Mega data centres in bed with big gas: how fossil fuels are powering the AI boom

Summary

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Podcast Summary: 7am – "Mega data centres in bed with big gas: how fossil fuels are powering the AI boom"

Date: June 7, 2026
Host: Ruby Jones (Solstice Media)
Guest: Ketan Joshi (Climate expert and Greenpeace report author)

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Episode Overview

This episode investigates the intersection of Australia’s massive new AI data center projects and their increasingly intimate relationship with fossil fuel, particularly gas-fired power. Drawing on a new Greenpeace report, climate expert Ketan Joshi explains the scale of planned data centers, debunks industry jobs and productivity claims, and warns about regulatory loopholes enabling a new fleet of emissions-heavy “shadow grids.” The core question: Will Australia use the AI boom to supercharge renewables, or will it supercharge its own fossil fuel usage?

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Key Discussion Points & Insights

1. The Scale of Australian Data Centres

• Unprecedented Growth:
  • Some proposals for single campuses exceed the output of whole coal plants; one is as large as 350 hectares ([00:01]).
  • The "Mumra Road campus" in NSW is proposed to use as much energy as all Australian households combined ([01:24]).
• Global Context:
  • Australia has fewer megaprojects than the US but, project-for-project, matches or exceeds global titans.

  “I read of a project over the weekend that is 2.4 gigawatts... a 1 gigawatt facility in New South Wales... will have the energy consumption of all households in Australia.” – Ketan Joshi [01:24]

2. Economic and Jobs Arguments Deconstructed

• Economic Promise:
  • Promises of AI-enabled productivity booms.
  • Slight improvements in coding efficiency; negligible elsewhere for the financial investment ([03:23]).
• Job Creation:
  • Burst in construction jobs, then a sharp drop.
  • Long-term operations require minimal ongoing staff.

  “A lot of the jobs are quite transient... and then there’s very, very few jobs that are ongoing, really. You just need someone to kind of walk the halls...” – Ketan Joshi [03:23]

3. Climate and Energy Costs: Real Story vs. Industry Spin

• Demand Drives Fossil Fuels:
  • Connecting to the grid boosts demand, increasing coal and gas generation ([04:29]).
  • Water consumption, local air pollution, and scale have shifted from manageable to "very unmanageable" ([04:29]).
• Renewables Claims Critiqued:
  • Data centers employ accounting tricks akin to carbon offsets: buying certificates from renewable providers and claiming zero-emissions, while in reality emissions still rise ([05:29]).

  “The net result and the reality of the grid... emissions increase, and then there’s a bit of paper shuffling that goes on around renewables.” – Ketan Joshi [06:21]

4. The Fossil Fuel Industry’s Play

• Emergence of “Shadow Grids”:
  • A rising trend: data centers building dedicated gas-fired plants onsite rather than waiting for grid connections or investing in renewables ([06:49]).
  • Emissions from a single facility can erase years of regional climate progress (e.g., Cloud Carrier project in NSW) ([08:14]).

  “These are massive new fossil-fuelled power stations... gone from being on site backup generation to... a shadow grid.” – Ketan Joshi [08:14]

• Global Pattern:
  • Trend is global: UK, Canada, US, spurred by gas turbine manufacturers ([08:05]).

5. The Regulatory Vacuum

• Australia’s Weak Oversight:
  • Planning applications require reporting of emissions estimates, but have no binding caps ([09:37]).
  • Only weak penalties via the “safeguard mechanism” (buying cheap carbon offsets) for direct emitters like onsite gas plants ([09:37]).
• Renewables Requirements Evolving:
  • Recently, government set expectations for data centers to use "new" renewable energy ([11:29]).
  • The Energy Markets Commission may soon require data centers to build or wait for genuinely additive renewable capacity ([11:59]).

  “There might be eventually good regulation, but it has to be fought for.” – Ketan Joshi [11:59]

6. Risks and the Coming Regulatory Battle

• Big Tech’s Mixed Messaging & Greenwashing:
  • Tech companies tout unmatched ability to self-regulate, but lobby hard against meaningful constraints as soon as rules are proposed.
  • Major AI firms (OpenAI, Anthropic) provide no emissions transparency and are actively building fossil-fueled infrastructure globally ([13:03]).
  • Fear of regulatory capture and lobbying to water down standards in Australia; similar trends visible with Amazon/Microsoft abroad.

  “They will fight hard against any regulation that implements real material restrictions... They will be lobbying to weaken standards. And I think what happens in Australia will be one of the biggest fights in the world.” – Ketan Joshi [14:43]

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Notable Quotes & Timestamps

• “The current two largest projects that have actually applied for connections are 1 gigawatt... will have the energy consumption of all households in Australia.”
  – Ketan Joshi [01:24]

• “A lot of the jobs are quite transient... then there’s very, very few jobs that are ongoing, really. You just need someone to... maintain the systems.”
  – Ketan Joshi [03:23]

• “Now... all that happens is that you add a bunch of new demand, emissions increase, and then there’s a bit of paper shuffling... around renewables.”
  – Ketan Joshi [06:21]

• “Just the emissions from that [Cloud Carrier] project alone would wipe out all... projected emissions reductions in New South Wales in 2028.”
  – Ketan Joshi [08:14]

• “The only way a data center might actually end up having any type of regulatory limit... is if, say, for instance, it installs a gas-fired power station... [then] they can simply buy as many carbon offsets as they want to comply...”
  – Ketan Joshi [09:37]

• “There might be eventually good regulation, but it has to be fought for.”
  – Ketan Joshi [11:59]

• “They will try to greenwash and adapt... They will fight hard against any regulation that implements real material restrictions... I think what happens in Australia will be one of the biggest fights in the world.”
  – Ketan Joshi [14:43]

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Key Timestamps

• [00:01] — Introduction to scope and scale of proposed data centers
• [01:24] — Quantifying the size of projects
• [03:23] — Reality of jobs and productivity claims
• [04:29] — How new data centers drive up fossil fuel demand
• [05:29] — Greenwashing via renewable energy certificates
• [06:49] — Fossil fuel industry’s opportunity in powering AI data
• [08:14] — Project-specific climate impacts (Cloud Carrier example)
• [09:37] — Regulatory loopholes and weak governance
• [11:29] — Government’s “good intentions” and forthcoming rules
• [13:03] — Threats from foreign corporate influence, lack of transparency
• [14:43] — The urgent need for strong, enforceable regulation

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Tone and Closing

Ruby Jones and Ketan Joshi maintain a mix of clarity and urgency throughout, carefully unpacking technical and legislative issues for a lay audience but with a clear warning: without robust, enforceable rules, Australia risks locking in a new era of fossil-fueled AI infrastructure, undermining both emissions targets and global leadership in renewables.

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For further insight, listen starting at [06:49] for the mechanics of gas-fired “shadow grids”, and [13:03] for the regulatory and corporate battle ahead.

Transcript

[Ruby Jones]

I'm Ruby Jones and you're listening to 7am. Right now, AI data center megahubs are being planned across Australia. Some are as large as 350 hectares. That's the equivalent of 175mcg playing fields. And the energy they need to fuel them is just as huge, more than the total output of an entire coal plant. The solution, so called shadow grids built into partnership between the data centres and big gas, where gas fired power plants are placed directly on site, powering the centres and generating huge emissions in the process. Today, Katan Joshi, climate expert and author on a new Greenpeace report on the relationship between fossil fuel companies and data centres and Australia's vulnerability in the AI race. It's Monday, june 8th.

[Interviewer]

So Katan, in Australia right now we're seeing this wave of very large data center proposals. And to begin with, would you mind just telling me a bit about some of these projects, about what it is that's being proposed, how big they are? Yeah, tell me about what we're seeing.

[Katan Joshi]

Australia's data center project proposals are massive. At a global scale, these projects are now getting up into high hundreds of megawatts and even gigawatt scale, which is essentially what we're seeing in the us. Australia obviously has fewer of these large projects, but the scale of each individual project, it's only getting bigger. I read of a project over the weekend that is 2.4 gigawatts. To give you a sense of scale, the current two largest projects that have actually applied for connections are 1 gigawatt, the 1 gigawatt facility in New South Wales, that's called the Mumra Road campus. That one will have the energy consumption of all households in Australia. So not just in New South Wales or one part of Australia, all households in Australia. So that gives you a sense of scale of how big it is.

[Government Official]

In the global race for data centre investment, Australia is at the front of the queue. Abundant renewable energy, skilled engineers, available land and steady governance.

[Interviewer]

And so the reason that the Australian government is supportive or interested in these projects is because data centres are being sold essentially as the backbone of the AI economy.

[Government Official]

The outlook for business investment remains robust with a solid pipeline of data centre and renewable energy projects.

[Interviewer]

So tell me a bit about the argument that's being made for why we should be supporting the development of these centres. What's the benefit?

[Katan Joshi]

The line that we see everywhere around the world kind of has two sides to it. The first is economic. Essentially the implementation of the services provided by these data centers, specifically artificial intelligence, will cause A productivity boom.

[Industry Representative]

We are expecting them to provide jobs like pathways for apprentices in the build out of these facilities and privileged access to our startups to, to computing power, which can be quite expensive for startups.

[Katan Joshi]

But that is not something that we're really seeing play out very much in companies that are particularly, even the ones that are the heaviest adopters of AI systems, some of them have small productivity gains, particularly those that are doing coding. That seems to be one area in which there is a slight increase in efficiency. But when it comes to all of the other stuff like text generation and image generation and videos, it is a pretty minor improvement for such a significant financial cost. And then the second argument they often use relates to jobs. And that's something that we know with real confidence has been exaggerated very significantly. A lot of the jobs are quite transient. You have a real burst of jobs during construction simply due to the scale of the data center growth. And then there's very, very few jobs that are ongoing really. You just need someone to kind of walk the halls and maintain the systems.

[Interviewer]

Okay. And a lot of concern around data centers has focused on the costs in terms of the energy cost and the environmental costs. So can you talk to me a bit about that? What do we know?

[Katan Joshi]

Sure. I was lead author on a report that was released by Greenpeace Australia recently. And what we found is that when data centers connect to the grid, you actually end up incentivizing the generation of coal and gas because you're simply increasing demand. You put constraints on power prices and then of course there's all of the flow on impacts in terms of local water consumption and air pollution. So these are all major constraints that have existed for a long time. Data centers have always needed water and power. The difference now is simply the scale. They've gone from manageable problems to really very unmanageable and difficult and thorny problems. So what we look at in the report is simply how much renewable energy would be needed to cover off the, the growth of data centers. It's a very large amount of new capacity and the industry itself is not showing that it's prepared to build that amount of new capacity.

[Ruby Jones]

Right. Because a lot of data center companies

[Interviewer]

would say that their projects will be powered by renewables or that they'll be net zero.

[Katan Joshi]

Yeah. So the way this generally has worked with technology companies around the world is that they will say they will make a claim to either having zero emissions from their power consumption or, or they'll market their services as 100% renewable. A lot of them rely on a mechanism very similar to carbon offsets, if people are familiar with that. Where you buy a certificate created by a renewable energy generator, the logic behind the claim is that because you bought that certificate, you can kind of claim those emissions reductions as your own. But that generation would have happened anyway. The renewable energy, the wind farm would have pumped out those electrons regardless of whether or not you bought that certificate. Which means the net result and the reality of the grid, really all that happens is that you add a bunch of new demand, emissions increase, and then there's a bit of paper shuffling that goes on around renewables.

[Ruby Jones]

Coming up, the relationship between data centers and big gas.

[Interviewer]

Okay, so we've got this new industry arriving that we know will need a lot of electricity. Many of the data centers say that they'll be powered by renewables, they'll be net zero. But what do we know about how the fossil fuel industry is looking at this boom?

[Katan Joshi]

So what we found in our report is that off grid gas power plants to run data centers have emerged as a major new threat. I was personally quite surprised at this. I think if you'd asked me two years ago, I would have simply said this is just unlikely because it's so absurd. But in America, many data centers are actually, instead of waiting for a connection to the power grid or building renewable energy, which would be cheaper, they are actually just building a gas fired power station instead.

[Dr. Jenny Haynes]

Just over this fence, you can see and hear the turbines churning 24 hours a day, seven days a week. Without them, the data center does not function.

[Katan Joshi]

And at a scale that is unbelievable.

[Industry Expert]

What we're talking about in this site is potentially energy consumption of as much as 1 gigawatt. And to put that into context, that is about the size of a large nuclear power station for this site.

[Katan Joshi]

These projects, the ones that are under construction, are massive. They're multi gigawatt gas fired power stations, more than Australia's entire installed capacity of gas fired power.

[Interviewer]

AI has already taken over many parts

[Katan Joshi]

of our lives and now a new data center could go up in a residential area. And in Australia we're starting to see the same thing.

[Industry Expert]

OpenAI has launched a new program which will see it partner with some of our biggest companies to skill up Australians, but also build key infrastructure.

[Katan Joshi]

There is a project in New South Wales called Cloud Carrier that has a 700 megawatt gasified power station project attached to it. Just the emissions from that project alone would wipe out all of the projected emissions reductions in New south Wales in 2028. To give you a sense of the scale of the climate impact of this facility. These are massive new fossil fueled power stations. These have gone from being on site backup generation to being what has been described as a shadow grid, basically an entirely new fleet of gas fired power just for data centers. We're seeing this in the United Kingdom, we're seeing this in Canada. Gas turbine manufacturers are going to data center conferences in Europe and saying, this is coming here, we want to supply you with gas. This is very clearly happening. There are real live projects with documents that you can read about and assess. And even a small proportion of these data centers being powered by gas would result in a very, very material increase in the total emissions. Just one in four data centers being powered by gas would be 2.4 times the emissions of just connecting them to the grid.

[Interviewer]

Okay, how does this actually work when it comes to the Australian regulatory context though? So when projects come up for approval, what does the actually require governments to consider? On climate, on energy?

[Katan Joshi]

So in the Australian regulatory context, a planning application has to report estimated future emissions, but these reports are not limited by regulation in any way. So it's not like a company can report a very large amount of future emissions and then a planner might say, no, those emissions are simply too high. This of course has been the context for various court cases in Australia. So like when a coal mine, for instance, is challenged on the basis that the coal that it digs up will be impacting climate change. So there are efforts to try and make this a greater part of regulation. What happens in Australia is that the only way a data center might actually end up having any type of regulatory limit on its emissions is if, say, for instance, it installs a gas fired power station, like that cloud carrier project. It falls underneath this policy known as the safeguard mechanism, which implements limitations on their direct emissions, but they can simply buy as many carbon offsets as they want to comply with that regulation. So it is a small financial penalty in the form of having to buy carbon offsets that is not really impacting the facilities. And the safeguard mechanism in that they just buy the offsets and they're not too bothered. That is the only example I can think of where a data center might be limited. So for instance, if a data center connects to the power grid and basically says in their planning application, we're going to be 100% renewables, and they do that using weak claims, they are not going to face any regulatory pushback whatsoever.

[Government Official]

Data centers must add to national resilience, not detract from it. That's why earlier this week With Chris Bowen and Andrew Charlton, we announced Australia's expectations of data centers and AI infrastructure developers.

[Katan Joshi]

On the upside, the expectations that were announced by the government a few months back, one of them is actually to be 100% powered by renewable, new additional renewable energy.

[Government Official]

The Microsoft announcement recently about their data center that underpinned a 300 megawatt renewable electricity facility. That's what we want to see is data centers supporting building out additional electricity capability, not a competition for a finite resource.

[Katan Joshi]

The Australian Energy Markets Commission is investigating how to make that a real thing. And so basically, if you have data centers that are forced to actually build or wait for sufficient new renewable energy that they have brought on, on top of what else would have come online anyway, then you could actually end up with a situation where at least they cover off their own impacts. So there might be eventually good regulation, but it has to be fought for. I think there will be some sort of law or limitation on the emissions or renewables claims of new data center developers in Australia. But now the fight is going to shift to whether it's a good regulation or a weak regulation.

[Interviewer]

Well, tell me about that because, I mean, as you say, at the moment we seem to be at a critical juncture. We've got these big US tech giants, companies like OpenAI and Anthropic, interested in investing in Australia, it seems. So. I mean, what do you see as the risks here if governments don't tighten the rules? And what would a kind of a good system look like at this point?

[Katan Joshi]

The data center lobby tends to flip between kind of happy optimism and a weird sort of passive helplessness depending on what they're talking about. So if they're talking about voluntary actions to drive the energy transition, they can basically do anything, right? Like they can cover off 100% renewables. It's not a problem, et cetera, et ceter. But as soon as a regulation was proposed, they flipped to basically saying, oh, there's simply not enough renewable energy. There's not enough, you know, there's too many constraints on the grid. You know, there's not enough projects, which is a contradiction against their original message, which is the idea that data centers will be the thing that solves those problems. They're the things that create new force, new energy for the transition and renewable growth. We've got organizations like Anthropic, OpenAI, both companies that do not disclose a single digit of their energy and emissions data. Both companies that we know now for sure are building a material and serious amount of new fossil fuel infrastructure for their data centers. Anthropic just did a deal with Xai's gas fired facilities in Memphis, Tennessee with Elon Musk. These are companies that very, very clearly are not invested in the energy transition having any level of transparency whatsoever. And so they will bring these attitudes to Australia. They will try to greenwash and adapt to the rhetoric and the regulatory environment in Australia. They will fight hard against any regulation that implements real material restrictions on companies to obey the physical boundaries of the planet and human safety and environment. When they build their data centers, there will be lobbying to weaken standards. And I think what happens in Australia will be one of the biggest fights in the world. Right. This is something that is happening elsewhere. Companies like Amazon and Microsoft starting to weaken their commitments. We're going to be seeing a whole slew of updates from their corporate reports in the coming weeks and I think they're all going to show rising emissions and it's going to explain why the companies are fighting against regulation and fighting against the efforts to make them actually clean up their own mess and pay attention to the physical limitations of where they're building.

[Ruby Jones]

Well, Katan, thank you so much for talking to me about all of this today.

[Katan Joshi]

No worries. Thanks for having me.

[Ruby Jones]

7am will be back tomorrow with a bit of a different episode.

[Dr. Jenny Haynes]

I'm Dr. Jenny Haynes. I have multiple personalities, so you're going to meet Jenny Haynes.

[Ruby Jones]

Plus today Dr. Jenny Haynes set a world first legal precedent when her older were allowed to testify in court against her abusive father who was later sentenced to 45 years in jail.

[Dr. Jenny Haynes]

I never knew that NPD did was going to be the story. I never knew I was going to be the story. And so since waiving my right to anonymity, since going through the court process and winning, we won. We testified in our own alter voices. It's the first time ever and we won.

[Ruby Jones]

I chat with Jenny about the trial, her new doco and what it's like to live with more than 2,000 alters in Tuesday's episode of 7am I'm Ruby Jones. Thanks for listening and we'll catch you then.