Forecasts indicate Australia data center electricity demand will surge to 34 TWh, straining regional grid infrastructure.

Australia’s data centre electricity demand is projected to surge from approximately 5 TWh in 2025–26 to 34 TWh by 2035–36, driven by the rapid expansion of cloud and artificial intelligence infrastructure. According to the Australian Energy Market Operator (AEMO), this sharp increase will occur across the National Electricity Market as new data centre projects progressively connect to the grid.

These projections originate from AEMO’s 2026 Electricity Statement of Opportunities (ESOO), its annual ten-year assessment of electricity supply, demand, and reliability. The updated report refines AEMO’s forecasting methodology to better capture emerging data centre dynamics, including project attrition, the divergence between actual electricity consumption and approved connection capacity, and the gradual operational ramp-up of new facilities.

While the forecast points to a substantial development pipeline, it also underscores significant uncertainty. In 2026, network service providers reported 225 data centre projects at various stages of grid connection. However, approximately 36% of the projects listed in AEMO’s 2025 assessment have since been cancelled, including several that had already reached the “committed” stage—typically indicating a formal connection agreement was in place. Additionally, AEMO noted that some surviving projects have regressed to earlier stages in the connection process.

Data centre growth is a key driver of a wider national shift in power consumption. The ESOO overview anticipates total Australian electricity demand will rise by more than 40%, fueled by data centres, industrial development, household electrification, and electric vehicle adoption. This surge coincides with the scheduled retirement of approximately 15 GW of coal and gas generation capacity.

Despite these pressures, AEMO reports an improved near-term reliability outlook. This stability is supported by 9.1 GW of new generation and storage capacity connected during 2025–26, alongside a pipeline of roughly 40 GW of committed and anticipated projects. No reliability gaps are projected within the Retailer Reliability Obligation assessment period through 2030, though sustained investment will remain necessary later in the decade.

The trajectory signals that data centre electricity demand is rapidly becoming a central variable in national grid planning. By 2035–36, the sector could draw roughly seven times more grid electricity than it does today. For cloud computing, these figures underscore the tightening link between digital infrastructure expansion and energy-system investment. As Australia works to replace retiring thermal generation while maintaining grid reliability, the siting, interconnection timelines, and operational profiles of future data centres will grow increasingly critical to long-term energy planning.