Firmus says it will pay “whatever the cost is” for renewable energy and grid upgrades for its Tasmanian AI factories, telling an inquiry it expects to pay above household rates.
Firmus’ GM of Energy Paul Grzinic told the parliamentary inquiry into AI data centres yesterday that Hydro Tasmania’s published rate for 2032 was around $106 a megawatt-hour for a flat load, compared with about $85 for the average Tasmanian customer.
“The cost to develop and firm new renewables is significantly higher than the $106,” he said.
“We will pay that full rate. We will pay whatever the cost is.”
Grzinic said Firmus was finalising negotiations with Hydro Tasmania for a mix of wind, solar, storage and dispatchable generation to supply its 444-megawatt load across three sites and all of it would be in Tasmania.
Asked whether it would pay for TasNetworks’ planned $370 million George Town substation upgrade if its 288-megawatt Bell Bay facility went ahead, Grzinic said Firmus would “cover any augmentation costs attributable to our load”.
Aurora Energy Chief Executive Nigel Clark told the inquiry data centres were one of the few industries that could “afford to pay what the true price of energy is” to bring on new renewable projects.
He said new demand would not push up power prices if new supply came with it.
“If you didn’t have the increase in supply, then obviously it could be a different story,” he said.
Clark said Aurora had offered Firmus a three-year and a five-year deal for its St Leonards AI factory and Firmus chose the shorter contract, signed in March for 104 megawatts.
He said Firmus had provided a bank guarantee as security and Aurora did not “hold concerns” about its ability to pay.
Firmus also ruled out running its 276 backup diesel generators at Bell Bay outside of emergencies.
“We are straight ruling it out, using it when it’s commercially convenient,” Grzinic said.
“It would not be commercially convenient to use diesel to power a data centre.”
Firmus is appealing a George Town Council condition limiting the generators to emergency use and Grzinic said it was seeking “clarification” because the definition of an emergency was “quite broad”.
Greens MP Tabatha Badger said Tasmanians would find it hard to understand why the company was appealing the condition if it only planned to use the generators in emergencies.
Badger also asked Firmus’ co-founder Tim Rosenfield who Firmus’ tenant was, saying Meta “gets mentioned very frequently”.
“Ultimately, we are our own tenant,” Rosenfield said.
He said it was “not normal practice” for data centre developers to disclose their customers, for security or contractual confidentiality reasons.
“It’s just not an industry norm and I don’t think it’d be something that our customers would be particularly happy with us doing,” he said.
Minister Felix Ellis later told the inquiry the government did not “necessarily have access to that sort of information”.
Independent MP Helen Burnet asked how Firmus would deal with e-waste from its facilities.
Rosenfield said there was “no PFAS (per- and polyfluoroalkyl substances) in anything that we do” and the AI servers ran “for over a decade” and hardware at the end of its life was mostly recycled.
Burnet asked what happened to hardware waste and oil removed from Firmus’ decommissioned St Leonards facility.
Rosenfield said everything went through “an approved process” and was recycled or recovered by a contractor and the committee asked the company to provide more detail.
While the inquiry sat, students protested outside parliament calling for AI regulation.
The hearing comes after Firmus scrapped its planned sharemarket float last month.
More than 9,000 people signed a parliamentary petition calling for a pause on new AI data centres and the Environmental Defenders Office told the inquiry last week there should be a moratorium on approvals for large data centres until planning and environmental laws are reformed.
