South Australia is prepared to use gas-fired generation to support its rapidly expanding AI data-centre sector, underscoring the enormous energy requirements of the technology boom.
Energy Minister Tom Koutsantonis said the government was comfortable with gas being used to firm renewable energy supplies for new data centres requiring reliable electricity around the clock.
At least three major projects remain proposed in the state, including Iren’s planned A$10 billion, 800-megawatt Bundey facility, alongside developments near Tailem Bend and Port Augusta.
The shift comes as Quantum DC pauses its proposed 1,200MW Tungkillo data centre following community opposition.
South Australia has previously promoted its renewable-energy credentials as a major advantage in attracting AI infrastructure.
However, data centres require continuous power and can consume electricity on a scale comparable with major industrial facilities.
Supporters argue gas can provide backup when renewable generation is insufficient.
Critics say increasing gas use risks undermining South Australia’s emissions and renewable-energy ambitions.
The debate highlights a growing challenge for Australia: attracting billions of dollars of AI investment while finding enough reliable power to support it.
