The video call that changed the future for North Shore data centres

On Tuesday, energy ministers from around Australia joined a video call that may change the landscape for future data centres on the North Shore.

On the agenda was advice from the Australian Energy Market Commission (AEMC) on whether it was feasible to force data centres to use 100 percent renewable energy. 

The answer? Yes. 

In that meeting, all federal, state and territory energy ministers — bar Queensland and the Northern Territory, which declined to participate — agreed they would put into legislation a requirement for data centres to build enough renewable energy to cover the power they need to operate.

Now we wait: Energy analyst Tristan Edis suspects it will take at least 12 months before these changes are implemented at the state level. 

Earlier this month, PM Anthony Albanese said he would introduce legislation to parliament “early next year”. 

Data centre development in Australia — including electricity requirements — is typically managed at the state level. However, UNSW energy researcher Dylan McConnell said mandates on the use of renewable energy can be enforced at the federal level. 

Albanese has specified federal laws would impact the “next generation of large-scale data centres”. 

Given new legislation will not be retrospective, McConnell anticipates data centre companies may face “some pressure to do things faster, to get ahead of any requirements”.

“They’re already going at breakneck speeds,” he said.

Details: Edis and McConnell are concerned the final legislation may contain loopholes that allow data centre operators to avoid having to build their own renewables energy source. 

Sunshine State: Queensland has said it will not implement new legislation, part of a broader Crisafulli government push against renewables. Since being elected in 2024, it has scrapped renewable energy targets, emissions reporting and announced plans to extend the life of coal-fired power plants.

Will this undermine the legislation passed in NSW? Edis believes it’s unlikely. 

McConnell agreed, saying “no-one is really talking about building a lot of data centres [in Queensland]”.

Latency — the time it takes for data to pass from one point on a network to another — is a key factor for where data centres are built. Most centres want physical proximity to the companies they service, and as such, major cities like Sydney and Melbourne are desirable locations.