Think of the electricity grid as the buffet at your cousin’s wedding. Everyone’s happily helping themselves, there’s plenty to go around, and then suddenly the AI crowd walks in. They’re hungry, they’re quick, and they’ve got industrial‑sized plates.

It’s not that the kitchen can’t keep cooking. It’s that we didn’t expect this many people, eating this much, this fast.

A Growing Appetite We’re Underestimating

The International Monetary Fund reckons that global data‑centre power demand could triple by 2030, reaching levels similar to what the whole of India uses today. In the U.S., McKinsey says data centres could chew through 11–12% of all electricity by the end of the decade.

Australia’s no different.

Some estimates say data centres could be taking up to 15% of our national electricity by 2030 if we go full steam ahead on sovereign AI ambitions without upgrading the grid.

Subsidies, Retirements = A Pinch for Households

Some politicians are pulling back renewable subsidies. In theory, that’s just letting the market stand on its own two feet. In practice, if we’re also retiring coal and gas baseload plants at the same time, it’s a bit like taking the training wheels off your bike while also removing the tyres.

Extra AI‑driven demand is already pushing electricity bills higher.

In the U.S., Ohio households living near new data‑centre clusters are paying an extra $20–$27 a month. In some U.S. power markets, capacity prices have spiked over 800%.

Australia’s risk is the same: if grid investment can’t keep up, households will pay more, businesses will grumble, and the “planned” outages won’t feel very planned.

It’s Not Just About AI

AI is just the latest power‑hungry guest at the table.

Add electric vehicles, electrified industry, and the ongoing retirement of old power plants, and you’ve got a recipe for a grid that’s constantly running to stand still.

Pulling renewable subsidies isn’t necessarily the villain here, it just exposes the true cost of generating reliable electricity. Without proper planning, the bill lands in the lap of the consumer.

What Needs to Happen

• Don’t retire baseload without a replacement plan. It’s common sense, but somehow still worth saying.
• Make big power users (like data centres) co‑invest in the generation and transmission they’ll need. Not just “plug in and walk away.”
• Speed up grid connection approvals. Waiting years for new transmission is like booking your hairdresser for 2028.
• Match data‑centre builds with local generation. Solar next door is better than diesel down the road.

How We’re Thinking About It from an Investment Perspective

From our seat, this isn’t just an energy‑planning issue, it’s an investment one. If you believe the forecasts (and we do and think they are actually too conservative), then power demand is going one way: up.

That has implications across our Stellan Capital 5‑D Thematics:

• Digitisation – AI and cloud growth means more data centres, more chips, more networking. The companies building and running these facilities — and the infrastructure that feeds them — are in long‑term growth mode.
• Decarbonisation – The clean‑energy build‑out isn’t optional; it’s necessary just to keep the lights on. That includes renewables, grid‑scale storage, and yes, nuclear in some markets.
• Demographics – An ageing population will demand more stable, reliable power (especially in healthcare and aged care infrastructure). That puts a premium on secure energy supply.
• Decoupling – Nations will increasingly want sovereign energy and computing capacity. This favours local manufacturing of power hardware, batteries, and high‑performance computing gear.
• Defense – Energy security is national security. Expect more policy support for domestic energy production and transmission resilience.

In short, we’re looking at:

• Grid infrastructure and transmission companies – The “roads” of the power system.
• Utility‑scale renewable developers and storage providers – Solar, wind, batteries.
• Select commodity plays – Copper, lithium, uranium, the building blocks of the energy transition.
• Specialised technology providers – From power‑efficient chips to cooling systems for data centres.

This Topic is on Fire and AI is just the accelerant

We see this as a decade‑long tailwind, not a one‑year trade. The underlying energy‑demand trend is bigger, broader, and more durable.

If you have any questions as to how this relates to your portfolio with us, please contact us to discuss.