Australian Prime Minister Anthony Albanese has softened the federal government’s proposed requirements for new artificial intelligence data centres to use renewable energy.
The decision follows a National Cabinet meeting in Sydney, where leaders agreed to develop nationally consistent standards while allowing some flexibility for states and territories with government-owned electricity systems.
Queensland and the Northern Territory had opposed plans that would prevent new AI data centres from being powered by coal and gas. The rules are expected to form part of federal legislation to be introduced in early 2027.
Albanese’s position marks a shift from earlier warnings by Energy Minister Chris Bowen that the federal government could override states that refused to comply with the renewable energy requirements.
Northern Territory Chief Minister Lia Finocchiaro said the agreement allows the territory to use gas from the Beetaloo Basin, which is expected to begin production soon. She said the territory’s priority remained affordable and reliable electricity for residents.
Queensland Premier David Crisafulli also welcomed the flexibility, arguing that the state’s publicly owned electricity network gives it greater control over its energy mix. He said the arrangement would allow Queensland to manage the growing demand for electricity from AI data centres while maintaining reliability.
The agreement comes as Australia prepares for rapid growth in artificial intelligence and data centre infrastructure, which is expected to place increasing pressure on the country’s electricity supply.
