Artificial intelligence has reshaped Australia’s economy and energy systems, putting pressure on the nation’s power infrastructure.
A global analysis from McKinsey & Company found 88 per cent of organisations now use AI in at least one business function, up from 78 per cent a year before, signalling that artificial intelligence has become common in business operations.
However, only about a third of organisations have successfully scaled AI across their business, revealing a widening gap between experimentation and practical transformation.
That uneven transition has become visible in Australia’s labour market, with reporting from the Australian Financial Review highlighting growing concern over AI-linked restructuring across administration, customer support and entry-level white-collar work.
Assistant Minister for Science, Technology and Digital Economy, Dr Andrew Charlton said global investment in data centres is accelerating.
“Australia is well placed to lead, but it must happen on terms that benefit the community and deliver the national interest,” he said
Estimates from the Commissioner of Jobs and Skills Australia, Barney Glover suggest up to 4 per cent of the national workforce could face displacement as AI systems automate routine cognitive tasks, while hiring slowdowns are already affecting younger workers entering exposed industries.
But the infrastructure powering this transformation is creating another challenge: energy demand.
A Greenpeace-commissioned analysis reported by the ABC titled ‘ENERGY VAMPIRES: THE AI DATA CENTRES DRAINING AUSTRALIA’ has warned that electricity consumption from Australian data centres could increase more than sixfold between 2024 and 2040, rising from 2 per cent to as much as 13 per cent of national electricity demand.
Researchers say generative AI systems require continuous high-performance computing for training and operation, rapidly increasing pressure on energy networks.
The report argues data centres could soon rival housing electrification and electric vehicles as one of Australia’s largest emerging sources of electricity demand.
Climate Change and Energy at the Australian Industry Group Director, Tennant Reed said data centre expansion could benefit Australia’s energy system.
“Energy demand from data centres could, if managed well, increase utilisation of existing underutilised electricity network assets, offer grid support and underpin new clean investment,” he said.
However, Mr Reed has warned that data centre demand needed to managed efficiently.
“If data centre demand is managed poorly, it could outstrip supply growth,” he said.
Mr Reed said that there was a risk of driving up wholesale electricity prices, extending the life of coal-fired generators and requiring costly network upgrades.
He said the challenge is no longer whether AI will reshape the economy but whether its benefits can be balanced against rising social and environmental costs.
