Powering the Cloud Responsibly: Solving Energy and Water Challenges for Data Centres
- Callum Burgess
- Nov 13
- 4 min read
Updated: Nov 14
Our lives increasingly depend on the cloud, but while we are staring at our screens, few of us are actively contemplating the physical infrastructure that makes it possible. Data centres enable movie streaming, online payments, and AI queries, and they are energy- and water-hungry facilities that are becoming increasingly critical and commonplace in Australia.
At Perspektiv, we’re working with data centre operators and their clients to make Australia’s digital backbone sustainable, resilient, and future-proofed. As demand for data storage and AI accelerates, sustainable design and operation are essential if the energy transition and AI explosion are to be successfully navigated.
Australia’s Data Centre Boom
Australia has rapidly become one of the top five data-centre hubs globally, driven by our stable economy, digital adoption, and strategic location within the Asia-Pacific.
But with this growth comes enormous power and water demands:
A single hyperscale data centre can use as much electricity as 50,000 homes.
Morgan Stanley estimates that data centres already consume 5% of electricity on Australia’s power grid, growing to 8% (2,500 MW) by 2030.1
Some forecasts suggest this could reach 15% by 2030 if AI adoption continues its steep trajectory.
Meanwhile, the AEMO expects overall grid demand to double by 2050, driven by the electrification of transport, housing and industry.
According to Sydney Water, data centres currently use ~3.5 billion litres of Sydney’s drinking water each year (less than 1% of total demand); however, this could rise to the equivalent of a quarter of total demand within a decade.2
This rising energy and water demand, set against the challenges of climate change and the transition to a low-carbon future, is creating one of the most complex sustainability challenges of our time.
The Energy and Carbon Challenge
As the nation seeks to electrify and meet its net-zero obligations, the electricity grid is under increasing supply-side pressure. Ageing fossil-fuel generation is being retired, while renewable energy, transmission and storage capacity are still scaling up. The addition of high-energy-demand data centres compounds these challenges, and this tension could shape the pace and cost of Australia’s energy transition itself.
Rising Demand and Grid Pressure
Data centres operate continuously, requiring redundant systems to guarantee uptime resilience. This creates an almost uninterruptible power supply profile, which, as a result, contributes to peak demand pressures and can delay or increase the cost of grid connections.
Energy Affordability and Security Risks
The additional electricity demand could make energy not just more carbon-intensive, but more expensive and more complicated to secure. Operators are now competing for access to renewable energy projects and connection capacity in already constrained markets. In some regions, that’s driving higher network costs and longer approval timelines for new developments.
Global Responses
In the US, hyperscale operators such as Google, Microsoft and Amazon have signed long-term power partnerships. They are even exploring small-scale nuclear generation to secure zero-carbon energy at scale.2 In Australia, we’re beginning to see similar shifts, with corporate renewable PPAs and direct investment in energy projects becoming essential components of sustainable data-centre strategy.
Water Considerations
While energy consumption has dominated the conversation, water usage is increasingly under scrutiny. Cooling systems can consume vast amounts of water, particularly when using cooling towers. This creates competition with community and industrial water users, especially in water-scarce and drought-prone areas.
Frameworks Guiding Sustainable Growth
As the sector matures, credible sustainability frameworks are vital for investors, regulators and communities alike.
Framework | Purpose | Relevance to Data Centres |
ISO 50001 | International Energy Management Standard. | Drives continual improvement and verification of energy management systems. |
NGERS (National Greenhouse and Energy Reporting Scheme) | Mandatory Australian framework for measuring and reporting greenhouse gas emissions, energy production and energy consumption. | As data centre footprints scale, many operators cross NGERS thresholds and must ensure accurate reporting. |
NABERS Energy for Data Centres | Measures energy efficiency and operational performance. | Provides benchmarks for Power Usage Effectiveness (PUE) and emissions intensity. |
Green Star Buildings | Certifies the sustainability performance of buildings. | Recognises leadership across the design and construction of facilities. |
ASRS / IFRS S1 & S2
| Australia’s sustainability reporting standards, based on the ISSB framework | Mandates disclosure of climate governance, strategy, and risk, including energy and emissions data. |
Designing and Operating Data Centres for Efficiency
Delivering sustainability in data centres requires both technical rigour and strategic foresight. Some practical levers include:
Renewable Energy Integration - Sourcing Green Power through PPAs, on-site generation and procurement of renewable energy certificates.
Smart Energy Management - Deploying real-time monitoring and load-balancing technologies to optimise both PUE and WUE.
Zero water cooling systems - Such as chip-level cooling solutions
Closed-loop or hybrid cooling systems - To reduce the total water withdrawal.
Recycled or non-potable water sources - Reclaimed water is used for cooling, piped to a treatment facility and returned to be used again.
Rainwater harvesting - Water reuse technologies can improve Water Usage Effectiveness (WUE) for facilities using air-cooled systems.
Lifecycle & Materials Optimisation - Using modular design, low-carbon concrete, and low-carbon steel reduces the embodied emissions of the infrastructure.
Resilience Planning - Assessing physical climate risks (heatwaves, water scarcity) and embedding redundancy into both energy and cooling systems.
Where Perspektiv Comes In
We are working with some of the world’s leading data centre developers and operators to ensure their energy management systems are efficient and resilient, and we are fast becoming trusted advisors for the sector.
Our related services include:
ISO 50001 Energy Management Systems
NABERS Energy Rating for data centres
NABERS Embodied Carbon assessment (Upfront Carbon)
ESD services for buildings
Energy and water modelling for buildings
Green Star Ratings
Life Cycle Assessment
Climate Active Carbon Neutral certifications
SBTi targets and net zero-aligned decarboniation strategies
Renewable electricity and carbon credit brokers
Embodied-carbon and circular design assessments for new facilities
We combine deep technical insight with a sector-wide perspective, helping clients navigate growth and emerging regulation to build efficient, credible, and future-proof data centres in Australia.
Talk to us about how we can support your data centre project to meet the growing demands of AI, cloud computing and sustainability with intelligence, rigour, and optimism.
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