Key facts
- Australia is proposing new federal regulations for datacentres aimed at managing their impact on power prices, water usage, and land use.
- Datacentre projects approved before new legislation is enacted next year will be exempt from these upcoming rules.
- The Australian Energy Market Operator forecasts a significant increase in electricity demand from datacentres by 2036.
- A proposed 90MW datacentre, Project Mars, near Sydney's CBD is currently under consideration by the New South Wales government.
- Community groups and The Greens are advocating for a moratorium on new datacentre approvals until the new regulations are in place.
Australia is facing potential accelerated datacentre construction as artificial intelligence firms seek to bypass upcoming federal regulations. Prime Minister Anthony Albanese is set to discuss new rules with the national cabinet, which aim to curb the impact of datacentres on power prices, water usage, and land allocation.
The proposed regulations would require datacentres to cover their electricity demands with renewable energy, manage connection costs, and minimize water consumption. They also stipulate that datacentres should be appropriately sized and located away from residential, school, and agricultural areas.
However, these rules will not apply retrospectively, meaning any project approved before the legislation passes next year will only be subject to existing state and territory laws. This exemption is driving concerns that developers may rush to secure approvals in the coming months.
The Australian Energy Market Operator (Aemo) has reported 225 datacentres are currently in development, with electricity demand from the sector expected to grow substantially by 2036. Despite this pipeline, a significant percentage of datacentre projects have historically been delayed or cancelled.
One notable project under consideration is 'Project Mars,' a proposed 90MW datacentre near Sydney's central business district, being developed by Goodman Group. The company is consulting with the community, which has shown strong opposition, particularly in an area already seeing significant datacentre development.
Community representatives and The Greens have called for a moratorium on new datacentre approvals until the new regulations are implemented, arguing for responsible government action to protect citizens and the environment. Urban planning experts suggest that developers might attempt to fast-track applications to avoid the new rules, but warn of potential political backlash and reputational damage.
Federal and state inquiries into datacentres are ongoing, with submissions being accepted, indicating continued scrutiny of the sector's expansion.