Australia's data centre investment to exceed $26bn by 2030

A new report has forecast that investment in Australian data centre capacity is set to exceed AUD $26 billion by 2030, driven by increasing demand for digital services and technologies.

The report, titled "Empowering Australia's Digital Future" and commissioned by major data centre operators, highlights the critical role of data centres in supporting digital infrastructure across diverse sectors. Data centres are essential for processing and storing data, which supports cloud computing, essential services such as emergency response, and drives the digital services used daily by Australians.

Analysis within the report indicates that the number of internet-connected devices in Australian households is expected to double by the end of the decade. This trend, coupled with increased business adoption of cloud and AI services, underscores the need for expanded data centre capacity. Forecasts suggest that deployable data centre capacity in Australia will more than double from 1,350 megawatts in 2024 to 3,100 megawatts by 2030, prompting substantial new infrastructure investments.

The report also addresses the strategic importance of data centres as part of Australia's digital framework, a foundation crucial to driving productivity, fostering innovation, and achieving the Australian government's target of 1.2 million tech jobs by 2030. To this end, the data centre workforce is anticipated to increase by 8,300, reaching 17,900 by 2030, with growing opportunities in ICT professional roles and skilled trades.

Mandala Partners, Tom McMahon, Partner, stated: "Australia can become a leading global player in data centres, which will unlock Australia's future digital success. At the same time, globally and in Australia, data centres are playing a role in underwriting renewable energy projects that will help to meet Australia's renewable energy goals. Our research shows there are workforce and infrastructure challenges that, if addressed collaboratively, could create thousands of jobs, while making power usage more efficient because there is less need for companies to have on-premise servers."

Renewable energy is a significant aspect of the overall data centre growth strategy. The report finds that data centres consume about 1 per cent of Australia's annual electricity, positioning them as key players in the clean energy transition. The aggregation of data processing in energy-efficient data centres is set to avoid a 67 per cent increase in energy consumption by eliminating the need for on-premise servers, equating to savings of approximately 2 terawatt hours annually.

Robin Khuda, Founder & CEO of AirTrunk, remarked: "The rapid expansion of Australia's thriving data centre market highlights the relentless growth of digital services and their importance to the everyday function of business, government and households across the country. With its abundant renewable energy and commitment to accelerating the energy transition, Australia can be at the forefront of the development of sustainable data centres to enable the digital economy."

Carly Wishart, Director of Data Centre Planning and Delivery Asia Pacific at AWS, commented: "Having invested more than $9.1 billion into the local economy since 2012, with a further $13.2 billion planned by 2027, we see tremendous potential for sustainable, digital, and AI-led economic growth for the country. This requires continuous investment in digital infrastructure and workforce skills, a focus on more renewable energy projects, and deep collaboration between private companies, the Australian Government, and the utility sector to ensure Australia drives productivity and is a hub for global innovation and growth."

CDC CEO Greg Boorer added: "Sustainable, resilient and highly efficient data centre capacity is the foundation of the entire digital ecosystem. Data centres are the critical infrastructure powering and securing the progress of our nation. From AI and cloud to quantum, classical and supercomputers powering essential services, research and national security, our nation relies on data centres. We take this role very seriously and we invest billions of dollars in the Australian economy to ensure that services people expect are there when needed."

Sarah Carney, CTO of Microsoft ANZ, underscored the importance of developing workforce skills: "Australia's cloud and AI-enabled economy is powered by a broad digital infrastructure ecosystem that has data centres at its heart. It is critical we focus on developing the skills and capabilities needed to build the data centres of the future, while ensuring they are exemplars of sustainable development that further Australia's leadership in the renewable energy space."

Craig Scroggie, CEO of NEXTDC, emphasised the centrality of data centres to innovation: "Data centres are vital to enabling Australia's critical digital infrastructure and it's impossible to imagine how we would continue to innovate and drive the nation's digital economy without them. As AI marks the next big technology shift, there will be an ever-increasing demand for data centres and in turn a greater focus on energy efficiency to ensure the required processing capacity to deliver the requirements of AI in the most sustainable way possible."