Key facts
- Prime Minister Anthony Albanese plans to introduce national legislation for datacentre development next year.
- Datacentre electricity demand is projected to increase seven-fold by 2035-36, potentially reaching 13% of total consumption.
- New rules will aim to ensure datacentres do not increase energy prices, cover their infrastructure costs, and minimize water use.
- Developers will be required to minimize community impact and ensure appropriate site selection.
- Some conservative state governments, including Queensland and the Northern Territory, oppose federal mandates for renewable energy powering datacentres.
Prime Minister Anthony Albanese is set to address growing concerns over national datacentre development controls at a high-stakes national cabinet meeting. He plans to introduce significant legislation next year to establish national minimum obligations for datacentres, aiming to ensure economic benefits from AI and cloud computing are widely shared while mitigating environmental impacts.
The Australian Energy Market Operator (AEMO) forecasts a seven-fold increase in datacentre electricity demand over the next decade, potentially reaching 13% of total national consumption by 2035-36. This rapid growth is driven by AI and cloud computing reliance. AEMO's report indicates that while new generation and storage are improving grid reliability, the surge in datacentre power use remains a significant concern.
Climate Council CEO Amanda McKenzie has warned that datacentres could consume a substantial portion of Australia's electricity, stressing the need for correct regulations to prevent grid strain and increased pollution. The proposed federal rules would require datacentres not to push up energy prices, cover their infrastructure costs, and minimize water usage. They would also mandate consideration of local community impacts, including appropriate siting away from residential areas and schools.
However, the federal government faces potential opposition from conservative states like Queensland and the Northern Territory, whose leaders have signaled resistance to mandatory renewable energy sources for datacentres, preferring to include coal and gas. Projects approved before the new legislation takes effect will remain subject to existing state and territory laws.
In addition to datacentre regulation, Albanese will also discuss other pressing issues at the national cabinet, including the national gun buy-back program, actions to curb violence against women, and the H1 bird flu crisis. The Prime Minister also reiterated his stance against changing Western Australia's GST arrangements, which cost taxpayers over $6 billion annually.