Australia will require new data centers to use renewable energy, overriding two states' opposition. Data centers consume 2% of national electricity, a share forecast to hit 6% by 2030.
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Australia’s federal government will require new data centers to run on renewable energy, pushing ahead with legislation even as two states refuse to sign on. Energy Minister Chris Bowen said Wednesday he intends to pass laws enforcing the standard, after Prime Minister Anthony Albanese announced the plan last month.
Six of eight state and territory governments agreed to the national push. Queensland and the Northern Territory opposed most measures, including a uniform regulatory approach, according to a federal government statement at the time.
“While I always prefer to work with my state and territory colleagues, the Commonwealth will not be standing by and letting a race to the bottom of states falling over themselves to attract data centers at the cost of household bills, reliability or emissions,” Bowen said.
Australia is in the middle of a massive data center build-out, with billions of dollars in new investments supporting the economy. The boom has stirred community concern about power and water use, mirroring tensions in the US and other countries.
Data centers consume 2% of all national electricity, the regulator said. Bowen said that share will climb to 6% by 2030.
“We will use all the power available to the Commonwealth, including Commonwealth legislation, to ensure that Australian households and Australian energy reliability is put first, even if some states have different ideas,” Bowen said. States cannot water down the national standard, he added.
Queensland Treasurer and Energy Minister David Janetzki pushed back. “We look forward to discussing the Queensland approach at National Cabinet,” he said in a statement Wednesday. “Queensland’s Energy Roadmap is delivering a market-led approach, and we will not force uneconomic investment into the system that will ultimately flow through to higher prices for households and businesses.”
The federal government is already drafting rules to ensure data center grid-connection costs are not passed to households, Bowen said. “If you cause the cost, you’ll pay the cost,” he said, adding that no other nation has shielded households from such costs.
Projects must prove they are fully offsetting their power use with renewable energy sources that would not have been built otherwise, Bowen said. Albanese will announce more details soon.
The standoff sets up a test of federal power over energy regulation. Queensland’s market-led approach clashes with the Commonwealth’s push for a national standard, leaving data center developers facing uncertain rules across jurisdictions. For operators like Equinix and AirTrunk, the outcome could shape where they build and how they secure power purchase agreements.
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