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AAP
AAP
Environment
Poppy Johnston

No welcome mat for thirsty, energy-hungry data centres

New data centres will be incentivised to adopt their own clean energy to offset demand on the grid. (Dan Himbrechts/AAP PHOTOS)

The red carpet will be rolled out for data centres that add to clean energy supply and minimise water use under keenly anticipated national 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.

Internet servers
The AI surge is expected to increase data centres' use of grid-supplied electricity. (Bianca De Marchi/AAP PHOTOS)

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.

Australia has the second-largest pipeline of data centre construction in the world, as investment booms 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.

A general view of NEXTDC Sydney Data Centre
Australia is a favoured destination for data centres to accommodate the world's digital footprint. (Steven Markham/AAP PHOTOS)

Energy has been a particular focus as the nation struggles to roll out solar, wind and storage fast enough to meet renewables and 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.

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 under the guidelines.

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

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."

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