Albanese eases demand that Australian data centers use only renewables

Australia’s government has secured a broad agreement with regional leaders on developing new data centers, but appears to have set aside a demand that they be powered by renewable energy.

Prime Minister Anthony Albanese announced a deal Wednesday on a national artificial intelligence development plan, with new legislation to be introduced early next year. However, Canberra appears not to have forced his government’s earlier renewables demand after two regions opposed it.

Queensland Premier David Crisafulli, who praised the deal struck on Wednesday, had argued that it should be left to his state government to choose how to supply electricity to data centers as it owns the whole power system.

“We believe that we can control our data sovereignty, protect the rights of local communities, and enable that energy mix to bring those data centers on,” Crisafulli said after the meeting with Albanese and the leaders of the other states and territories. He added that his state and the Northern Territory, which had also opposed the initial plan, differed from the rest of the country in this respect.

The Queensland energy minister’s office didn’t respond to a request for comment sent outside normal business hours.

“If there is surplus then that of course could be available” for data centers, Albanese told journalists after the meeting, speaking about Queensland and the Northern Territory, which he said were “in different positions from other states.”

“We came to a common position, which recognizes that all states aren’t exactly the same, and that was accommodated in the way that we normally do, in a flexible way,” Albanese said.

In its initial announcements on the national AI policy over the past few months, the federal government had touted a policy in which data center operators would be required to pay for their own energy supply. Energy Minister Chris Bowen said earlier this month that “data centers are welcome if they bring their own additional renewable energy,” threatening to legislate to enforce that standard nationally.

The federal and state governments will now work together “to develop consistent mandatory standards for data center energy, water and land-use, and support skills and training opportunities,” according to a statement released after the meeting.

Australia is in the middle of a rapid build-out of AI data centers, attracting investment due to its abundant land and strong renewable energy capabilities. Companies invested almost 9 billion Australian dollars ($6.5 billion) on data centers and servers in the first three months of this year.

Queensland has earmarked land for a more than 700-hectare data center and tech hub run by a Singapore-based developer. The project is estimated to cost more than AU$30 billion and tipped to be the largest of its kind in Australia, according to a recent report from the national broadcaster ABC.