Key facts
- Queensland and the Northern Territory have rejected federal government plans to mandate renewable energy use for AI data centres.
- The federal government intends to legislate binding standards for AI companies, including on locations and energy use.
- Data centres would be required to generate renewable energy, minimise water use, and maximise energy efficiency.
- S&P Global warned that data centre power consumption could increase five-fold by 2035, potentially leading to higher energy bills.
- Queensland argued the proposals were underdeveloped and handed increased power to Canberra.
- All states, except Queensland and NT, agreed that data centres should offset their energy demands with renewables.
Queensland and the Northern Territory have rejected the federal Labor government's proposals to mandate that AI data centres use renewable energy and offset their power consumption. The states argue the federal government's plans are "underdeveloped ideas that hand increased power to Canberra."
Prime Minister Anthony Albanese has pledged to legislate binding standards for AI companies, requiring them to generate renewable energy, minimise water use, and maximise energy efficiency. He stated there would be a "legal obligation" for new data centres to underwrite new power supply and pay for grid connection costs.
S&P Global has warned that power consumption from data centres could rise five-fold by 2035, potentially accounting for 10% of Australia's total energy use. The agency also highlighted a mismatch between data centre delivery timelines (18-24 months) and renewable project timelines (three to five years), which could lead to increased energy bills and wholesale prices.
Despite the opposition from Queensland and the NT, federal government sources indicated that work on nationally consistent regulations would continue. Federal Energy Minister Chris Bowen is expected to provide further details on the government's plans in upcoming addresses and meetings.