Albanese Reverses Renewable Mandate for AI Data Centres

Prime Minister Anthony Albanese reversed a federal demand that new AI data centres be powered exclusively by renewable energy during a national cabinet meeting in Sydney. The shift follows resistance from the Queensland and Northern Territory governments, which sought to maintain the use of coal and gas-fired power. Under the new flexible approach, the Northern Territory may use gas from the Beetaloo basin project, while Queensland will utilize its publicly owned networks.

Albanese stated the goal is to avoid having eight different regulatory systems across the country to better attract investment. This agreement marks a retreat from previous assertions by Energy Minister Chris Bowen that the federal government would use constitutional powers to override resisting states. The leaders agreed that while mandatory standards are necessary for investors, the priority is keeping energy costs low as data centre power demand is projected to increase seven-fold over the next decade.

The agreed framework also aims to protect citizens from rising energy bills and prevent the placement of server farms in residential areas. Draft legislation is expected by the end of 2026, with a target for passage in early 2027. In other cabinet business, leaders agreed to tighten national gun laws by banning 3D printed guns and restricting licences to Australian citizens, and allocated $125 million for a national biosecurity response to H5 bird flu.