Prime Minister Anthony Albanese is seeking an agreement with the national cabinet on federal regulations for data centres at a meeting on Wednesday. These proposed rules aim to ensure new data centres avoid increasing power prices, including by bringing renewable energy to the grid to meet their electricity demands. They will also require data centres to cover their own connection costs and minimise water usage.
Additionally, developers will need to ensure their data centres are appropriately sized and located away from schools, homes, potential housing, or agricultural areas. However, the new regulations will not be retrospective, meaning projects approved before the legislation passes next year will only be subject to existing state or territory laws.
The Australian Energy Market Operator (Aemo) reported on Tuesday that 225 data centres are currently in development. Electricity demand from these is projected to increase from 5 to 34 terawatt hours by 2036. While there is uncertainty regarding the number of projects that will proceed, some currently in the pipeline could receive approval before the new rules are implemented.
For example, the New South Wales government is considering a 90MW data centre, named Project Mars, about 9km from Sydney's CBD. This three-storey centre, covering 22,000sqm, is planned to use existing power and 3.5ML of water daily from Sydney Water. It will include 200kW of solar panels, with the developer exploring further renewable generation opportunities.
Experts, including Professor Crystal Legacy from the University of Melbourne, suggest developers may try to secure approvals before the new regulations come into play. There are also calls for a moratorium on approvals until the new rules are in place, with the Greens having previously advocated for this.