The Albanese government’s determination to prioritise renewable energy to power data centres, and to minimise carbon emissions, waste and water, have been questioned after it released an artificial intelligence consultation paper requesting public feedback over the next three weeks.
The paper has been released just as Prime Minister Anthony Albanese prepares to jet off to the US on a visit that includes meeting Apple’s former boss Tim Cook, and discussing fuel costs, climate change and conflict with “other world leaders” at the United Nations in New York.
The paper’s consultation topics include energy use and renewable energy requirements, sustainable water use, developing workforce skills and training, and setting thresholds for applying requirements to different types of data centres.
“How we manage this industry will shape our energy system – and climate – for decades to come,” said Amanda McKenzie, chief executive of the Climate Council. “This is the time to get the laws right to protect Australians.”
The 28-page consultation paper did not mention waste issues even though one environmental group has calculated the rapid turnover of data centre components could lift e-waste levels 10-fold, while others have warned about the increased challenge of disposing of so-called forever chemicals and other hazards.
As Renew Economy has noted earlier, greenhouse gas emissions have largely been omitted from government discussions about the impact of a rapid increase in electricity demand anticipated by the data centre boom.
The consultation paper references emissions five times, three of which deal with how data centres will be required to reveal their pollution impacts if reform legislation passes.
Another mention notes the expansion of data centres is occurring “at the same time as Australia is transforming its electricity system to reduce emissions, modernise the electricity grid and maintain secure, affordable supply for all electricity users.”
However, the accompanying sentence – “Meeting the sector’s growing electricity demand without driving up energy costs will require additional renewable generation with firming, network and storage infrastructure, and more efficient processes for connecting and integrating new large loads into the energy system” – does not comment on the need to keep a lid on carbon pollution.
The government’s own emissions projections suggest the data centre boom will make it harder for the Albanese government to deliver on its emissions target – but only after 2030.
The department of climate change, energy, the environment and water at the end of last year noted “a slower rate” of emissions reductions in the electricity sector beyond 2030 despite DCCEEW estimating data centres will account for 6 per cent of the national electricity market demand by that year.
The PM’s comments after he hosted national cabinet last month – and the reaction from Queensland and the Northern Territory leaders – were seen to represent a backdown on tying data centres to additional renewable resources.
Climate change and energy minister Chris Bowen later insisted there would be “no-carveouts” for powering data centres with coal and gas.
The consultation paper does, however, propose that “data centres procuring electricity from state-owned operators could apply to the Australian Energy Regulator (AER) to seek a modification to their renewable electricity requirement if they can demonstrate their alternative energy mix would result in clear benefits for grid stability and lowering electricity prices for customers.”
Another indication the government might be “flexible” – to use Albanese’s media conference word – when it comes to insisting that data centres bring their own clean energy might be seen in how the consultation paper refers to Renewable Energy Guarantee of Origin (REGOs).
As Renew Economy noted in the wake of this week’s announcement of a huge 2.16 gigawatt data centre proposed by AI giant Anthropic for Queensland, it matters if the REGO is sourced from an existing or new renewables project.
“Data Centres should be required to surrender a new project [REGO] for every megawatt-hour of electricity they consume [from the grid],” energy experts Jonathan Upson and Tristan Edis wrote in a recent Renew Economy article.
“Only by limiting REGO surrender to new projects, will the government’s objectives of not raising electricity prices and preventing rises in emissions be realised.”
However, the consultation paper states: “Recognising that the energy transformation is still underway and new renewables projects take time to build, some REGO certificates or Large-scale Generation Certificates (created under the RET) could come from existing renewable generation and storage capacity initially,” the paper stated.
“This could ramp up so that after a certain period all of a data centre’s electricity consumption would be sourced from new renewable capacity.”
The paper cited Ireland as an example of one nation that provides a six-year “glide-path” to achieve generation of at least 80% of electricity from renewable sources. It did not provide a recommendation how long Australia’s “glide-path” could be, nor how long the “certain period” might run.
Water use by data centres would also be covered by mandatory standards. Centres would have to minimise water use, including “prioritising efficient cooling technologies, non-potable water
and recycled water opportunities”, the paper said.
- Centres would also have to pay “their fair share for water infrastructure and servicing costs” to ensure risks or reduced services “are not shifted onto communities, households, industries, utilities or the environment”.
- They should also build “operational resilience to mitigate the impacts of water disruptions, drought
and climate change”.
The Climate Council’s McKenzie said if new data centres simply drew on the power grid they would extend the life of “old coal power and increase gas generation, pushing up power prices by more than 20% on average in [the national electricity market].”
“Urgently bringing on additional renewables to power data centres is crucial to protect Australians from power price and pollution spikes,” she said in a statement.
McKenzie also add that the council was concerned climate pollution barely rated a mention: “When a single project can be equivalent to putting 2 million cars on the road, Australians need strong assurance that the climate risks from these projects will be well managed.”
A “massive loophole” in the plan was when the new laws would apply, she said, noting that 225 data centres were already in the works for approval.
“It’s critical that the law applies to all new data centres, including those already in the pipeline, to protect communities from rising costs and worsening climate harm,” McKenzie said.
“Data centres should also be banned from building new off-grid fossil fuel generation as a primary power source, including while they wait for new renewable generation to come online.”
Consultation will close at 5pm (Australian Eastern Daylight Time) on October 9th.
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