Ghost Grids, Digital Islands
Australia is in the middle of two revolutions that should align: the clean-energy transition and the explosive growth of digital infrastructure.
They’re having a tough time talking.
On one side sits AEMO’s Integrated System Plan (ISP) — a 30-year roadmap for transmission, renewables, firming and system stability, whose forecasting for datacentres now looks underbaked.
On the other sits the third-largest data-centre pipeline in the world — backed by hyperscalers, financiers, and growing political enthusiasm.
Yet these two maps barely touch. The result is a system of ghost grids and digital islands: vast renewable zones with no digital load, and vast digital loads with no renewable supply.
We need to connect the two. That’s what CZI does.
The Ghost Grid
AEMO’s new ISP makes one thing painfully clear: Australia must build 6,000 km of new transmission by 2050 just to integrate planned renewables and meet reliability standards.
But the ISP does not meaningfully incorporate the electricity demand from AI and hyperscale data centres — demand that Oxford Economics forecasts will triple by 2030 (from 4 TWh to 12 TWh).
Globally, compute demand is expected to reach 1,200 TWh by 2035, according to BloombergNEF.
Meanwhile, AEMO’s 2024 ISP Overview shows that firming and transmission are already running behind schedule, with actionable projects delayed due to planning, social licence and cost overruns.
In short: the energy system is struggling to meet the digital future.
Digital Islands
Data-centre developers choose sites based on:
proximity to capital-city demand,
fibre availability,
water or cooling resources,
land economics, and
political signalling.
Not renewable supply (yet).
Sydney and Melbourne remain the gravitational centres, even though their grids are constrained, carbon-intensive and already facing connection backlogs.
This is how "digital islands" form: pockets of massive electricity use built on the “dirtiest available megawatt” — not the cleanest. Bloomberg recently showed that in parts of the U.S., wholesale electricity prices around major AI/DC clusters have risen 267% in five years because compute arrived before policy did.
Australia risks the same.
1. There is no national data-centre policy.
Unlike the EU, Australia has:
no energy-use or emissions reporting requirements,
no water-use disclosure,
no siting guidance tied to Renewable Energy Zones (REZs),
no national DC registry or transparency code.
The EU, meanwhile, mandates sustainability reporting for all DCs >500 kW under the Energy Efficiency Directive, with publication to a continental database.
Fortunately, the Australian government has announced policy details for data centre governance to be released mid next-year.
This is our opportunity to align Ghost Grids with Digital Islands.
2. Digital demand is invisible to planners.
Morgan Stanley and Baringa estimate DCs could reach 6–11% of national electricity consumption by 2030.
CZI welcomes the proposed AEMO ISP methodology, which includes a more robust outlook on data centres consumption. When the load isn’t modelled, the system builds no new capacity for it.
3. The REZ system is not designed for compute.
NSW’s REZ inquiry found widespread community fatigue, confusion, and distrust — the kinds of conditions that repel rather than attract complementary industry like data centres.
News stories are already emerging thick and fast about data centre resource consumption. Without social licence, REZs cannot become the “clean-power industrial estates” Australia needs.
4. Fibre and transmission are planned separately.
The energy transition needs poles and wires; the digital transition needs fibre.
In a decentralised energy system, site infrastructure needs to match. Right now, they are funded, governed, and routed by entirely separate systems — even when both traverse identical regions.
Clean Cloud Needs a Shared Map
To bring the ghost grid and the digital islands together, Australia needs a national framework that does three simple things:
1. Make digital demand visible.
Mandate reporting, real-time energy-source disclosure, and a national registry of new projects.
2. Link approvals to firmed renewables.
Link approvals for large DCs with matched renewable PPAs + storage or directly connected to renewable sources.
Create a market mechanism that links existing renewables investment schemes with new data centres.
3. Integrate fibre, storage, and REZ planning.
Treat digital load as part of the REZ ecosystem: not an afterthought, but a co-located partner.
This is exactly where CZI’s Clean Cloud project sits — connecting two major economic transformations through policy, planning and community engagement.
