Australia’s ‘World-First’ Data Center Rules Face First Hurdle

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessAustralia's 'World-First' Data Center Rules Face First HurdlePrime Minister Anthony Albanese’s proposed “world-first” environmental and energy controls for Australia’s A$150 billion ($105 billion) data center pipeline will face their first test Tuesday, when federal, state and territory energy ministers meet to discuss guardrails for the booming sector.Author of the article:Ainslie Chandler and James Mayger You can save this article by registering for free here. Or sign-in if you have an account.A NextDC Ltd. data center in Sydney, Australia. Photo by Brent Lewin /Photographer: Brent Lewin/Bloomb(Bloomberg) — Prime Minister Anthony Albanese’s proposed “world-first” environmental and energy controls for Australia’s A$150 billion ($105 billion) data center pipeline will face their first test Tuesday, when federal, state and territory energy ministers meet to discuss guardrails for the booming sector.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountMinisters will meet virtually to discuss the proposed curbs as Australia’s rapidly expanding data center industry — fueled by demand for artificial intelligence and hyperscalers including Microsoft Corp. and Meta Platforms Inc. — attracts opposition from community and environmental groups.New data centers would need to add at least as much electricity generation to the grid as they consume, Albanese said in a policy speech earlier in July that laid out plans to embrace the sector while shaping how it develops. Bringing these issues into a single national framework would be a global first, he added.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againHe said operators would be expected to build renewable generation, minimize water use, maximize energy efficiency and fund any additional water infrastructure required, though he provided few details on how the policy would work. Australia is among a growing number of countries trying to regulate AI without stifling innovation while ensuring adequate power supplies for the energy-hungry data centers that underpin the technology. A surge in data center investment is also helping support the country’s slowing economy.Australia is emerging as one of Asia’s top locations for data center construction due to its high potential for renewable energy, stable political environment and strong connectivity with the rest of Asia via low-latency submarine cables, Bloomberg Intelligence analysts led by Matt Ingram said in a June report. Data center investment could hit A$150 billion by 2030, Commonwealth Bank of Australia associate economist Lucinda Jerogin wrote in a note. Six gigawatts of potential capacity are planned, with demand driven by appetite for hyperscale cloud and AI infrastructure, she said. The country was second only to the US in terms of dollars invested in the sector in 2024, according to a report from real estate group Knight Frank.Most Australian state and territory governments have expressed support for controls like those outlined by Albanese, though Queensland could be a holdout. The state doesn’t support the imposition of renewable power requirements in order to remain an attractive market for investors, Premier David Crisafulli said prior to Albanese’s policy announcement. All states and territories must support the federal policy for it to proceed. Crisafulli’s office did not respond to requests for comment from Bloomberg. The measures enjoy public support. A YouGov survey commissioned by Australia’s Climate Council found that 82% of respondents agreed that new data centers should be made to pay for extra renewable energy and storage infrastructure that meets their power needs. This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.National rules on data centers would stop states and territories from competing with each other, according to Rob Nicholls, a senior researcher at the University of Sydney’s Centre for AI, Trust and Governance.“The policy the PM has announced doesn’t work unless there’s buy-in from all the states and territories,” Nicholls said. “Part of the reason you have a policy is to avoid a race to the bottom from the states.”Chief Executive Officer Belinda Dennett of industry group Data Centres Australia — whose members include Google, AirTrunk and Microsoft Corp. — said the group is supportive of the principle that new electricity demand should be backed by new supply, with many operators and customers already underwriting renewable energy. Still, the industry wants clarity on three key issues, Dennett said, including whether the compliance obligation falls on the data center operator or the tenant, when that obligation takes effect, and what energy usage is being offset — the facility’s actual electricity consumption or its nameplate capacity. Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.