Environmental and community groups have called for a pause on datacentre development until new regulations are in place after Anthony Albanese promised “greater clarity and speed” over their approval.
In his speech on artificial intelligence at the University of Sydney on Wednesday, the prime minister said Australia would create a legal obligation for large-scale datacentres to underwrite new power supply, pay their full share of grid connection and add as much energy to the grid as they take out of it.
The prime minister noted all three obligations “take in every level of government and their overlapping powers” but said the national standards would ensure governments were on the same page.
Deanna D’Alessandro, professor and director of the Net Zero Institute at the University of Sydney, said up until now the approach to datacentre regulation has been fragmented.
“The commonwealth is focused on sovereign digital capability, productivity, critical infrastructure resilience and decarbonisation,” she said.
“States are balancing economic growth with energy, water and regional development challenges. Local councils are dealing with the immediate impacts on land use, housing, traffic, amenity and community expectations.”
The challenge, she said, is coordinating priorities to ensure economic benefits are captured while social licence is maintained.
All state and territory ministers at energy and climate change ministerial council meetings are required to agree to the new standards before their adoption.
Although the majority of datacentres in Australia are in New South Wales and Victoria, at the May meeting Queensland was the single holdout on the proposal.
The Climate Council has warned Queensland’s reluctance could lead to a “state-by-state race to the bottom” on datacentre expansion.
“The AI-driven surge in datacentres will have a profound effect on our energy system, and unchecked, this growth could mean soaring prices and rampant climate pollution,” the Climate Council chief, Amanda McKenzie, said. “The government must adequately regulate datacentre growth to ensure it occurs in the best interests of Australians.”
The peak organisation for the sector, Data Centres Australia, has previously pushed back against suggestions operators should be 100% renewables powered. The chief executive, Belinda Dennett, told a NSW inquiry in May there was a desire to get to 100% but that trying “to match a renewable energy project timing and a datacentre timing is difficult”.
On Wednesday, Dennett said the devil will be in the detail but largely agreed with the prime minister’s position.
Moratorium calls continue
The new rules leave communities already facing datacentre development proposals with a level of uncertainty.
Five datacentres are planned for the northern Sydney suburb of Lane Cove and would take up 40% of its industrial land, the Lane Cove Responsible Planning Group has warned. Earlier this month, it joined other community groups in calling for a moratorium on new datacentre development until stronger protections are in place.
The group’s Sasha Titchkosky told Guardian Australia she welcomed the prime minister’s speech as a recognition of the need for national regulation and supports a national body to assess the power, water and infrastructure needs of the “highly extractive” industry.
But the announcement made a moratorium on current proposals even more necessary, she said.
“There shouldn’t be any new approvals given until this regulatory framework is established,” she said.
This week, the New York governor, Kathy Hochul, announced a one-year moratorium on hyperscale datacentre approvals in the US state.
The Greens’ communications spokesperson, Sarah Hanson Young, said Australia should have a similar moratorium on large datacentre development until the right rules are in place on energy, water use and environmental and community impact.
“Today’s announcement … is welcome, but with more than 90 datacentres already in the pipeline we cannot allow a free-for-all in the meantime,” she said.
