Queensland and NT reject Labor’s push to ensure that power-hungry AI datacentres use renewable energy

Australia's federal government faces opposition from Queensland and the Northern Territory over its plans to regulate AI data centers, particularly concerning their energy consumption. The states have rejected proposals to mandate renewable energy use for these power-hungry facilities, labeling them as "underdeveloped ideas that hand increased power to Canberra."

The dispute highlights a growing tension between federal ambitions and state autonomy in managing the burgeoning AI sector. S&P Global warns that data center power usage could quintuple by 2035, potentially leading to skyrocketing energy bills if renewable projects cannot keep pace with demand.

Despite the pushback, the federal Labor government, led by Prime Minister Anthony Albanese, plans to forge ahead with establishing "nationally consistent" regulations for AI. These would include binding standards for data center locations, energy use, and water minimization. Albanese has pledged a "legal obligation" for new data centers to underwrite new power supplies, cover grid connection costs, and generate as much energy as they consume.

Queensland's Liberal-National government had previously expressed concerns about a renewables mandate in May, being the sole holdout among states that agreed on offsetting energy demands with renewables. The Northern Territory's Liberal government has now joined Queensland in rejecting further proposals. Both states argue that while they support affordable and sustainable power, they will not endorse plans that shift power to the federal government at the expense of their residents. They emphasize their commitment to delivering cost-of-living relief through reliable energy while fostering investment and job growth.

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Queensland will always support proposals that deliver affordable, reliable and sustainable power, however, we will not support underdeveloped ideas that hand increased power to Canberra at the expense of Queenslanders.