Greens win Senate inquiry into AI data centre energy use

A six-month Senate inquiry into the environmental and energy costs of AI data centres will begin hearings within weeks, after Greens senator Sarah Hanson-Young secured bipartisan backing for an investigation into a sector drawing $40 billion in investment with what she described as “lagging” regulatory oversight.

Senator Hanson-Young, who will chair the Environment and Communications References Committee probe, said Australia risked repeating the failures of social media regulation. “We cannot repeat the mistakes that were made in failing to regulate the social media platforms before they got too big,” she said in a statement on Wednesday. “Big tech is closing in on Australia and our AI regulations are lagging far behind. We cannot allow Australia to become a dumping ground for energy-hungry data centres without proper scrutiny or public accountability or consultation.”

Around 250 data centres already operate across the country. Their share of national grid electricity sits at 2 per cent but is forecast to reach 6 per cent by 2030, according to an SBS News analysis, a trajectory that has drawn warnings from the Australian Energy Market Operator about the pace of coal-plant retirement timelines. Data centres’ electricity consumption is growing faster than any other sector, SBS News reported, with the market operator flagging the added load as a material variable in its next Integrated System Plan.

The investment pipeline — $40 billion and growing — is led by US hyperscalers and specialist operators eyeing sites in western Sydney, Melbourne’s north and regional centres where land and grid access come cheaper. Communities in those areas have not welcomed the proposals. Councils and residents are pushing back over water consumption, noise and the loss of farmland, the Australian Financial Review reported on Wednesday.

Government AI deals also under scrutiny

Beyond energy and planning, the inquiry will examine federal government contracts for AI services and whether environmental approvals are adequate for the speed of development, InnovationAus.com reported. It lands while Canberra weighs broader reforms to the Environment Protection and Biodiversity Conservation Act — a decades-old statute that makes no explicit reference to data centre developments.

The committee expects to hold hearings in the capital and in regional centres directly affected by construction, with public submissions now open. Industry groups including the Australian Information Industry Association have said existing operators are among the most efficient globally, pointing to renewable power-purchase agreements signed by the major hyperscalers. A report is due by year’s end.