Data centres underpin public transport, banking, telecommunications, healthcare, and the electricity grid itself. They're essential infrastructure for a modern economy, yet most Australians don't think about them at all.
As data centres enter the public conversation, questions are being raised. Here's what the evidence says.
Data centres are not draining Australia's power supply
Data centres consume about 3 per cent of Australia's annual electricity, the same as the country's shopping centres and less than mining or manufacturing.
According to Mandala Partners, the data centre industry has invested $3.1 billion in grid infrastructure since 2020, with a further $7.2 billion forecast by 2030, including $1.1 billion in excess capacity that directly benefits surrounding communities.
As outlined in an independent report from Frontier Economics, commissioned by Amazon, data centres connect to the grid via dedicated high-voltage substations at the transmission level, separate from the local distribution network that delivers power to homes, shops, and hospitals. They do not compete with households for electricity.
For example, Amazon signs long-term contracts with renewable energy developers, providing wind and solar projects with a guaranteed revenue stream they need to get built. This is how new energy demand brings new supply online, helping keep wholesale prices stable rather than pushing them up.
Growing demand means growing supply
As the demand for AI and cloud services increases to help power Australia's digital future, so does the demand for energy needed to power data centres. But new demand doesn't mean less energy for everyone else.
According to Frontier Economics, more than 16 gigawatts (GW) of new energy capacity and storage has been added to the grid since 2020, with over 130 GW of additional capacity anticipated by 2035. Data centre operators are a major driver of that investment, signing long-term contracts with renewable energy developers.
In 2025, an estimated 7.2 terawatt-hours of surplus wind and solar energy went unused in Australia because there wasn't enough demand to absorb it. Investments in battery storage are critical to ensure less energy is wasted and to stabilize the grid.
Amazon has invested in 10 battery energy storage projects across Australia with a combined capacity of 368 megawatts (MW), including the new Bairnsdale battery in East Gippsland, Victoria. This new project is a standalone 50 MW battery connected directly to the national grid that can store surplus energy and dispatch it when the grid needs it most.
In April 2026, Amazon also announced nine new renewable energy agreements in Australia, adding 430 MW of new energy capacity, with eight of the nine pairing solar generation with battery storage. Once operational, Amazon's 20 renewable energy projects will provide nearly 1 GW of new energy capacity to the Australian grid, enough to power the equivalent of more than half a million Australian households every year.
Your electricity bill won't go up because of data centres
Australia's electricity market rules are specifically designed to prevent data centre costs from being passed on to households. Data centre providers pay for any new infrastructure needed to support their connection - poles, wires, and grid upgrades. And, if their regular charges don't cover those costs, then data centre providers are required to pay upfront. That's built into the rules, so those costs don't get passed on. This isn't just the case in Australia. A first-of-its-kind independent study conducted in the United States by research firm Energy and Environment Economics (E3) commissioned by Amazon, found that Amazon fully pays for its own electricity costs to power its data centres and those expenses aren't passed on to citizens.
The bottom line: data centres pay their way in Australia.
Data centres use very little water
Nationally, data centres use 5.5 gigalitres of potable water, approximately 0.04 per cent of Australia's total water use, or six times less than the country's public swimming pools, according to Mandala Partners.
At Amazon, our Australian data centres use no water for cooling for 95.5 per cent of the year. We use free-air cooling, drawing in outside air to cool servers directly. It's only during peak summer temperatures that we switch to evaporative cooling.
In 2025, our Sydney region recorded a Water Usage Effectiveness (WUE) of 0.10 litres per kilowatt-hour, and Melbourne just 0.06 L/kWh, compared to a global industry average of 0.84 L/kWh. That means our Australian data centres use up to 93 per cent less water than typical data centres to deliver the same computing power.
We're also prioritising recycled water. Our new data centre in western Melbourne will be Victoria's first to run on recycled water, supplied by Greater Western Water's Melton Recycled Water Plant. Globally, Amazon already operates 26 data centres on 100 per cent reclaimed water, with 130 more contracted worldwide, more than any other cloud provider.
Giving back more than we take
Amazon has a goal to become water positive in AWS direct operations globally by 2030, returning more water to communities and the environment than we use in our data centre direct operations. As of the end of 2025, we were 75 per cent of the way to that goal globally, returning three litres for every four we used.
In Australia, we've launched two water replenishment projects. The first, with Great Eastern Ranges, restored 54 hectares in the Buxton District of New South Wales, returning approximately 48.5 million litres to the Greater Sydney Water catchment in 2025. The second, with the Australian River Restoration Centre, is restoring 14.8 kilometres of the upper Coxs River in New South Wales and is expected to improve water quality and availability by nearly 400 million litres per year for millions of people in Greater Sydney.
Data centres create local economic value
From the outside, a data centre can look like a large buildings where not much happens. That leads to questions about their local contribution.
The reality is different. Data centres are high-value infrastructure that supports jobs directly and indirectly, during construction and operation. Directly through roles such as engineers, network specialists, security professionals, and skilled tradespeople including electricians and fibre-optic technicians, and indirectly through supply chain purchasing from local businesses. But the bigger story is what they enable: the digital services that Australian businesses, hospitals, schools, and governments rely on every day. Your banking app or your telehealth appointment, all of it runs through data centres. They're part of the foundational infrastructure underpinning Australia's economy.
Data centres are carefully planned
Data centre providers are subject to the same planning approvals as any other major development. They need to be located near the communities they serve because the milliseconds it takes for data to travel directly affect the reliability of digital services, from processing a payment to loading a webpage.
That means proximity to urban areas, reliable power supply, and high-quality fibre connectivity. Wherever possible, Amazon builds data centres in industrial parks or designated zones, while striving to be a good neighbour wherever we operate.
AWS data centres are engineered to be quiet
AWS has built a comprehensive Acoustic Program that designs out noise from the very first stage of site planning. Sound mitigation is embedded across the full facility lifecycle: site selection, building design, equipment placement, and ongoing operations.
We take many steps to achieve this, including, sound-dampening building materials and insulation; strategic placement of equipment away from property boundaries; and, acoustic enclosures and mufflers on mechanical systems.
We comply with local noise requirements, so equipment such as backup generators run infrequently, only during daytime testing windows, and only when necessary.
We engineer data centre facilities with our local communities in mind, from the ground up. Quiet is a design principle from day one.
A future built on facts
We work hard to be a good neighbour to the communities where we operate in Australia. When building our data centers, we design and develop with people, the environment, and the future in mind.
AWS has been building and operating data centres responsibly in Australia since 2012, and we continue to innovate across our operations to focus on efficiency.
As Australia builds the infrastructure to power its digital future, getting the facts right matters.
