AEMO forecasts data centres will use 34TWh a year by 2035–36, up from about 5TWh
AEMO's 2026 Electricity Statement of Opportunities projects data centres rising to about 13 per cent of National Electricity Market consumption over the decade. The operator also points to heavy project attrition and uncertainty over when and where connections will land.
The Australian Energy Market Operator expects data centres to draw 34TWh by 2035–36, compared with about 5TWh in 2025–26, according to its 2026 Electricity Statement of Opportunities. On that path, data centres would go from roughly 3 per cent of National Electricity Market consumption to approximately 13 per cent.
The modelling looked at 225 known projects in the connection process, together seeking around 67GW of connection capacity. Utility Magazine noted that proposed capacity does not necessarily turn into demand. Since the previous year's forecast, over 40 per cent of projects had either exited or slipped back to an earlier connection stage. In response, AEMO changed its method to allow for projects falling away, for connection capacity exceeding real consumption, and for the time sites take to ramp up.
In the first quarter of 2026, 11 large projects with 5.4GW of maximum demand were moving through the transmission connection process. About 60 per cent of that capacity was in NSW and the rest in Victoria. Large facilities can need hundreds of megawatts and may cluster in particular areas, which can trigger transmission and distribution investment beyond the site itself. Because a site may start with a small initial load and grow towards full capacity, it is harder to say when and where spending will be needed.
AEMO expects total NEM consumption to rise by more than 40 per cent over the next decade, with electrification and new mining and manufacturing loads alongside data centres. About 15GW of coal and gas generation is scheduled to retire. On supply, 9.1GW of generation and storage connected during 2025–26, and around 40GW of committed and anticipated projects are expected to be delivered by the early 2030s. The ESOO also shows an improved reliability outlook, with no forecast reliability gaps before 2030.
Policy remains in flux. At the National Cabinet meeting on August 26, the federal government eased its stance on requiring new data centres to run on additional renewable generation backed by firming. The resulting agreement gives Queensland and the Northern Territory more room, including allowing coal and gas to supply data centres under the emerging national framework. The national standards are still being developed.
Utility Magazine also raised the question of how infrastructure costs for major new loads should be shared when a few very large customers drive the investment. How much of the projected demand arrives will depend on AI adoption, project financing, construction timelines and connection outcomes.