How Amazon powers data centres responsibly, helping build Australia's smarter grid

As the country pursues its ambition to become a leading regional digital hub under Australia's National AI Plan, that investment is more important than ever. 

Today, data centres account for about 3 per cent of Australia's total electricity — significantly less than mining or manufacturing. Additionally, Federal Energy Minister Chris Bowen has said data centres can help deliver the country's 82% renewable energy target. We agree, and we're putting that into practice. 

Here are five ways Amazon is contributing to a smarter energy future for Australia: 

For more than a decade, Amazon Web Services (AWS) has improved power and energy efficiency across every layer of its cloud infrastructure — from the systems that power servers, to the techniques used to cool data centres, to the custom-designed chips built for customers. 
 
Custom silicon:  We design our own computer chips Our latest generation uses roughly a quarter less power for the same workload compared to traditional processors — and for AI training specifically, the efficiency gains are even bigger, cutting energy use by up to 75%. Companies like Anthropic, OpenAI, Uber, and Pinterest run on them. 

Network design: AWS redesigned how its data centres are wired internally, cutting networking hardware by 69% and boosting speed by 33%. Using less equipment means we draw less power and waste less energy moving data around. 

This is why AWS infrastructure is up to 4.1 times more energy-efficient than on-premises data centres. Instead of thousands of companies each running half-empty servers in their own offices, cloud computing brings everyone's work together onto shared infrastructure that runs at full capacity.  

For the energy we use in our data centre operations, we invest heavily in carbon-free energy. Since 2020, Amazon invested an estimated AU$2.8 billion in renewable energy projects across Australia.  

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In April 2026, Amazon announced its biggest renewable energy investment in Australia yet: nine new power purchase agreements (PPAs) adding 430 megawatts (MW) of carbon-free energy to the grid. Eight of the nine incorporated battery energy storage systems (BESS), including Amazon's first solar-battery hybrid projects in Australia and the first outside the United States.  
 
Since then, Amazon signed a second agreement for the Winton North solar-plus-storage project in northeast Victoria, a 130 MW solar farm now paired with a 70 MW battery on a single 256-hectare site. Amazon is buying 70MW of both the solar power and the battery storage from the same site — something only a handful of companies have done in Australia.  
 
Once operational, our 20 renewable energy projects in Australia will provide almost 1GW of new renewable capacity, enough to power the equivalent of over half a million households annually. 

According to BloombergNEF, Amazon was the largest corporate purchaser of carbon-free energy in Australia in 2025. We will continue investing in wind and solar to strengthen Australia's grid.  

Amazon recently signed an agreement for the Bairnsdale battery energy storage system (BESS), a 50 MW battery in East Gippsland, Victoria. It‘s a standalone battery, which means it isn't directly attached to a solar or wind farm. Instead, the battery is connected to the national grid, which means it can supply electricity to the grid when it’s needed, helping improve grid stability. This aligns with AEMO’s strategic vision for Australia’s grid – a system built around renewables and backed by storage.  
 
But how does it work? When solar and wind produces more electricity than the grid needs, typically mid-day, batteries store the surplus. When evening demand rises and that generation drops off, they release stored energy back into the grid, smoothing price spikes and keeping the lights on. Without batteries, excess renewable energy would simply go to waste.  
 
In 2025, an estimated 7.2 terawatt-hours of surplus wind and solar energy was generated in Australia. That's approximately enough electricity to power every home in New South Wales through the evening peak for an entire year, precisely when households need it most and when batteries would discharge. 
 
Amazon has invested in seven BESS projects in Victoria to date, bringing our total across Australia to 10 projects with a combined capacity of 368 MW once completed, equivalent of the power needed for more than 125,000 homes through the evening peak. The Bairnsdale BESS is Amazon's first standalone battery storage agreement globally and makes us the first non-energy company to offtake a standalone battery in Australia. 

When we build a data centre, we invest in a dedicated high-voltage electricity connection, separate from the lower-voltage lines that deliver power to homes and businesses. We plan this in close coordination with the local electricity provider, and pay for the infrastructure, such as substations, needed to support our operations. Our data centres connect at a level that avoids placing additional load on the local infrastructure communities depend on every day. 

In many cases, the infrastructure we fund is built with capacity beyond what we need today, because that is how the electricity system is designed to grow efficiently. Where this happens, the spare capacity we’ve paid for becomes available to support future growth in the broader community.  
 

An independent study from Frontier Economics found that Australia's market and regulatory frameworks are designed so data centres pay prices reflecting the actual costs they create, preventing those costs from being passed on to households.  

Data centres pay their own way onto the grid. At the local level, if standard charges don't cover the infrastructure a data centre needs, the operator pays upfront, preventing costs being shifted to everyday customers. At the transmission level, data centres cover the full cost of any infrastructure built for their connection, plus a larger share of network charges because they use more power at peak times. 
 
Earlier this year, the Australian Energy Regulator found that electricity charges for a typical residential customer on the Jemena network in Victoria would drop by an average of $38 a year compared to 2025–26. This is largely driven by growing demand from data centres, major new connections, and home electrification – all of which spread network costs across more users. The result: system-wide benefits that support, rather than increase, what Australian households pay. 
 
Read more about AWS Sustainability initiatives here.