Energy infrastructure firm Firmus has inked a 12-year wholesale energy supply agreement with Gunvor Group for 600 MW of firm electricity. The deal directly supports Project Southgate, a strategy to build large-scale AI Factory campuses across regional Australia.
Under the agreement, Gunvor will backstop the development of 1.2 GW of new renewable generation and battery storage capacity. This blend of firm power and clean energy aims to provide the stable, high-density electricity required by AI data centers while advancing grid decarbonization.
The projects are expected to drive significant capital expenditure and create hundreds of construction and operations jobs in South Australia. Firmus has not disclosed specific project locations or timelines, but the 600 MW supply agreement marks a critical step toward financing and building the associated infrastructure.
Geopolitically, the deal underscores Australia's push to position itself as a hub for energy-intensive AI computing, leveraging its abundant renewable resources. It also signals growing corporate demand for long-term, structured energy contracts—a trend that could reshape wholesale power markets and attract further investment in grid-scale storage and generation.
Critics argue that the energy demands of AI factories risk straining local grids and competing with residential and industrial users for firm capacity. Without detailed plans for transmission upgrades or demand management, the net benefit to South Australia's energy system remains uncertain.