prior. Currently, approximately 165 data centres operate within the National Electricity Market, consuming nearly 5 terawatt hours annually—roughly 3% of the total market consumption.
AEMO predicts that electricity use by data centres will increase to around 34 TWh by 2035-36, elevating their share of the National Electricity Market’s consumption to approximately 13%. The operator’s high-growth scenario projects demand reaching nearly 52 TWh during the same period. The National Electricity Market, which encompasses eastern and southern Australia, does not include Western Australia or the Northern Territory. These latest figures highlight how swiftly large-scale data processing facilities have become key contributors to new grid load.
Over the next decade, total electricity consumption across the market is also anticipated to rise substantially. AEMO forecasts annual usage climbing from roughly 176 TWh in 2025-26 to about 250 TWh by 2035-36, representing an increase of over 40%. Alongside the expansion of data centres, this growth is fueled by increased electrification across households, industries, and businesses. The projected 34 TWh demand from data centres now nears the combined electricity consumption of households in New South Wales and Victoria.
Growing Data Centre Load Adds Strain Amid Aging Power Plants
Australia’s electricity grid must accommodate this demand growth while scheduled plant closures reduce existing capacity. Over the next decade, approximately 15 gigawatts of coal and gas generation are set to retire. Meanwhile, new generation and storage facilities are coming online. During 2025-26, around 9.1 GW of new capacity connected, setting a record for annual additions. AEMO also lists roughly 40 GW of committed and anticipated generation and storage projects slated for completion by the early 2030s.
The most recent reliability assessment indicates no forecasted reliability shortfalls before 2030 under AEMO’s central outlook. This optimistic outlook attributes the stability to increased investments in generation, storage, and transmission infrastructure. It emphasizes the importance of project timelines, especially as older power stations retire. Reliability gaps signal potential future supply issues but do not predict blackouts. AEMO continues to monitor demand growth alongside the evolving generation mix across the market.
Government Initiatives Address Energy and Grid Expenses
The federal government has introduced proposed national standards aimed at large data centres, covering aspects such as electricity supply, grid expenses, and water efficiency. These standards would obligate major facilities to support new power sources and share connection costs. They also include requirements for large operators to reduce consumption when necessary to maintain grid stability. Measures to improve water efficiency are also part of the proposal. Legislation supporting these standards is targeted for early 2027, as data centre electricity demands become increasingly significant in national energy planning.
Additionally, the Australian Energy Market Commission has put forward recommendations for new requirements for large data centres connecting to the grid. The proposals advocate for cleaner, more reliable electricity supplies and greater flexibility in power consumption. The commission’s suggestions also address market registration, infrastructure costs, and the impact of large new loads on existing consumers. These proposals complement AEMO’s updated demand outlook. Together, the official assessments reveal that the pipeline of data centres has more than doubled, while electricity consumption within Australia’s primary power market continues to grow.