Australia needs more energy, fast

The speed at which various forms of energy can be built is a significant concern for Australia, particularly in relation to data centers. According to AEMO estimates, renewable energy sources combined with battery and gas peakers are the only viable options for fast construction. Data center companies are primarily motivated by profitability and have resorted to using on-site gas and diesel generators to ensure a stable power supply.

This is due to the weather-dependent and intermittent nature of renewable energy, as well as grid-supplied power bottlenecks. The need for a stable 24/7 power supply for data centers is incompatible with the planned fully renewable grid. To build new power capacity quickly, data centers in the US are resorting to quick construction methods like jet engine installations.

Australia will require doubling its backup gas power capacity to 12GW by 2050, as stated by AEMO. Coal retirements align with their natural end of life, necessitating at least another dozen gas peakers. In the US, where the race to power data centers is more intense, gas, batteries, and renewables are the only short-term solutions.

It is illogical to demand more power while insisting on an expensive mix of technologies, which is reminiscent of China's centrally planned energy model. Chinese bureaucrats are aware that the most competitive new power capacity comes from renewables and gas. The major bottleneck in the energy transition, whether for data centers or personal use, is affordable gas. A gas domestic reservation to bring prices down should be the most important step taken.