Australia's power grid limits push AI data centres to regional hubs

Transgrid warned that Western Sydney's transmission capacity will be "largely exhausted" beyond 2033 and urged developers to locate new AI data centres in regional zones such as the Hunter and Riverina. Australia currently hosts over 160 data centres, with 90 more in development and an expected doubling in the next four years, yet only 27 are in regional areas.

Energy Minister Chris Bowen said data‑centre projects should bring their own renewable energy, noting they could help make wind farms viable. Riverina MP Michael McCormack remarked, "Data centres are coming whether we like it or not," and called for projects to be sited near transmission lines with adequate water supplies and to deliver real jobs.

CDC Data Centres' chief strategy officer Jack Dan warned of "fly‑by‑night" speculative behaviour and urged stricter regulation on water and energy use. Major investors include Microsoft, which pledged $25 billion, and Amazon with $20 billion in Australian AI‑infrastructure projects. A government discussion paper indicates regulation is still being formulated.