How Melbourne AI Energy Systems Tackle Demand

This article is brought to you by Melbourne Convention Bureau (MCB) supported by Business Events Australia.

As artificial intelligence accelerates global demand for compute, a parallel constraint is emerging with equal urgency: energy.

From hyperscale data centers to electrified industries, AI is driving a step change in electricity demand. This is not a future challenge, it is a present, system-level issue requiring coordinated action across energy, infrastructure, and engineering disciplines.

Around the world, the question is no longer whether AI will scale, but whether energy systems can scale with it.

Melbourne, Australia is moving beyond participation to become a globally connected leader helping define how these challenges are addressed.

A national challenge with global implications

Australia’s ambition to lead in artificial intelligence is sharpening focus on the infrastructure required to support it. Data centers are projected to account for up to 11 percent of the nation’s electricity consumption by 2035, placing increasing pressure on generation, transmission, and system reliability.

At the same time, insight from the IEEE Power and Energy Society (PES) highlights that meeting energy demand from AI and digital infrastructure is one of the most significant challenges facing engineers over the next decade.

The implications are clear. In addition to computing challenges, AI poses major energy systems challenges.

“As artificial intelligence continues to scale globally, the challenge is no longer just computational power, it is the energy systems required to support it” —Professor Thas (Ampalavanapillai) Nirmalathas, University of Melbourne

Why Melbourne is leading on the global stage

Victoria has developed one of the most advanced and integrated energy ecosystems in Australia and globally, spanning renewable generation, battery storage, grid modernization, and advanced materials.

What distinguishes Melbourne globally is how these capabilities are connected and applied at system scale.

The city brings together world class engineering research, a rapidly evolving clean energy sector, advanced digital infrastructure, and strong alignment between government, industry, and academia. This convergence is critical in the AI era, where energy, networks and computing systems must be designed together.

Victoria’s coordinated investment across these areas is positioning Melbourne not only as a national leader, but also as a reference point in the global energy system transformation.

Engineering the systems behind the AI economy

The challenge ahead is that generating more power won’t be enough, as engineers need to design systems that respond dynamically to new patterns of demand.

Three priorities are emerging globally:

• Aligning data center development with grid capacity and renewable supply
• Embedding flexibility through storage, demand response, and system optimization
• Balancing digital growth with decarbonization and long-term reliability

Addressing these priorities requires engineering expertise to be embedded earlier in planning ensuring energy systems, digital infrastructure, and policy are designed in parallel.

Melbourne’s strength lies in its ability to integrate this expertise across research, infrastructure, and real-world application.

Melbourne Connect is a University of Melbourne–led innovation precinct, supported by government and industry, designed to bring together research, business and policy to deliver real-world solutions.Atlantic Group

Research leadership shaping global solutions

At the centre of this capability is the University of Melbourne, where interdisciplinary research is advancing the systems required to support AI driven energy demand.

Through the Melbourne Energy Institute, for example, researchers are examining how energy technologies interact across entire systems from generation and networks through to end use.

“As artificial intelligence continues to scale globally, the challenge is no longer just computational power, it is the energy systems required to support it,” says Professor Thas (Ampalavanapillai) Nirmalathas, Dean of the Faculty of Engineering and Information Technology at the University of Melbourne.

“This is driving a new level of convergence between digital infrastructure and power systems engineering, where integrated, system level thinking is essential.”

Converging energy, networks and AI

Melbourne’s leadership is further strengthened by world-class interdisciplinary facilities such as the Smart Grid Lab in the Department of Electrical and Electronic Engineering, which enables real-time simulation of power systems, allowing engineers to test how solar, batteries, electric vehicles and other distributed resources interact within future grids. This supports the design of more resilient, efficient energy systems before they are deployed at scale.

Melbourne’s Smart Grid Lab in the Department of Electrical and Electronic Engineering enables real-time simulation of power systems. University of Melbourne

These capabilities will become increasingly important as data centers are integrated into the grid.

“AI driven demand is not only increasing computing requirements, but also placing new pressures on underlying energy systems,” says Glen Farivar, Senior Lecturer in Power Electronics at the University of Melbourne. “Designing these systems together is essential to achieving both performance and sustainability outcomes.”

This reflects a critical shift. Future infrastructure must be co designed across energy and digital systems, not developed in isolation.

A living ecosystem delivering real-world outcomes

Victoria’s broader energy ecosystem is translating these insights into practice.

Investment in renewable energy, grid infrastructure and storage is enabling higher levels of clean energy while maintaining reliability. Battery deployment is supporting the flexibility needed to manage both renewable variability and growing AI-driven demand.

At its core, Melbourne offers an integrated environment where research, industry and government collaborate to solve complex system challenges.

Why engineering collaboration matters

Solving the energy demands of the AI era cannot be achieved in isolation.

It requires engineers, researchers, utilities, and policymakers to work together earlier and more often. More than ever, engineering collaboration is a critical enabler of future energy systems.

Environments that bring together global expertise are becoming essential to how solutions are designed and delivered.

“Developing future energy systems that are affordable, sustainable, and resilient is a truly grand challenge” —Professor Pierluigi Mancarella, University of Melbourne

In this context, the University of Melbourne is co-leading, alongside Johns Hopkins University and Imperial College London, one of only seven Global Centres in Climate Change and Clean Energy. Through the Electric Power Innovation for a Carbon Free Society (EPICS) Centre, the University is also the Australian technical lead in advancing future energy systems, with EPICS the only Global Centre focused on future energy infrastructure.

The new Electric Power Innovation for a Carbon-Free Society (EPICS) Centre will address challenges in clean energy production and storage.University of Melbourne

“Developing future energy systems that are affordable, sustainable, and resilient is a truly grand challenge,” says Professor Pierluigi Mancarella, Chair Professor of Electrical Power Systems at the University of Melbourne and Australian director and international co-director of EPICS.

“As electricity grids are increasingly becoming the backbone of future energy systems, optimizing their interactions with other sectors, including AI and digitalization, and fostering interdisciplinary and international collaborations are essential,” he adds.

Global conferences as part of the solution

International conferences are increasingly recognized as critical platforms for advancing engineering solutions at scale. Melbourne’s ability to convene global expertise is central to its leadership.

In 2027, the city will host the IEEE PES Generation Transmission and Distribution (GTD) Asia 2027 Conference and Exposition, bringing together engineers, utilities, researchers and policymakers from across the world to address the challenges shaping the future of power systems.

IEEE PES GTD Asia 2027 Melbourne Committee (left to right): Dr. Mehdi Ghazavi Dozein (Monash University), Dr. Glen Farivar & Professor Pierluigi Mancarella (University of Melbourne) , Dr. Mohammad Mohammadi (Australian Energy Market Operator (AEMO)).MCB

“Melbourne offers a unique environment where world-class research, industry capability and policy leadership come together,” notes the IEEE PES GTD Asia 2027 Local Organising Committee, which includes Professor Pierluigi Mancarella and Dr. Glen Farivar from the University of Melbourne, as well as Dr. Mehdi Ghazavi Dozein of Monash University and Dr. Mohammad Mohammadi of the Australian Energy Market Operator.

“Hosting this event creates an opportunity to advance global collaboration on the systems and technologies required to deliver the energy transition at scale.”

These forums enable knowledge exchange, standards development and interdisciplinary collaboration, accelerating progress on complex engineering challenges.

Attendees view a digital installation at AIME 2025 at Melbourne Connect.MCB

Why Melbourne, and why now

As AI, electrification and digital infrastructure converge, the future of global energy systems will depend on the ability of engineers to collaborate and innovate at scale.

Melbourne provides a proven platform for that collaboration, combining world-class research, a rapidly evolving energy ecosystem, and the infrastructure to connect global expertise.

Melbourne Convention Bureau, IEEE Communications Society, and University of Melbourne Representatives.University of Melbourne

For IEEE members, hosting a conference in Melbourne is more than an event decision.

It is an opportunity to engage with a globally connected engineering community and contribute directly to solving one of the most significant challenges facing the profession today.

Through the support of the Melbourne Convention Bureau, professionals can access tailored, free support to bid for and deliver international conferences, bringing global expertise together in a city actively shaping the future of energy systems.

To explore hosting your next conference in Melbourne, contact the Melbourne Convention Bureau at info@melbournecb.com.