Data centres done “the Australian way”: what does Albanese’s speech mean for North Shore locals?

Speaking at the University of Sydney last week, Prime Minister Anthony Albanese said he wants AI in Australia to be done “the Australian way, true to our values and our standards”.

But what does that actually mean? 

For North Shore locals, the infrastructure supporting the growth of Artificial Intelligence is as important as AI itself. That infrastructure comes in the form of data centres already being proposed across the northern suburbs. 

Who needs ‘em? Large Language Models (LLMs) — ChatGPT, Claude, Google Gemini — require massive amounts of computing power to operate. That power is stored inside data centres, and the proliferation of these LLMs is a significant part of why data centre growth is booming too. 

This growth can be seen in North Shore suburbs like Artarmon, Lane Cove, Ryde and Macquarie Park, where large scale data centres have been built or proposed. 

Laying down the law: In his speech, Albanese said he would bring what are currently optional “expectations” of data centres into a mandatory legal framework. 

This would include “a legal obligation for the next generation of large-scale data centres to underwrite new power supply”. This means data centres would need to build their own energy supply, not just contribute to existing demand. 

He said he would aim to introduce this legislation “early next year”. 

A missing word: Compared to previous government commentary on data centre development, Albanese’s announcement was missing one crucial word: renewable. 

• At a speech last month, Andrew Charlton, the Assistant Minister for Technology, said data centres must bring a “new and clean supply” of energy.
  

• The government guidelines for data centre development, released in March, also state centres “should make a positive contribution to Australia’s energy transition” and “secure new and additional clean energy generation”. 

While Albanese did say there would be an obligation to “build new renewable generation”, there is a vast gap between data centres building new renewable energy and building enough to offset their demand. 

What does this mean: If data centres are not required to use renewable energy, we face the prospect of their massive energy demands further extending the life of our fossil fuel industry.

In practical terms, data centres in Australia are already powered by fossil fuels: their high energy demands, growing faster than what new renewable projects can supply, are contributing to more coal and gas being burnt to feed them electricity. 

The reality of solely gas-powered data centres has also been creeping up on Australia. 

• In the NSW Southern Highlands, developer Cloud Carrier is seeking approval for a gas-fired power plant to power a “data centre campus”. These types of centres already exist in the US and Ireland. 

What now: The national meeting of energy ministers will be held on July 28, and the advice they receive from the Australian Energy Market Commission will determine how a 100 percent renewable requirement could be established, and what data centres built “the Australian way” may actually look like. 

Watch our full explainer on the speech below.