Australia Doubles Down on Data Centers Using Renewable Power

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(Bloomberg) — Australia’s federal government will press on with a nationwide push to ensure new data centers use renewable energy, pledging to pass laws despite opposition to the move from some regional administrations.

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Prime Minister Anthony Albanese announced the plan last month, with the federal government getting agreement from six of the eight state and territory governments. Despite the lack of unanimity, Energy Minister Chris Bowen said on Wednesday he would be looking to pass laws to enforce the requirement.

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“While I always prefer to work with my state and territory colleagues, the Commonwealth will not be standing by and letting a race to the bottom of states falling over themselves to attract data centers at the cost of household bills, reliability or emissions,” Bowen said, referring to the federal government.

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Australia is in the middle of a massive build-out of data centers, with huge new investments helping support the economy. However, like in the US and other countries, that boom is causing rising community concern about how they will be powered and where the water to cool them will come from.

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“We will use all the power available to the Commonwealth, including Commonwealth legislation, to ensure that Australian households and Australian energy reliability is put first, even if some states have different ideas,” Bowen said. States would not be able to water down the national standard, he added.

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The federal, state and territory energy ministers met virtually last month to discuss the initiative, when Queensland state and the Northern Territory opposed most measures, including the introduction of a national set of regulations, according to a federal government statement at the time.

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“We look forward to discussing the Queensland approach at National Cabinet,” state Treasurer and Energy Minister David Janetzki said in a statement on Wednesday. “Queensland’s Energy Roadmap is delivering a market-led approach, and we will not force uneconomic investment into the system that will ultimately flow through to higher prices for households and businesses.”

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Australia is among a growing number of countries trying to regulate artificial intelligence without stifling innovation, while also ensuring adequate power supplies for the energy-hungry data centers that underpin the technology. Data centers use 2% of all national electricity consumption, according to the regulator, which forecasts that this will rise to 6% in 2030, according to Bowen. 

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“Data centers are welcome if they bring their own additional renewable energy,” he said. Albanese will announce more details soon, but the federal government is already working on rules to ensure that the cost of connecting centers to the power grid will not be passed to households, Bowen said.

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“If you cause the cost, you’ll pay the cost,” he said, saying no other nation had ensured that households don’t pay the costs of new centers. Projects will be mandated to prove that they are fully offsetting their power use with renewable energy sources that might otherwise not have been built, Bowen said. 

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