The Australian federal government plans to implement national energy and water standards for large AI data centres, overriding opposition from the Queensland government, ABC News (Australia) reported.
Queensland Premier David Crisafulli has pledged to resist rules that would require data centres to source power from new renewable energy projects backed by gas. He instead favours a technology-neutral approach that would not exclude coal and gas.
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Despite this stance, the federal government expects to settle the new standards at a national cabinet meeting on Wednesday and, if necessary, legislate to override Queensland and any territories that do not agree.
Federal Energy Minister Chris Bowen has indicated the government will pursue “causer pays” energy rules for major facilities next year regardless of unanimous agreement from states and territories.
He stated that, while seeking consensus, the government would legislate to override any state opposition.
Bowen said: “The Queensland government’s made their views pretty clear; we disagree with them, and we’re proceeding without them.”
The Minister criticised Queensland’s preference for allowing data centres to choose any energy source. He said the government’s approach aims to balance investment with protecting consumers from rising energy bills and potential reliability issues.
The federal Coalition has questioned the government’s authority to override state rules, with Shadow Energy Minister Dan Tehan warning of possible constitutional issues. Tehan also raised concerns about the legal uncertainties involved in using federal powers, suggesting the government may rely on corporations law.
Crisafulli stated that Queensland would develop its own regulatory framework for data centres, emphasising community and council involvement in project approvals.
Under the Queensland proposal, data centres would need to complete social impact assessments and establish community benefit agreements before submitting applications, mirroring requirements for battery storage and solar projects.
The federal government aims for data centres to independently arrange their energy supply, citing US examples where local opposition to data centre developments has disrupted projects due to grid stress and water concerns.
Establishing minimum national standards is also expected to provide investment certainty and encourage further renewable energy project commitments.
Federal figures show data centre energy demands are set to triple within four years, with planned investments over the past three years valued at more than A$140bn ($100bn). The government also seeks to boost the number of renewables projects reaching final investment decisions, noting that at least nine have withdrawn despite support through the Capacity Investment Scheme.
Tehan criticised the government’s approach, arguing that mandating renewables for data centres could undermine social licence and risk greater community backlash by linking controversial energy and infrastructure policies.
