• Large new data centres may have to support enough new power supply to match their electricity demand
  • Australia’s federal government has not defined which projects would be covered or how developers would prove compliance

The fact

Australia’s federal government plans to introduce mandatory standards for large new data centres. Covered facilities would have to support new power supply, limit water use, and improve energy efficiency. The government has not yet set the energy-use threshold that will determine which projects fall under the rules.

Queensland and the Northern Territory have opposed the proposed renewable-power requirement. Despite that disagreement, the Energy and Climate Change Ministerial Council agreed to continue developing the framework. The council does not require unanimous support.

Prime Minister Anthony Albanese has said new facilities should support additional renewable generation and firming capacity, including batteries, pumped hydro and gas. National Cabinet is expected to discuss the proposal in August, and the federal government plans to introduce legislation early next year.

The assessment

The proposed standards would move power planning earlier in the development process for covered data centres. Alongside securing a site and grid connection, developers may need to identify the additional generation, and firming arrangements that would support the facility’s electricity demand.

The government has not defined the energy threshold, the evidence developers would need to provide or which commercial arrangements would qualify. It is also unclear whether the same requirements would apply across Australia if Queensland and the Northern Territory continue to oppose the renewable-power element. Until those details are settled, developers cannot determine how the obligation should be incorporated into project planning.

For BTW readers, the framework could add a power-supply requirement to the early development of large Australian data-centre projects. Its practical effect will depend on whether the final rules provide a clear and consistent way for developers to demonstrate that additional supply has been secured.

What to watch

National Cabinet is expected to discuss the framework in August. Watch for the energy-use threshold, the evidence required to demonstrate additional power supply and whether the federal government changes the renewable-power requirement in response to state opposition. Legislation is planned for early next year.