Albanese Proposes National Rules for AI Data Centres

Prime Minister Anthony Albanese is introducing national standards for the electricity and water use of AI data centres to prevent infrastructure growth from increasing household energy bills or compromising water security. The proposed causer pays rules would require data centre operators to provide their own renewable energy and gas peaking backups. These measures follow an Australian Energy Market Operator forecast projecting data centre power demand to increase seven-fold to 34 terawatt hours by 2035-36.

While the federal government seeks a consistent national framework, the plan has faced resistance from the governments of Queensland and the Northern Territory. Queensland Premier David Crisafulli has opposed the renewable energy mandates, arguing that energy sources should remain technology-agnostic. Energy Minister Chris Bowen has responded by stating the government will legislate to override any states or territories that refuse to sign on to the standards, warning against a race to the bottom among states competing for investment.

Other regions have taken different approaches. The New South Wales government launched a Data Centre Policy Framework to fast-track compliant projects, while the Toowoomba Regional Council in Queensland voted to block new data centres from accessing the city's drinking water supply. The broader legislative package will also include minimum standards for AI security, safety, and copyright protections for creatives. Shadow Energy Minister Dan Tehan has criticized the federal move, suggesting that overriding state rules could be unconstitutional.