Data centres are booming

Australia's data centre boom is rapidly becoming one of the largest new construction markets for the electrical industry. 

Investment is accelerating across the country, particularly in NSW and Victoria, with further development emerging nationally. The scale can already be seen in NSW, where 15 data centre projects worth $51.9 billion are progressing, on top of around 90 data centres already operating across the state. Data centre investment in NSW has grown by an average of 65 per cent a year over the past three years and now represents around 12 per cent of all non residential building investment. 

Nationally, AEMO reports 162 operational data centres, with electricity consumption forecast to rise from around 2 per cent of grid supplied electricity today to around 6 per cent by 2030. 

This represents an enormous opportunity for electrical contractors across Australia, but it will also place significant additional pressure on an electrical workforce that is already in shortage, and on the contractors who have invested in employing and training the apprentices who will become our future electricians. 

NECA supports data centre investment. We want these projects built in Australia and we want Australian electrical contractors, electricians and apprentices to benefit.

But simply recruiting electricians and experienced apprentices away from existing contractors does not grow Australia's workforce. It moves the shortage from one part of our industry, and potentially one part of the country, to another. 

This is particularly concerning for small and medium contractors who invest heavily in recruiting, supervising and training first year apprentices, only to risk losing them to major projects once they become more experienced. 

There is also a training quality issue. Data centres can provide outstanding technical experience, but apprentices need broad exposure to different types of electrical work to develop into well rounded electricians.

NECA has written to the Prime Minister and is engaging with governments across Australia, industry and major stakeholders to have electrical workforce requirements built into Australia's approach to data centre development. We are proposing a National Data Centre Electrical Skills Framework focused on additionality, training quality and retention. 

We want major data centre projects to create genuinely new first year apprenticeships, support structured apprentice rotations, respect and protect the training capacity of small and medium contractors and provide Australian electrical contractors with meaningful opportunities to participate. We are also advocating for workforce development requirements to be considered as part of government planning, approval and facilitation processes for major data centre developments. Where projects create significant new demand for scarce electrical skills, they should also demonstrate how they will contribute to growing Australia's electrical workforce. 

NECA is also reviewing the South Australian apprentice transfer model and whether elements of this approach could provide greater recognition of the investment employers make in recruiting, supervising and training apprentices. The South Australian model recognises that an existing employer may have made a substantial investment in an apprentice before they transfer to another employer. It provides for prescribed transfer fees that increase according to the year of the training contract. 

NECA is considering whether this or a similar approach could provide appropriate recognition of the investment made by contractors while preserving an apprentice's ability to change employers. 

The data centre boom should leave Australia with more electricians, better trained electricians and a stronger electrical contracting industry.

NECA needs evidence from members across Australia to strengthen this campaign. 

If your business has lost electricians or apprentices to data centre projects or other major projects, experienced increased difficulty recruiting or retaining workers, faced significant workforce cost pressures, or experienced other impacts from the rapidly expanding major project pipeline, please contact NECA. 

We particularly want to hear from contractors who have invested in first year apprentices and subsequently lost them in their second, third or fourth year. 

Your experience will help us demonstrate the real impact on electrical contractors and develop practical solutions with Commonwealth, state and territory governments and industry.

Fill out the form below to help us ensure Australia's data centre boom grows our electrical workforce rather than simply competing for the workers and apprentices we already have.