Source : THE AGE NEWS
Microsoft, Google and Amazon are urging the Albanese government to speed up the delivery of energy-storage projects that can guarantee around-the-clock power for data centres, after the Coalition’s decisive election defeat shut the door on nuclear reactors.
A boom in the number of data centres – buildings filled with racks of servers that store and transmit data for everyday online tasks – looms as one of the next tests for Australia’s shift from coal to renewable energy because they require huge amounts of power to run and keep cool, meaning extra strain on the grid.
Data centres require large amounts of power to process information used in artificial intelligence.Credit: Bloomberg
As artificial intelligence applications become more widely used by the public and organisations, power usage to keep the data centres running continues to increase.
Microsoft, Google and Amazon are among a group of industrial power users and clean energy developers stepping up their calls for the federal government’s ambitious target of an 82 per cent renewable grid to be accompanied by another target: one aimed at fast-tracking projects with the capacity to store surplus power from the growing number of solar panels and wind turbines to cover the gaps when it’s not sunny or windy.
In a letter to Energy Minister Chris Bowen, the international group, known as the Long Duration Energy Storage Council, warns that a renewable grid is “only as strong as its ability to deliver power when and where it’s needed”.
“By embedding storage into the heart of the grid, Australia can move from variable renewable supply to 24/7 renewable energy on which communities and industries can rely across days, weeks and seasons,” said the letter, seen by this masthead.
Julia Souder, chief executive of the Long Duration Energy Storage Council.
Microsoft and other technology companies in the United States are increasingly turning to nuclear power to help secure the 24/7 electricity they need to ensure reliable supply for their new data centres while maintaining their net zero emissions targets.
Facebook and Instagram’s parent company, Meta, last week signed a 20-year deal to secure nuclear power to help meet surging demand for AI, and a United Nations report out last Thursday said electricity consumption by data centres increased by 12 per cent each year from 2017 to 2023, four times faster than global electricity growth.
However, companies’ procurement options in Australia will be more limited, confined largely to renewables and gas, backed up by batteries and diesel generators, after the Coalition’s pitch to build nuclear power stations failed to win over voters at the May 3 election.
So far, electric utilities and governments have sought to boost green energy storage mostly by deploying grid-scale lithium-ion batteries, which soak up surplus renewable power in the daytime and use it to plug gaps and stabilise the grid once the sun sets or during other periods of low wind and sunlight.
But lithium-ion batteries have their limits: those installed around the country today exhaust their stored energy within one to four hours of full output and are mainly used for urgent discharges to keep the grid stable.
The Long Duration Energy Storage Council recommends the introduction of a federal target for the deployment of 30 gigawatts of more powerful storage assets with durations of eight hours-plus by 2040. These could range from pumped hydroelectric dams, which pump water to an uphill reservoir and release it down to spin turbines when needed, to other innovative technologies that store energy as heat or in chemicals for later use.
“This sends a powerful investment signal and provides policy certainty that developers, manufacturers and investors need to scale up,” it said.
Julia Souder, the council’s chief executive, said data centre owners were looking for more diverse sources of supply to meet their goals for reliable and sustainable power.
“The customers like our data centres are saying, ‘We need to replace our back-up diesel generators,’” Souder said.
“If Australia is going to be a renewable superpower, we need to make sure we have around-the-clock power.”
Alongside Microsoft, Amazon and Google, other key members of the council include data centre operator Compass, clean energy infrastructure investor Quinbrook, and Anglo-Australian mining giant Rio Tinto, which is seeking to repower its carbon-heavy aluminium assets and remote mine sites with renewables and storage.
A spokesperson for Energy Minister Chris Bowen said long-duration storage would be critically important in Australia’s energy transition, “whether it’s batteries, pumped hydro or other innovative systems”.
The government’s flagship energy policy, the Capacity Investment Scheme, provides underwriting support for renewable energy generation projects only if they are also “dispatchable”, the spokesperson added. This means wind and solar farms must be paired with storage technologies to ensure they can provide power on demand.
Data centres in Australia are already significant power users, accounting for about 5 per cent of demand on the east coast electricity grid, according to analysts at Morgan Stanley. The investment bank forecasts the grid will be able to accommodate data centres’ expected increase to about 8 per cent by 2030.
However, the system will face more strain beyond that, it said, especially given most of the remaining coal-fired power plants are scheduled to close by the end of the 2030s.
