During a major speech on AI earlier this month, Prime Minister Anthony Albanese said the government wanted the next generation of data centres to build “new renewable generation and firming” to strengthen the nation’s energy resilience.<\/p>\n
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A new national framework for large-scale AI data centres will focus on mandatory energy rules. (Supplied: Cloud Carrier)<\/p>\n
The government is pursuing batteries, pumped hydro, and gas as firming energy technology, which is used to stabilise the grid when renewables such as solar and wind are unavailable.<\/p>\n
But the Coalition says a moratorium on nuclear power is deterring investment in Australia.\u00a0<\/p>\n
Under the government’s proposed mandatory standards, new data centres will be required to underwrite new power supply, minimise water use, and maximise energy efficiency.<\/p>\n
It is understood the government will use a yet-to-be-determined energy threshold to decide which future data centres are captured by the mandatory standards.<\/p>\n
The plan has already hit a snag, with Queensland and the Northern Territory signalling yesterday they will not back national standards requiring facilities pursue renewable power.\u00a0<\/p>\n
‘Not all data centres are created equal’<\/p>\n
Data centres that support AI technology typically have greater energy and space requirements than traditional data centres used to store and process information, and according to recent analysis from McKinsey and Company, will account for 70 per cent of data centre demand from 2025\u20132030.<\/p>\n
The prospect of large-scale facilities cropping up in Australia’s cities and regional areas has sparked community concern, especially around higher power prices and potentially harmful impacts on the environment.<\/p>\n
But the government says an influx of data centre applications means Australia can be selective.<\/p>\n
Assistant Minister for Technology Andrew Charlton said the government was receiving more applications than Australia could build, creating an opportunity to prioritise projects.<\/p>\n
“Not all data centres are created equal,” Mr Charlton told the ABC.<\/p>\n
“Better data centres are the ones that bring their own clean energy, that use water responsibly, that contribute positively to their community.<\/p>\n
“Worse data centres are the ones that plug into our grid, drink our water and push up bills.”<\/p>\n
The proposed rules for large data centres will build on a set of non-binding “expectations” released by the government earlier this year.<\/p>\n
The expectations state that facilities should “not place upward pressure on energy prices”, make a “positive contribution” to the nation’s energy transition, and work in coordination with energy regulators and suppliers.<\/p>\n
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Andrew Charlton highlights how data centres can positively and negatively contribute to communities. (ABC News: Matt Roberts)<\/p>\n
The CEO of Data Centres Australia, Belinda Dennett, said operational data centres in Australia were already offsetting 70 per cent of their energy use with renewable energy projects, but there was still a reliance on diesel for back-up power.<\/p>\n
“Data centre operators and their customers currently underwrite new, renewable energy generation and firming, and pay their way on energy and water infrastructure,” Ms Dennett said.<\/p>\n
AI standards to set data centre rules<\/a><\/p>\n The prime minister unveils Labor’s plan for new AI national standards, warning Australia has a narrow window to set AI’s “social licence”.<\/p>\n “Diesel generators are installed as back-up power generation because critical infrastructure requires 24\/7 availability.”<\/p>\n In a recent submission to a NSW parliamentary inquiry into data centres, the National Health and Medical Research Council’s Centre for Safe Air stated diesel emissions included several harmful pollutants that could have negative health impacts, and that back-up diesel generators were “one of Australia’s most significant unregulated sources of harmful air pollution.”<\/p>\n According to Data Centres Australia, diesel generators are used for a limited number of hours per year for “periodic maintenance testing”, and actual emergency use is rare and brief.<\/p>\n The organisation describes emissions from data centre generators as negligible.<\/p>\n Qld, NT oppose plan for national rules<\/p>\n Energy ministers met virtually on Tuesday to discuss data centre energy use as part of the Energy and Climate Change Ministerial Council.<\/p>\n QLD and the NT both knocked back several elements of the government’s framework for AI, including the plan to legislate national standards for large-scale data centres to ensure facilities underwrite new renewable power supply.\u00a0<\/p>\n The ABC has approached Queensland Energy Minister David Janetzki and NT Energy Minister Gerard Maley for comment.\u00a0<\/p>\n The council, not requiring unanimity from all ministers, agreed to progress action to ensure what was described as “a significant pipeline of data centre developments” are beneficial to the nation’s energy grids, and prevent additional costs on households.\u00a0<\/p>\n The opposition from the Qld and NT sets the stage for a potentially fiery meeting of National Cabinet in August, where the prime minister will seek agreement on the national standards from state and territory leaders.<\/p>\n Coalition MPs push for nuclear-powered data centres<\/p>\n Shadow Energy and Emissions Reduction Minister Dan Tehan has argued the government’s proposed standards for data centres are too restrictive.<\/p>\n “The problem is that the government has said that pretty much it’s wind and solar as the only two forms of renewable energy that data centres can use,” Mr Tehan told the ABC.<\/p>\n Ahead of releasing the Coalition’s revitalised energy policy, Mr Tehan has said that all options should be on the table to power future data centres, including nuclear energy.<\/p>\n “When [companies] look to invest in Australia, they are deterred by our moratorium preventing them from powering their centres through nuclear,” Mr Tehan said in a statement.<\/p>\n Dan Tehan argues that companies are deterred from investing in Australia due to the moratorium. (ABC News: Ian Cutmore)<\/p>\n Mr Tehan said that US companies such as Google and Amazon were investing in “their own zero emissions nuclear power to power data centres”.<\/p>\n According to the International Energy Agency [IEA], nuclear energy plays a supporting part in powering the world’s biggest data centre markets: the United States and China.<\/p>\n The autonomous intergovernmental organisation expects nuclear power’s role to grow from 2030<\/a>, when it is expected that more small modular reactors [SMRs] come online.<\/p>\n Google, for example, signed a landmark deal in 2024 with Kairos Power to buy energy from several SMRs to help support the tech giant’s AI infrastructure.<\/p>\n The first of the reactors is expected to come online by 2030.\u00a0<\/p>\n Nationals Deputy Leader Darren Chester, whose electorate of Gippsland in Victoria is experiencing significant data centre investment, said he believed that it was “inevitable” that Australian-based facilities would be powered by nuclear energy to some degree in the future.<\/p>\n Mr Chester said “large-scale” nuclear reactors were “proven technology”, but he would be open to other options in the years to come, such as SMRs.<\/p>\n “Removing the moratorium on nuclear [energy] is a sensible thing to do,” Mr Chester said.<\/p>\n Shadow Infrastructure and Sovereign Capability Minister, Andrew Hastie, said it was not feasible for AI data centres to be powered solely off renewables.<\/p>\n “There needs to be a mix of base load power, and nuclear should be part of that mix,” Mr Hastie said in a statement.<\/p>\n The Coalition’s nuclear energy aspirations for Australia suffered a significant blow in its election drubbing in 2025.<\/p>\n Liberals seek to modernise<\/a><\/p>\n Liberal Party HQ has admitted it is “in the political fight of our lives” as it canvasses ideas, including reviving gender quotas, to take the party forward.<\/p>\n An internal review found <\/a>the opposition’s election campaign was perceived as “incoherent,” and acknowledged the Coalition’s plan for nuclear was among policies widely criticised as “politically mistimed or alienating”.<\/p>\n At the core of the policy was a plan to build seven nuclear power sites, but the party did not specify whether large-scale reactors, small modular reactors [SMRs], or a combination of both, would be used.<\/p>\n National science agency CSIRO and the Australian Energy Market Operator [AEMO]’s latest GenCost report showed introducing nuclear power to Australia would attract significant up-front costs.<\/p>\n “New large-scale nuclear costs are significantly lower than nuclear SMR, but both represent moderate-to high-cost sources of electricity generation,” the report stated.<\/p>\n Nuclear power generation has been banned in Australia under federal laws since the late 1990s.<\/p>\n States and territories also have legislation prohibiting nuclear energy production, with some jurisdictions also restricting certain nuclear-energy-related activities<\/a>, such as uranium mining.\u00a0<\/p>\n Labor is emphatically opposed to lifting the moratorium on nuclear energy in Australia.<\/p>\n Energy Minister Chris Bowen recently told Sky: “Nuclear is not an answer for Australia any time.”<\/p>\n Chris Bowen’s focus, like the government’s, is transitioning to renewable energy. (ABC News: David Sciasci)<\/p>\n Instead, the government is focusing on transitioning to renewable energy, specifically solar and wind energy backed up by hydro storage and gas, with a goal of having 82 per cent of electricity generated by renewables by 2030.<\/p>\n Experts weigh in on how to power Australia’s data centres\u00a0<\/p>\n Tony Irwin, a nuclear energy advocate and ANU honorary associate professor who spent three years building nuclear reactors in the UK, believes nuclear energy should be used to help power data centres.<\/p>\n “Solar and wind obviously can play a part in it. But nuclear should also be playing a part because, as I say, it’s reliable, it’s low emissions,” he said.<\/p>\n Mr Irwin believes large-scale reactors could be used, but SMRs and what are known as “micro-reactors” could be less costly.<\/p>\n Operational SMRs are only found in Russia and China, according to <\/a>Energy Strategy Reviews. Micro-reactors are still in development.<\/p>\n![\"Dan](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/07\/7a57d121aaeb136abafbcde3a25b5bf8.jpeg\")
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