Ageing infrastructure has put the shadowy Australian Signals Directorate, which counters cyber espionage, intercepts foreign communications and gives intelligence to the military, in jeopardy of systems failures risking government security.

Defence has told the Parliamentary Standing Committee on Public Works scrutinising the $75m proposal that much of the critical infrastructure at the agency's two Russell buildings had reached or exceeded its design life.

"If the infrastructure upgrade works are not undertaken, there is a significant risk of a major failure to critical systems and the consequent shutdown of ASD capability and operations," the Defence Department said.

The government referred the upgrade, to be funded by the Defence Integrated Investment Program, to the parliamentary committee for inquiry on March 2.

Defence's warnings come after the federal government said the ASD was forced to rely on diesel backup generators when the nation's power supply came under intense pressure during last month's heatwave.

It warned last week the nation's cyber security was put at risk when the Department of Defence was asked to help with load shedding during soaring temperatures on February 10.

Dan Tehan, the minister responsible for cyber security, said the ASD shifted to generators as a precautionary measure because it was concerned about the reliability of the grid.

Defence told the parliamentary committee that the proposed works were 'mission critical', or 'priority one', warning that failure to upgrade would be a 'high risk' to ASD operations and have a significant impact on security.

"If any priority one engineering service (electrical or mechanical) fails, the building would become seriously compromised."

Its diesel emergency power system was undersized and had surpassed its service life, Defence said.

An upgrade would give the spy agency a new diesel generator house, reconfigured high voltage electrical equipment, new electrical infrastructure, and an upgraded cooling, heating and air distribution system for communications and server rooms.

The works, if approved, would begin in mid 2017 and finish three years later.

Another option, constructing a new building, would cost $800m.

While financially viable in the medium- to long-term, other Defence capital works needed to use available government funding, the department said.

"Programming is in place to consider the construction of a new facility for ASD in the next decade but that will not address the immediate priority of protecting the current critical infrastructure to ensure ongoing operational requirements," it said.

"The existing operational requirements of ASD are critical to the government's security requirements and require urgent remediation to minimise risk of the failure of critical engineering services and to maintain efficient and effective operations until a new building is constructed."

Mr Tehan said the upgrades would lower the ASD's running costs.

"The ASD is essential to Australia's national security and these improvements will help keep Australians safer by improving the efficiency and effectiveness of operations," he said.

The ASD, whose mission statement is "Reveal their secrets - protect our own", relies on high-tech computing, and is thought to be extremely energy intensive.

Submissions to the parliamentary committee are open until March 29.