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Energy minister Chris Bowen has confirmed the federal government will override state and territory opposition to new national rules requiring AI datacentres to be powered by renewable energy. Speaking at the National Press Club on Wednesday, Bowen said the government would legislate as a commonwealth, noting that "the constitution is clear about the power of commonwealth legislation." He added, "I respectfully disagree with Queensland and the Northern Territory."
The announcement follows a meeting of state and federal energy ministers last week, at which Queensland and the Northern Territory opposed the proposed changes, while all other states backed the plan. The federal government's proposals, first outlined by Prime Minister Anthony Albanese last month, include binding standards for datacentre locations, energy use, water use, and grid connection costs.
Coverage comparison
ABC News reported that Northern Territory government minister Josh Burgoyne accused the Commonwealth of "overreach" after the federal government said it would block the development of gas-powered data centres. Burgoyne, whose portfolios include lands, planning, and environment, as well as corporate and digital development, told the ABC's Country Hour that "in the Territory we have a right to govern ourselves." He said the federal government was "overstepping into our territory and basically telling Territorians what they can and can't do," adding that the NT had a "competitive advantage" that the federal government was trying to take away.
The Guardian reported that Queensland and the Northern Territory rejected the federal government's plans, with Queensland's David Janetzki calling the proposal "underdeveloped ideas that hand increased power to Canberra." The Guardian's coverage also highlighted concerns from S&P Global, the economic rating agency, which warns that power use from datacentres could rise five-fold by 2035 to 10% of Australia's total consumption, and that a mismatch between datacentre delivery timelines and renewable projects could lead to energy bills skyrocketing.
Both ABC News and The Guardian noted that the NT government supports a gas-fired data centre boom, powered by the development of gas fields in the Beetaloo Basin.
Key claims
- The federal government plans to mandate the use of renewables and establish a national renewable energy offset policy for data centres. According to ABC News, the new laws would not permit any data centre proposal which relied entirely on gas, with Bowen stating, "If a data centre is proposed to only use gas, it will not meet the minimum national standards. And, it won't be able to register and it won't be able to proceed."
- The NT government supports a gas-fired data centre boom, powered by gas from the Beetaloo Basin. The NT recently set aside land near Darwin for a $40 billion proposal by Beetaloo Digital, a gas company's AI plan. ABC News reported that Beetaloo Digital's proposal could partner with renewable projects, though the extent of that partnership was not specified.
- Bowen said gas could play a role as a firming option, to provide consistent electricity to the facilities. He told the National Press Club, "The requirements are renewable energy, then sensible firming arrangements." He also said, "I don't want to appear as too antagonistic towards the NT government."
- The Australian Energy Market Commission advised that datacentres should have to show renewables certificates to ensure their connection doesn't tip the supply-demand balance and push up wholesale prices for everyone else. The commission warned that without rule changes such as those proposed by Bowen, the costs of bringing large datacentres online "will be paid for in part by customers" rather than big tech companies.
- According to a Guardian Essential poll, Australians are reluctant to embrace new AI datacentres, with less than a third saying they would be happy to have a facility in their area.