BYO renewables: New national principles set bar for data centre energy and water use

Adding to clean energy supply and minimising water footprints will become national expectations for new data centres built on Australian soil.

Operators that further invest in worker training and supply affordable computing power to local startups and researchers can also expect priority treatment.

The keenly anticipated data centre national principles are not legal requirements, but development proposals that meet expectations will be prioritised under federal regulatory assessments.

Australia has the second-largest pipeline of data centre construction in the world,  after the US, with investment booming globally to accommodate the computing needs of artificial intelligence. 

The federal government has welcomed the economic uplift and job creation but the massive energy and water needs of the facilities have given policymakers pause.

Unions, environmental groups and clean energy industry bodies joined forces in February to demand an energy and water-self-sufficient sector committed to upskilling workers.

Energy has been a particular focus as the nation struggles to roll out renewable sources fast enough to meet climate goals and supply fledgling green export industries.

Data centres consume about two per cent of grid-supplied electricity, but that share is expected to triple by 2030 due to the AI surge. 

In addition to bringing their own clean energy or storage to offset demand on the grid, operators will be expected to cover the full share of power connection costs and support network stability.

Energy Minister Chris Bowen said it was important to get the investment settings right to keep the electricity system secure and prices low.

“Data centres have great potential to support our grid and expand new renewable investment,” he said.

Sustainable water use will also be viewed favourably to protect local drinking supplies, with recycled and non-potable water use encouraged where possible. 

Assistant minister Andrew Charlton said the national expectations would maintain community confidence in the fast-growing sector. 

“We will do what is necessary to ensure the growth of AI is sustainable and underpinned by a strong social license,” he said.

Work to implement the principles is under way with state and territory governments and industry.

The federal opposition has been critical of the government’s response to the AI infrastructure boom, saying Australia risks losing investment to competitors without faster planning processes and ready access to affordable and reliable energy.

Opposition industry spokesman Andrew Hastie favours using Australia’s abundant fossil fuels and uranium to power data centres and high-tech manufacturing.

No welcome mat for thirsty, energy-hungry data centres

The red carpet will be rolled out for data centres that add to clean energy supply and minimise water use under the new guidelines.

Operators that further invest in worker training and supply affordable computing power to local startups and researchers can also expect priority treatment under the framework.

Framed as expectations rather than rules, developers that meet expectations will be prioritised under federal regulatory assessments.

States and territories have greater control over land-use approvals and planning than the Commonwealth but Industry Minister Tim Ayres reported enthusiasm for a nationally-consistent approach.

“It means that we’re not going to have a race to the bottom, in particular on electricity and water use,” he told reporters on Monday.

Data Centres Australia chief executive officer Belinda Dennett welcomed the framework and said most operators were already leading on energy and water efficiency voluntarily. 

“We support measures that hold all operators to this standard,” the head of the data centre industry body said.

Australian Conservation Foundation chief executive Adam Bandt was supportive of the direction but wanted tougher regulation.

“If you want to build a data centre in Australia, you should be compelled to build the renewables and water recycling infrastructure to service it,” he said.

The environmental group was one of several NGOs to lay out firm regulatory demands on energy, water, land and skills for data centres back in February.

Swinburne renewables expert Medhi Seyedmahmoudian said the framework marked a critical shift in expectations for big energy users. 

“Energy-intensive infrastructure must now actively support the system it depends on,” Professor Seyedmahmoudian said.

“The real question is no longer whether we host this growth, but whether we can integrate it intelligently to strengthen, not destabilise, our future energy system.”

Source: AAP