Australia Pursues Laws Mandating Renewable Energy for Data Centers

The Australian federal government is pursuing nationwide legislation to mandate that new data centers use renewable energy to protect energy reliability and household electricity costs. Energy Minister Chris Bowen stated the Commonwealth will use legislation to prevent a "race to the bottom" among states competing to attract data centers at the expense of emissions and reliability.

The proposed rules require new projects to prove they fully offset their power consumption with additional renewable energy sources. This move comes as data center electricity use is projected to increase from 2% to 6% of national consumption by 2030. Bowen emphasized that while data centers are welcome, those that increase costs to the rest of the system must pay those costs.

Six of the eight state and territory governments have agreed to the plan, but Queensland and the Northern Territory remain opposed. Queensland Treasurer and Energy Minister David Janetzki defended a market-led approach, arguing against forcing uneconomic investments that could ultimately lead to higher prices for businesses and households.