Data centres have emerged as the primary driver of electricity demand growth in Australia, with utility Origin Energy reporting that the sector propelled a 4% increase in sales volumes during the March 2026 quarter compared to the same period last year.
Detailed in the company’s quarterly report, electricity sales reached 9.4TWh in the quarter, with business volumes climbing 7% year-on-year to 0.4TWh.
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Chief executive Frank Calabria said Origin had continued to grow its share of Australia’s data centre market.
“We’re well-positioned to support further growth in demand from this sector through grid connections, long-term renewable energy contracts, and on-site solar and batteries. Our generation fleet maintained good reliability, and we’ve secured most of the coal supply for Eraring for FY27,” Calabria said.
The results showcase the rapid transformation of Australia’s electricity demand profile as data centre operators establish facilities to serve cloud computing and artificial intelligence workloads.
The Australian Energy Market Operator (AEMO) projects that data centre electricity consumption could reach approximately 6% of National Electricity Market (NEM) demand by 2030, up from around 2% currently, with further growth anticipated under higher-uptake scenarios.
The growth of data centre demand in Australia and how the solar PV and battery energy storage industries are poised to capture the opportunity will be explored in our next PV Tech Power journal.
Regulatory response and market outlook
The integration of renewable energy generation, such as solar PV, and battery storage systems into data centre infrastructure also creates opportunities for these assets to participate in wholesale electricity markets during periods when capacity is not required for facility operations.
This could potentially improve investment economics while providing grid flexibility services.
However, readers of PV Tech will be aware that concerns are mounting in Australia around data centre developers not contributing adequately to grid infrastructure costs, with industry voices warning that social backlash is inevitable if facilities are perceived as freeloading on Australia’s clean energy transition.
To help address this, the Australian Energy Market Commission (AEMC) has started developing regulatory frameworks to accommodate what it terms “inverted baseloads”, defined as large, constant electricity consumers like data centres.
As reported last month, draft access standards released by the AEMC propose different requirements based on facility size thresholds at 30MW and 100MW, reflecting the challenge of integrating substantial new baseload demand into a grid increasingly reliant on variable renewable energy.
The International Energy Agency (IEA) projects that global electricity demand from data centres will more than double by 2030 to exceed 945TWh annually, driven substantially by AI-optimised facilities where demand is expected to more than quadruple over the same period.
Battery storage to capture data centre demand
Origin’s strategy to capture data centre demand includes deploying battery energy storage systems (BESS) that can serve multiple functions for these facilities.
The company began generating revenue in January 2026 from the first stage of its Eraring battery storage project, a 460MW/1,770MWh system with approximately 3.8 hours of discharge capability located at the site of Australia’s largest coal-fired power station.
A second stage is expected online in early 2027, bringing total capacity to 700MW/3,160MWh.
Battery storage is increasingly recognised as essential infrastructure for data centre operations, addressing three primary use cases according to Fluence chief growth officer Jeff Monday, who spoke exclusively to ESN Premium at the Energy Storage Summit Australia 2026 last month.
These include accelerating grid connection timelines by reducing firm power commitments, providing more efficient backup power to replace diesel generators, and smoothing power loads between facilities and the grid or on-site generation.
Monday predicted that once standardised battery storage blueprints are finalised with hyperscale customers in the US, deployment in Australia will experience rapid acceleration.
Origin’s broader quarterly results showed gas volumes declined 32% year-on-year, primarily due to lower trading volumes and reduced gas demand for power generation, driven by increased rooftop solar output and growing battery storage deployment.
The company has secured 75-85% of the anticipated coal consumption for its coal-fired Eraring Power Station for the 2027 financial year. Origin extended Eraring’s operational life to April 2029 in January 2026, citing the need to support a secure power supply as renewable energy, storage, and transmission projects are delivered.
The company is targeting up to 5GW of renewables and energy storage by 2030, including committed development of 1.7GW of owned and tolled battery storage capacity, representing approximately AU$1.7 billion (US$1.22 billion) in storage investment as it transitions from coal-dependent generation.
