{"id":711859,"date":"2026-06-03T04:55:13","date_gmt":"2026-06-03T04:55:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/711859\/"},"modified":"2026-06-03T04:55:13","modified_gmt":"2026-06-03T04:55:13","slug":"how-much-water-and-power-will-ai-data-centres-use-in-australia-ironically-we-dont-have-the-data-to-know","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/711859\/","title":{"rendered":"How much water and power will AI data centres use in Australia? Ironically, we don\u2019t have the data to know"},"content":{"rendered":"

Australia\u2019s data centre rush now rivals the mining boom<\/a>. OpenAI chief executive Sam Altman last week<\/a> said Australia could become a \u201cdata centre capital of the world\u201d. <\/p>\n

This would come at an environmental cost. Water use is a common concern<\/a>. One report<\/a> estimates AI centres could use billions of litres of water a year. <\/p>\n

But what do the numbers say? Based on the value derived per megalitre, data centres look less threatening and more likely to be a highly economically productive use of water. <\/p>\n

The bigger problems are energy and location. As a new report<\/a> suggests, electricity demand from data centres could outstrip clean power from renewables and lead to new gas plants. <\/p>\n

Before committing fully, we need granular detail on how much water and energy these centres use. <\/p>\n

\"data<\/a><\/p>\n

New data centres are being built or proposed in cities such as Sydney at record rates.
\n Mick Tsikas\/AAP<\/a><\/p>\n

What value do we get from water?<\/p>\n

In the 2023\u201324 financial year, Australian industries consumed about<\/a> 17.6 million megalitres of water \u2013 about 30 times the water in Sydney Harbour. <\/p>\n

Of this, agriculture, forestry and fishing consumed about two-thirds of the total \u2013 nearly 11.8 million ML. This water was used to produce goods valued at<\/a> A$54.6 billion \u2013 roughly $4,600 for every megalitre consumed. <\/p>\n

Compare this to \u201cother industries<\/a>\u201d, the category covering data centres. A megalitre of water in this sector was valued at $2.3 million \u2013 500 times more value than if used on a farm. <\/p>\n

How much water do data centres use?<\/p>\n

We can only make a rough estimate on water use due to a lack of clear data. <\/p>\n

Research shows data centres need about 25ML<\/a> of water per megawatt of capacity. Australia has about 300 data centres<\/a> with about 1.3 gigawatts of operating capacity<\/a>. Using these figures, Australia\u2019s current data centres would use 15,000\u201335,000ML a year. That would be a fraction of 1% of the water used nationwide \u2013 close to a rounding error. <\/p>\n

There are three caveats. <\/p>\n

First, credible estimates of water use vary widely<\/a>. <\/p>\n

Second, most estimates \u2013 including this article \u2013 only count water used directly for cooling. Data centres can be remarkably frugal<\/a> with this water and getting more efficient. <\/p>\n

But data centres indirectly use substantially more<\/a> in the water used to produce the electricity powering them. Coal, gas and hydro plants all need water. <\/p>\n

Third, proposed new data centres are much, much larger than existing ones. Some are seeking between 5ML and 40ML a day<\/a>. <\/p>\n

Sydney is set for huge growth<\/a> in AI data centres. <\/p>\n

If all 41<\/a> in the pipeline or under assessment are built, they would directly use 15\u201320%<\/a> of Sydney\u2019s water supply within a decade. <\/p>\n

Sydney would bear the strain on water supplies in return for an upfront economic benefit from construction and some ongoing jobs. But the economy wide $116 billion boost to GDP<\/a> from AI adoption by all industries over the next ten years would be spread nationally. <\/p>\n

It would make sense to locate data centres where water is more abundant and cheaper.<\/p>\n

Energy is a bigger concern than water<\/p>\n

At present, data centres use just over 2%<\/a> of the electricity on the National Electricity Market. <\/p>\n

This would almost triple to 6% within four years, according to Australian Energy Market Operator forecasts<\/a>. The Clean Energy Finance Corporation<\/a> estimates the figure could be 11% within a decade. <\/p>\n

Energy use isn\u2019t inherently bad. What matters<\/a> is whether increasing demand will be met by renewables \u2013 or gas.<\/p>\n

\"aerial<\/a><\/p>\n

Data centres are hungry for energy. The question is how that demand will be met.
\n Westend61\/Getty<\/a><\/p>\n

We need better data \u2013 on data centres<\/p>\n

We can\u2019t manage what we don\u2019t measure. Data centres are a textbook example of a data gap impeding good policy. <\/p>\n

The Australian Bureau of Statistics rolls data centres<\/a> into a broader category. <\/p>\n

This means we can\u2019t access detailed statistics on how much water<\/a> or energy<\/a> data centres use. Nor how much they add to the national accounts<\/a>. <\/p>\n

The federal government has introduced new expectations<\/a> on water use and efficiency for data centre operators. That\u2019s something. But it\u2019s not the same as a national picture that fits with existing official statistics. Only one<\/a> data centre meets the new national water-efficiency rating. <\/p>\n

Surprisingly, Australia\u2019s National AI Plan<\/a> has little focus on water and energy. State and federal water ministers<\/a> have named data centres as an emerging threat to water security. A Senate inquiry<\/a> is in progress.<\/p>\n

We need to track water use better<\/p>\n

Australia\u2019s water accounts<\/a> measure how much water every industry uses. But they don\u2019t track how much water is lost to evaporation or value all water used. Water supply and sewerage are bundled together in even the most detailed view of the national accounts<\/a>, meaning neither can be seen clearly. <\/p>\n

So while data centres appear to be a high-value use of water, we can\u2019t confirm it. <\/p>\n

There are signs of change. Australia uses the international System of Environmental-Economic Accounting to track water use. This is being rewritten<\/a> now, in part to address these issues. The national accounts have also begun treating damage to nature as a cost of production. Both shifts matter, no longer treating the environment as free lunch. <\/p>\n

To finish the job, authorities will have to properly value all the water used by industries and disentangle data centre data from other industries. This would turn a noisy debate into a measurable one. <\/p>\n

Time to keep tabs on AI<\/p>\n

Based on the data we do have, we can say Australia\u2019s data centre boom is neither the water villain some fear nor the cost-free miracle its promoters describe. <\/p>\n

Instead, it looks like a high-value industry arriving at record speed which is relatively light on water use and fairly heavy on energy. <\/p>\n

With better data in hand, the numbers \u2013 not the headlines \u2013 should decide where the next megalitre and the next megawatt should go.<\/p>\n","protected":false},"excerpt":{"rendered":"Australia\u2019s data centre rush now rivals the mining boom. OpenAI chief executive Sam Altman last week said Australia…\n","protected":false},"author":2,"featured_media":711860,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-711859","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/711859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=711859"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/711859\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/711860"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=711859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=711859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=711859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}