Energy ministers meet Tuesday to debate 'world-first' data center rules requiring new facilities to add renewable generation. Queensland could block the policy.
Prime Minister Anthony Albanese's proposed environmental and energy controls for Australia's A$150 billion ($105 billion) data center pipeline will face their first test Tuesday. Federal, state and territory energy ministers meet virtually to discuss guardrails for the booming sector.
The policy, which Albanese called a global first, would require new data centers to add at least as much electricity generation to the grid as they consume. Operators would need to build renewable generation, minimize water use, maximize energy efficiency and fund any additional water infrastructure, though the prime minister provided few details on implementation. The controls are designed to manage the rapid expansion of data centers fueled by AI demand and hyperscalers including Microsoft Corp. and Meta Platforms Inc.
Australia is emerging as one of Asia's top locations for data center construction, driven by high renewable energy potential, a stable political environment and strong connectivity with the rest of Asia via low-latency submarine cables, Bloomberg Intelligence analysts led by Matt Ingram said in a June report. Data center investment could hit A$150 billion by 2030, Commonwealth Bank of Australia associate economist Lucinda Jerogin wrote in a note. Six gigawatts of potential capacity are planned, with demand driven by appetite for hyperscale cloud and AI infrastructure, she said. The country was second only to the US in terms of dollars invested in the sector in 2024, according to a report from real estate group Knight Frank.
Most state and territory governments have expressed support for the controls, though Queensland could be a holdout. Premier David Crisafulli said prior to Albanese's policy announcement that the state does not support the imposition of renewable power requirements in order to remain an attractive market for investors. All states and territories must support the federal policy for it to proceed. Crisafulli's office did not respond to requests for comment from Bloomberg.
The measures enjoy public support. A YouGov survey commissioned by Australia's Climate Council found that 82% of respondents agreed that new data centers should be made to pay for extra renewable energy and storage infrastructure that meets their power needs.
MSFT stock page and META stock page are among the hyperscalers driving the data center buildout. Microsoft's Alpha Score sits at 60/100, labeled Moderate, with the stock up 1.94% to $389.10. Meta's Alpha Score is 64/100, also Moderate, with shares down 0.22% to $593.87.
The meeting Tuesday will determine whether the policy can move forward or requires renegotiation with Queensland. A delay would leave Australia's data center boom operating under existing state-level rules, which vary widely.
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