Lines drawn on data centres’ energy and water use
Contributing to clean energy supply and minimizing water footprints will become national expectations for new data centers built on Australian soil.
Operators that invest more in employee training and provide affordable computing power to local startups and researchers can also expect preferential treatment.
The highly anticipated data center national guidelines are not legal requirements, but development proposals that meet expectations will be prioritized under federal regulatory evaluations.
Australia has the second largest data center construction in the world after the United States, and global investments are increasing to meet the computing needs of artificial intelligence.
The federal government welcomed the economic recovery and job creation, but the utilities’ massive energy and water needs gave policymakers pause.
Unions, environmental groups and clean energy sector organizations joined forces in February to demand an energy and water self-sufficient sector committed to developing workers’ skills.
Energy has become a particular focus as the country struggles to roll out renewables quickly enough to meet climate goals and supply emerging green export industries.
Data centers consume approximately two percent of electricity supplied from the grid, but this share is expected to triple by 2030 due to the rise of artificial intelligence.
In addition to bringing their own clean energy or storage to balance demand on the grid, operators will be expected to cover all power connection costs and support network stability.
Energy Minister Chris Bowen said it was important to get investment settings right to keep the electricity system safe and prices low.
“Data centers have great potential to support our grid and expand new renewable investments,” he said.
Sustainable water use will also be viewed positively in terms of protecting local drinking resources, and the use of recycled and non-potable water will be encouraged wherever possible.
Deputy Minister Andrew Charlton said national expectations would maintain society’s confidence in the fast-growing sector.
“We will do what is necessary to ensure that the growth of AI is sustainable and underpinned by a strong social license,” he said.
Work to implement the principles continues with state and territory governments and industry.
The federal opposition has criticized the government’s response to the AI infrastructure boom, saying Australia risks losing investments to rivals without faster planning processes and ready access to affordable and reliable energy.
Opposition industry spokesman Andrew Hastie supports using Australia’s abundant fossil fuels and uranium to power data centers and high-tech manufacturing.
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