Data centre influx applies pressure on AU emissions targets

As the AI revolution picks up more and more steam, there is very little doubt that demand for new data centres is going to significantly increase.

A country with heavily concentrated population centres, as well as vast open land that stretches for thousands of kilometres, Australia is going to keep grappling with this issue as tech and engineering firms size up locations around the nation for its data centres.

The federal government has spoken about aiming to become a leader in APAC, and the New South Wales government shares that sentiment, having recently made moves towards becoming a hub for tech companies to settle in.

But there is some consternation when it comes to the issue of new data centres, and not everyone is full steam ahead.

The Reserve Bank of Australia has warned increased investment could put pressure on interest rates and have inflationary consequences.

The battle for land in the country's most populous state will only heat up, with space needed for logistics operations, as well as more housing for NSW's fast-growing population, which is projected to climb to eight figures by 2041.

But the cold hard truth is NSW and Australia are going to need more of these hubs. Society's reliance on connected computing and AI is not going anywhere, and all that computing needs to be run on something.

The NSW government alone is in the midst of the approval process for $50 billion worth of data centre investment.

Huge banks of servers across the nation power everything from online games of EA Sports FC between friends, to AI prompts that help students with assignments, to myriad work use cases.

Government regulation will become more important as large firms set up shop in Australia's cities and regional towns, as the building or warehouse itself is only one part of the ecosystem around a data centre.

While tech giants Amazon Web Services and Microsoft have committed tens of billions to new developments, consideration must be given to the strain on resources these data centres will create, including gas networks, our electricity grid and water supply.

Server banks get extremely warm, requiring the use of large amounts of water for cooling.

Efficient transport links must also be utilised or created, and despite the influx of investment, there are question marks over where the funding for all the supporting infrastructure is going to be sourced.

"Because of our lifestyle, the work we do, everything we do, basically now relies heavily on these data centres. They are here to stay," said Chair Professor of Computer Science at Sydney University, Albert Zomaya.

"They are essential infrastructure. But essential doesn't mean impact-free.

"A data centre building is not just a building full of computers - it's a major industrial energy development with potentially lasting consequences for the community. 

"We do need data centres, but they shouldn't be poorly located or unnecessarily carbon-intensive."

A recent proposal by Sydney-based firm Cloud Carrier to build a monolithic gas-powered data centre in the picturesque Southern Highlands region was met with significant community pushback.

Denizens of affluent Moss Vale, located 90 minutes southwest of Sydney and home to a largely environmentally-focused community, have staged protests against the proposal.

Demonstrations were attended by hundreds of locals opposed to a massive server farm being built in their backyard, citing the environmental cost of burning fossil fuels as a major issue. 

Whether that local pushback will be enough to stop the project progressing is to be determined, but the community-organised demonstrations, and resulting mainstream media coverage, has brought more awareness to the issue.

While the federal government is still committed to its target of net zero emissions by 2050, many questions are going to be asked about how realistic that goal is.

In fact, not going green could result in a boost to the bottom line for well-resourced firms looking for land to build on, according to Senior Lecturer at Macquarie University Law School, David Birchall.

"The Southern Highlands (data centre) is particularly controversial because they're going to use gas-fired power plants there," Birchall said.

"AI data centres use enormous amounts of energy, and it seems lots of companies are finding that they can't use pure renewables, or it's more profitable not to use pure renewables.

"New fossil fuel power plants are coming online, and that's going to be really bad for net zero goals. The extra energy needed for data centres is going to make it really hard to achieve net zero, particularly if they're fossil fuel-powered."

The path forward will require plenty of government oversight as big players in the tech and engineering space eye up Australia for new data hubs. Whether or not promised emissions targets can still be hit remains to be seen, and appropriate land is still at a premium, especially in the nation's major cities and surrounding towns and suburbs.

The likes of Apple and Microsoft have deep pockets, and little affinity for spending more money than required. They're prepared for legal battles, should that be required.

While the efforts of a couple of hundred people with homemade signs in the Southern Highlands may not be enough to halt that proposed development, perhaps people power will have a role to play with more firms looking at Australia's land.