A new report from TBH, an independent advisory firm with more than 60 years’ experience supporting complex infrastructure projects across Asia-Pacific and the Middle East, is calling for a shift in how data centres are planned and delivered, with implications for Australia’s rapidly growing digital infrastructure sector.
As demand for data centres accelerates due to artificial intelligence, cloud computing and digitalisation, the report Powering Data Centres: Are Integrated Utility Precincts the Answer? highlights growing constraints around power, water, land and planning approvals.
According to the report, data centres are increasingly competing for limited energy and water resources, while also facing longer grid connection timeframes and rising community scrutiny. Without a more coordinated approach, these pressures risk slowing project delivery, increasing costs and undermining long-term sustainability outcomes.
The findings are particularly relevant to Australia, where TBH notes it has supported more than 100 hyperscale data centre projects across the Asia-Pacific region since 2010, working with governments and operators across the full project lifecycle.
The report proposes an integrated utility precinct model, which positions data centres as part of shared infrastructure systems rather than standalone developments. Under this model, key services such as renewable energy generation, storage, water treatment and cooling are planned at a precinct scale to improve efficiency, resilience and delivery outcomes.
Rob Hammond, Director and Global Data Centre Lead at TBH, shared that the next phase of global data centre growth will depend on how effectively facilities integrate with surrounding systems.
“Global data centre growth will be shaped by how effectively facilities integrate with surrounding energy, water and community systems,” Hammond said.
“Integrated utility precincts provide a pathway to move beyond incremental, site-by-site solutions and deliver infrastructure that is efficient, resilient and socially sustainable.”
The report identifies the model as a strategic response to increased demand accelerated by artificial intelligence, tightening utility constraints and rising decarbonisation expectations. It states that shared infrastructure can reduce duplication of assets, and enable lower capital and operating costs, and access to renewable energy and recycled water at scale.
Beyond benefits for operators, the model is also positioned as supporting governments, investors and communities by aligning data centre developments with broader environmental, social and governance frameworks and long-term strategies for utility-scale projects.
Powering Data Centres outlines core elements of an integrated utility precinct, including shared renewable generation and storage, precinct-scale recycled water systems, waste-heat reuse, circular economy principles and built-in resilience and redundancy.
The report draws on examples across Asia-Pacific, the United States, Europe and the Middle East, where elements of the model are already emerging. It notes that in Asia-Pacific and the United States, data centre clusters are increasingly pairing renewable generation, storage and recycled water systems to manage grid and water limitations.
In the Middle East, large-scale solar projects and emerging hydrogen initiatives are supporting high-intensity digital infrastructure, while in Europe, district energy schemes are integrating data centres into wider heat, power and water networks.
Stuart Cassie, Director and APAC Data Centre Lead at TBH, shared that the model could shift how data centres are utilised within infrastructure systems.
“Data centres can either be perceived as competitors for scarce resources or as catalysts for more resilient infrastructure systems,” Cassie said.
“Integrated utility precincts shift the narrative toward shared value and long-term system efficiency.”
