31 Aug 2026
The word ‘cloud’ sounds like a weightless, amorphous cumulus hovering above our heads. But our data consumption comes with a heavy responsibility. The cloud is tethered to the built environment. And that makes it our business.
Australia needs data centres. Our voracious appetite for all things AI is well documented. We are all using this technology. We can’t behave as though the infrastructure behind it is someone else’s problem.
And the impacts are landing in our own backyard: energy, water, backup generation, grid capacity, rare materials, waste, land, labour and community impact.
The Australian Energy Market Operator expects data centre electricity consumption to grow by seven-fold over the next decade from current levels of 5 terawatt hours (TWh) to around 34 TWh, and to grow from approximately 3% of operational demand to approximately 13%.
This is a staggering change in a very short period of time. As the politics of the past few weeks have made abundantly clear, Australia is now grappling with what this growth means.
Just this week, National Cabinet put these impacts on the national agenda, with First Ministers agreeing that large data centres bring “material energy, water and land-use impacts that need to be managed”. GBCA welcomes the Australian Government’s intention to introduce a nationally consistent regulatory framework in 2027, setting minimum requirements for large data centres, alongside mandatory standards.
The NSW Government also released its Data Centre Policy Framework this month. Again, we welcome the move. Its six principles underscore an important point: data centres can’t simply arrive, plug into the grid and turn on the taps. This framework expects data centres to meet world-class environmental standards, fund additional energy and water supply, impose no net cost on consumers and communities, contribute to local infrastructure, invest in future industries and build skills.
In other words, rapid growth comes with responsibilities.
These policy moves matter because certainty matters. Data centre developers need to know what Australia expects of them. Energy providers need to plan. Communities deserve to know what they are being asked to host and what they receive in return. And governments need confidence that an investment boom of this scale will spread the benefits and deliver long-term gains, without shifting the costs onto communities and the environment.
This is why GBCA is in this conversation. Respondents to our most recent annual member survey told us they want GBCA working actively on sustainability outcomes for data centres. So we are.
Earlier this year, we joined eight other leading built environment and sustainable finance organisations in the global Green Data Centres Coalition. Together, we are working towards credible sustainability criteria covering energy, carbon, water, waste, biodiversity and community impact. These will be launched in October.
Here at home, our Sustainable Data Centres Program, supported by Data Centres Australia, has established an expert industry working group that is developing Australia-specific guidance for better performance across the design, construction and operation of data centres.
We are being asked what this means in practice for us. There are a few possible directions, from guidance to benchmarks, to certification, but landing on any of them before we’ve properly defined the job would be getting ahead of ourselves. Right now, the priority is building the evidence and industry consensus around what best practice looks like in Australia. And we do need an Australian definition of best practice. Our climate, grid, water constraints and regulatory environment are distinctive. What works in Singapore or Mumbai won’t necessarily work in Sydney or Melbourne.
Industry engagement is essential. Green Star is a voluntary rating system that asks industry to aim higher than minimum standards. For that to work, industry has to be part of defining what ‘higher’ looks like.
Data centres can strengthen our sovereign capability, expand our digital industries and support the infrastructure our future economy will need. We need them. But their growth must work for Australia.
We will dig into all of this at our Sustainable Data Centres Forum in Sydney on 17 November.
There may be no cloud, but there is an enormous building program coming. The choices we make now will determine the footprint we leave behind.