• National Cabinet agreed to develop nationally consistent mandatory standards for large data centres covering energy, water and land use
  • Commonwealth legislation is planned for early 2027 and will complement existing state and territory planning and approval processes

The fact

Australia’s National Cabinet has agreed to develop nationally consistent mandatory standards for large data centres covering energy, water, and land use. The Commonwealth intends to legislate the framework in early 2027 and says it will complement, rather than duplicate, state and territory planning and approval processes. The threshold defining a large data centre and the detailed compliance requirements have not yet been published.

The agreement follows a July proposal requiring large data centres to underwrite new power supply, pay their full share of grid-connection costs, reduce electricity use when required and improve water efficiency. AEMO forecasts data-centre electricity consumption in the National Electricity Market rising from about 5TWh in 2025–26 to 34TWh in 2035–36. Separately, the Australian Energy Market Commission is developing technical connection rules for large inverter-based loads, including data centres.

The assessment

National Cabinet has settled one point: the federal standards will sit alongside state and territory approvals rather than replace them. A developer may therefore secure planning permission for a site and still need to show that a large project meets national requirements on power, water and land use.

What remains unclear is which projects will be caught. Some developments are already in planning, others have approvals, and some are under construction. Until the government sets the size threshold, start date and transition rules, developers cannot know whether existing designs will need to change or whether the new obligations will apply only to later projects.

For BTW readers, that boundary matters more than the headline agreement. The effect of the standards will become clear when projects already moving through the system learn whether they must revisit power arrangements, water plans or site design before construction can continue.

What to watch

Watch for the threshold defining a large data centre, the commencement date and rules for projects already approved or under construction. Detailed energy and water requirements, together with the process states use to verify compliance, will show whether developers need to redesign existing projects or mainly apply the standards to new proposals.