Data centre growth in Australia faces power & utility delays

Australia and the Asia Pacific region are witnessing significant expansion in data centre infrastructure, with growing demand driven by artificial intelligence and digital transformation placing pressure on electricity and construction resources.

Bain & Company's latest 2030 global data centre forecast highlights that despite growing public interest in headline projects and investment opportunities, the speed at which new data centres can access crucial utilities such as power and water is emerging as a central challenge for the industry.

Delays and hurdles

Bain's recent research into global data centre construction indicates that connections to essential utilities now represent the most prominent delays to project delivery, with power, water, and sewerage potentially requiring between one and five years to be established. The duration of these connections is influenced by interconnection queues, the transmission and distribution network, and the underlying power generation strategy.

Additionally, the report outlines other factors contributing to construction timelines. Equipment procurement can take eight to 24 months due to high demand for items such as cranes and transformers. The complexity of design, including considerations for larger cranes and more substantial cabling, may extend projects by six to 18 months. Acquiring permits, managing regulatory scrutiny, and addressing public opposition can also introduce delays ranging from six to 18 months, while the availability of skilled labour can further slow progress by another six to 12 months.

The research estimates that globally, the construction of data centres has struggled to keep pace with demand, with the world requiring an estimated extra USD $500 billion investment each year to match the current growth curve. In Australia, recent developments include the expansion of the CDC across Sydney, Canberra, Perth, and Auckland, and Firmus's plans for so-called 'AI factories' in Melbourne and Tasmania.

Electricity demand and power access

The forecast projects strong growth in demand over the coming years, estimating that global data centre capacity will reach 163 gigawatts (GW) by 2030 - double current levels. The United States is expected to see data centre electricity demand rise to 409 terawatt-hours (TWh) by the end of the decade, driven largely by AI technology.

"We expect there will be sufficient energy supply to meet demand," said Aaron Denman, leader of Bain's Americas Utilities and Renewables practice. "However, power access is now the critical gatekeeper of growth. Even as GPU and construction constraints ease, more flexible and independent sources of power will be needed. As such, the behind-the-meter (BTM) power generation has become the go-to source shifting timelines and decision-making."

Bain finds that US data centres could consume approximately nine percent of the country's total electricity by 2030, more than double the current share and around 150 TWh above baseline projections from the US Energy Information Administration.

Addressing this surge in demand will require close cooperation between utility providers, regulators, and data centre operators. Near-term strategies consist of flexible demand management programmes to shift consumption, battery storage to manage volatility, and the uptake of behind-the-meter options such as natural gas, rooftop solar, or nuclear power reactivation. Longer-term solutions focus on grid modernisation, increased renewable integration, and enhanced transmission networks.

Shifting investment and capacity

The renewed focus on disciplined and selective growth among hyperscalers - organisations with massive data and cloud needs - is also shaping how the sector invests in new infrastructure.

"The general prediction that hyperscalers would scale back investments didn't happen in 2025. However, we are seeing more deliberate investments by hyperscalers as they scale capacity focusing more on capital efficiency and getting more selective on locations for new deployments, particularly for AI," said Padraic Brick, co-leader of Bain's data centre perspectives.

Bain predicts North America will continue to host nearly half of global data centre capacity by 2030, propelled by ongoing capital expenditure from hyperscalers. In other regions, sovereign AI mandates and business adaptation to emerging technology are spurring capacity investments. Firms are selecting locations based on latency requirements, data retention regulations, and energy sourcing strategies.

On the technical front, Bain notes that by decade's end, most AI computation will arise from inference workloads, supported by smaller, distributed centres. Conversely, extremely large data centres, with at least one gigawatt of power, are expected to host the largest AI training models.

Optimising construction

The analysis also identifies several strategies developers can employ to mitigate the risk of extended build times. These include selecting appropriate markets and creating a portfolio of sites, utilising modular and prefabricated designs, deploying cross-functional experts to optimise design and supply chains, and collaborating with suppliers for advance bulk orders of key equipment. Bain calculates these actions can reduce overall construction timelines by up to 12 months.

"The AI data center race is no longer just about scale. Winners are taking deliberate and careful approaches to capacity investments, while at the same time, actively securing fit-for-purpose power generation and mitigating build delays," said Peter Hanbury, leader of Bain's global work on operations for Technology clients.

The report concludes that while the conversation has largely revolved around expansion and capability, the pace at which new facilities can be connected to reliable utilities is now at the forefront of the sector's challenges, and this is set to influence investment and project strategies for years to come.