Datacentre Operators Confront Energy and Water Headwinds This Year

Datacentre developers on the Sunshine Coast report energy bills climbing 18 percent since January while water allocations for cooling systems remain capped at 2024 levels.

The squeeze follows federal warnings on AI-driven power demand and comes as operators expand facilities to meet cloud and machine-learning contracts signed last year. Local projects now compete with residential growth for the same substation capacity and bore licences, pushing some timelines back by six months.

Projects along the Maroochy corridor

Two facilities under construction near Maroochydore Road and the Sunshine Coast Innovation Centre at Sippy Downs have each requested additional grid connections of 25 megawatts. Council records show the applications were lodged in March and still await final sign-off from Energex. Meanwhile the Kawana Waters business park has delayed a third-stage expansion that was due to break ground in September, citing uncertain water supply from the nearby Ewen Maddock Dam pipeline.

These delays affect more than 120 local contractors who had already priced work for the sites. The Innovation Centre itself hosts 14 start-ups that rely on the new racks for beta testing; several have shifted trial workloads to Brisbane facilities at higher latency and cost.

Numbers behind the squeeze

A March 2026 audit by the Sunshine Coast Regional Council put annual water use for existing datacentres at 87 megalitres, up from 61 megalitres two years earlier. Electricity consumption across the same sites reached 142 gigawatt-hours in 2025, according to network data released last month. Average power prices for large users on the Coast rose from $92 per megawatt-hour in December to $109 in June.

Operators now explore dry-cooling retrofits and off-peak shifting, but equipment lead times stretch to nine months. One firm at Sippy Downs is trialling a 2-megawatt battery bank to smooth demand spikes rather than draw extra from the grid during afternoon peaks.

Companies planning new capacity are advised to submit joint applications with neighbouring industrial users by the end of August, when Energex will release its next five-year augmentation plan. Early movers can lock in connection quotes before any further price resets scheduled for January 2027.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.