Australia to Legislate Mandatory Standards for Large Data Centres

The Australian government is developing mandatory national standards to regulate the energy, water, and land use of large data centres, with legislation expected by early 2027. This policy shift follows a July speech by Prime Minister Anthony Albanese and a subsequent agreement by the National Cabinet to address the environmental impact of an artificial intelligence-driven construction boom. There are currently 225 projects proposed or under development across the country, with total buildouts expected to reach A$150 billion by 2030.

Resource consumption is a primary driver of the new regulations. The Australian Energy Market Operator predicts that data centre power demand will rise from 3% of the main grid in 2025-26 to approximately 13% by the mid-2030s. The scale of this growth is exemplified by the proposed 1.2 gigawatt Mamre Road Data Centre in Sydney, which could become the country's largest single electricity user.

Significant disputes remain regarding resource forecasts and power sources. While industry modelling suggests water usage will reach 2% by 2030, Sydney Water Corporation estimates the draw could hit 25% of the city's supply within a decade. Additionally, while federal authorities advocate for clean power, the governments of Queensland and the Northern Territory prefer the use of gas, a conflict that remains unresolved.