A massive pipeline of artificial intelligence data centre projects valued at approximately $100 billion is under consideration in New South Wales, prompting serious concerns from government officials about potential energy price impacts. NSW Environment Minister Penny Sharpe expressed apprehension during a budget estimates hearing that these facilities could significantly drive up electricity costs for households and businesses across the state.
The government’s Investment Delivery Authority is currently evaluating 26 submissions for new data centre projects that collectively represent unprecedented investment in AI infrastructure. Minister Sharpe acknowledged that increased demand from these energy-intensive facilities could place substantial pressure on wholesale energy prices, potentially adding up to 12% additional demand on the state’s energy sector.
While recognizing NSW’s attractiveness for technology investment due to its clear renewable energy pathway, Sharpe confirmed the government is simultaneously developing a comprehensive data centre strategy and examining how these facilities might connect to the grid. The complexity of balancing technological advancement with energy affordability has prompted the establishment of a separate parliamentary inquiry—the first of its kind in NSW.
This cross-party investigation, supported by both the Coalition and the Greens, will examine the multifaceted impacts of data centres on critical infrastructure including water resources, electricity networks, land use, and workforce requirements. Opposition voices have raised alarms about global precedents where data centres have driven up power prices, disrupted housing development, and created community disturbances through noise and heat effects.
The inquiry represents a critical opportunity for public discussion about managing the AI revolution’s infrastructure demands while protecting public resources and minimizing negative impacts on NSW residents and businesses.









