The Australian Government Department of the Environment, Water, Heritage and the Arts (DEWHA) is currently implementing a strategy for energy efficiency of Information and Communication Technology (ICT) products. Significant progress has already been made in relation to personal computers (PCs), laptops and monitors and the next major sector to be considered in this strategy is data centres. This paper has been commissioned to explore the situation regarding energy efficiency of data centres in Australia, with particular consideration of the related ICT equipment, and to determine if sufficient evidence is available to support a more detailed study incorporating a regulatory impact statement on data centre energy efficiency.The paper provides a current snap-shot of the issues associated with energy efficiency in data centres. Section 3 outlines some technical background relating to data centres. Section 4 outlines data centre energy use and efficiency issues and provides an overview of the key concepts and terminology involved. Section 5 provides some international background including worldwide data centre energy consumption and growth trends and an outline of key initiatives underway in the U.S. and Europe.Section 6 provides an Australian context overview including some first pass (order of magnitude) estimates for energy consumption and potential efficiency savings along with discussion relating to government policy context. Section 7 provides a summary of the data centre energy efficiency issues covered and the conclusions that may be drawn. Finally, Section 8 outlines some potential options for consideration in the development of Australian data centre energy efficiency strategy in the context of overall ICT energy efficiency.