Australia plans data centre rules as power use forecast to rise sevenfold

Australia's Prime Minister Anthony Albanese will use Wednesday's national cabinet meeting to push for new national laws governing data centre developments, aiming to balance economic benefits with grid and community concerns. The move comes as the Australian Energy Market Operator (AEMO) forecasts data centre power use will rise sevenfold by 2035-36, from 5 to 34 terawatt hours, consuming 13% of the National Electricity Market Source: The Guardian, The Next Web.

The proposal

Albanese plans a major piece of legislation next year to set national minimum standards for data centres, including requirements to avoid pushing up energy prices, meet infrastructure costs, and minimise water use. The rules would also ensure facilities are appropriately sized and located away from homes and schools Source: The Guardian. Projects already approved would be exempt, subject only to existing state laws Source: The Guardian.

The challenge

AEMO's report highlights the strain: data centres operate consistently, pressing the grid during off-peak hours when it runs thinnest Source: The Next Web. However, the outlook is not all dire—record new generation and storage connections have improved reliability, with about 9 gigawatts added in 2025-26 Source: The Next Web. Uncertainty remains, as more than a third of projects listed last year have been cancelled Source: The Next Web.

Reactions

Climate Council CEO Amanda McKenzie warns, "We've got one shot to get the rules right now and ensure that datacentre growth doesn't strain our grid and push up pollution" Source: The Guardian. Meanwhile, conservative governments in Queensland and the Northern Territory oppose national controls, preferring state oversight Source: The Guardian. The Commonwealth Bank estimates the buildout could reach A$150bn by 2030 Source: The Next Web.