Australia data centre capacity to nearly double by 2030

Data Centres Australia has published a new forecast on the Australian data centre market, pointing to continued growth in capacity and a wider spread of development beyond Sydney and Melbourne.

Produced with market intelligence firm DC Byte, the report tracks 163 operational data centres across Australia and puts current operational capacity at 1.6GW. It forecasts capacity will rise to 3.9GW by 2030, up from an earlier projection of 3.2GW, alongside 97 additional facilities.

The figures also show a sharp rise in projects moving through the development pipeline. Total forecast pipeline capacity has increased by 5.2GW since the previous edition, while capacity under construction has doubled over the same period.

That growth in construction is evenly split between Sydney and Melbourne, but the pattern at earlier development stages has shifted. Melbourne has seen more capacity move from early stage to committed status than Sydney, at 1.2GW compared with 0.7GW.

By contrast, Sydney's total pipeline and early stage capacity have both declined, with total pipeline capacity down 3.6GW and early stage capacity down 4.4GW. The report links the fall to energy constraints, policy approval timelines and recent policy changes.

Melbourne's total pipeline has increased by 1.7GW and now exceeds Sydney's. Early stage projects in Melbourne rose by only 0.3GW, suggesting much of the change came from projects advancing to later stages rather than from a surge in new proposals.

Market shifts

The report also points to a geographic shift in where data centre projects are being planned. Over two years, the share of the total pipeline outside Sydney and Melbourne has risen from 19% to 31%.

These projects include early stage developments in Queensland, Tasmania, South Australia and Western Australia. The report says energy constraints, policy settings and government investment signals are shaping where operators and customers choose to locate projects.

DC Byte's approach differs from tallies based mainly on announced schemes or connection applications. The report's methodology assesses project viability and aims to distinguish between projects more likely to proceed and speculative schemes that may never reach the market.

That distinction matters in a sector where demand projections can generate large headline numbers that do not always translate into built capacity. Its segmented approach is intended to support evidence-based policy and planning by focusing on what is more likely to be delivered.

Demand for cloud services and AI compute is identified as a central driver of the expected rise in capacity. At the same time, planning processes, energy availability and policy differences between states are emerging as stronger influences on where development occurs.

Belinda Dennett, Chief Executive Officer, Data Centres Australia, said the report was intended to provide a more measured view of the market. "Australia is a highly attractive market for sustainable data centre development, with a leading industry ecosystem and attributes such as large-scale renewable energy generation. Credibly tracking data centre growth requires nuance and our report is designed to help cut through the noise by qualifying project viability," Dennett said.

She said project activity had continued to strengthen since the previous report. "Capacity under construction has doubled since our April report and more capacity has moved from early stage to committed, demonstrating continued demand in the market," Dennett said.

State contrast

The clearest contrast in the latest figures is between Victoria and New South Wales. The report says Victoria's gains may reflect faster approval processes under the state government's Development Facilitation Program, while projects in New South Wales face the State Significant Development process and a less certain approval timetable.

Dennett pointed to the recent shift in Victoria's numbers. "The analysis shows pronounced growth in the data centre pipeline in Victoria over the last six months, likely attributable to the state government's efforts to attract investment. We expect recent changes in policy may have an impact on whether this continues," Dennett said.

She said the spread of projects beyond the two main east coast hubs was likely to continue as new forms of demand reshape siting decisions. "The numbers also reveal a trend for development outside the major hubs of Sydney and Melbourne. We expect to see this pattern continue as new workloads like AI and neoclouds increase demand and bring different siting requirements. We are also seeing current energy constraints and different policy approaches influence customer and operator decisions," Dennett said.