Business · Energy & Commodities · 4 hrs ago
South Australia allows gas to help power proposed AI data centres
South Australia’s energy minister says gas can help keep proposed AI data centres powered when renewable sources are not producing enough electricity.
The centres are planned for several regional locations, and the state’s strategy says they must supply their own power.
The government’s strategy promoted renewable energy, and the state aims for 100 per cent net renewable electricity by 2027.
The Conservation Foundation of SA says gas would undermine that progress, while the Greens call the decision a reversal and want a pause on new data centre construction.
One proposed centre at Tungkillo, planned by Quantum DC, was put on hold by its developer; it had expected about 20 per cent of its power to come from gas.
Other large projects are proposed near Bundey, Tailem Bend and Port Augusta, but the government has not announced a change to its position.
South Australia’s energy minister says gas can help supply power to proposed AI data centres, drawing criticism from conservation groups and the Greens.
Tom Koutsantonis said gas could provide electricity when renewable sources such as wind and solar are unavailable.
The government’s data centre strategy, released just under five months earlier, promoted the state’s renewable energy and required new centres to supply their own power.
Quantum DC has paused plans for a 1,200-megawatt data centre at Tungkillo.
At least three other major data centre projects are planned in South Australia.
- Who
- South Australian Energy Minister Tom Koutsantonis said gas could help power proposed AI data centres. Conservation Foundation of SA chief executive Kirsty Bevan and SA Greens leader Rob Simms opposed the use of gas.
- What
- The state government supports using gas to provide backup power for data centres.
- When
- Koutsantonis spoke to the ABC on November 12, 2026. The government strategy was released just under five months earlier.
- Where
- South Australia, including proposed sites at Tungkillo, Bundey, Tailem Bend and Port Augusta.
- Why
- Koutsantonis said data centres need large amounts of continuous power and gas could provide electricity when wind or solar power is unavailable.
South Australian government
Conservation Foundation of SA and SA Greens
Use of gas
South Australian government
The government supports gas to help provide reliable electricity for data centres when renewable sources are unavailable.
Conservation Foundation of SA and SA Greens
Bevan called gas a step backwards for the climate, and Simms called the proposal a major departure from the government’s earlier policy.
Alternatives and policy
South Australian government
The government says allowing large new energy demand without new firmed renewable energy could make the system more expensive and less reliable.
Conservation Foundation of SA and SA Greens
Bevan said storage and other backup technologies could support grid reliability; Simms urged the government to reconsider and proposed a moratorium on data centre construction.
The South Australian government released its Data Centre Strategy, which promoted renewable energy.
Quantum DC announced it was pausing plans for a 1,200-megawatt data centre at Tungkillo.
Koutsantonis told the ABC he supported using gas to help power proposed data centres.
- Tungkillo project
- Quantum DC had planned a 1,200-megawatt data centre.
- Tungkillo site
- A 220-hectare block in the Adelaide Hills.
- Quantum DC energy plan
- About 20 per cent of the project’s energy was expected to come from a proposed gas power station; the rest was to come from renewables.
- Bundey project
- Iren proposed an 800-megawatt facility costing $10 billion near Robertstown.
- Other proposed sites
- Firmus announced plans near Tailem Bend and Port Augusta.
What people are saying
We support the idea of gas use to firm data centres the same way we support the idea of gas firming our renewable energy right now
Well if you don't let them use gas, they'll use diesel or they'll use coal.
South Australia has led the nation on renewable energy and is aiming for 100 per cent net renewable electricity by 2027, but that progress could be undermined by proposals to lock in more gas
It's a total backflip from where the government was just a few months ago when they gave an assurance to the people of South Australia that these data centres would be self-sufficient, they'd be reliant on renewables.