Bigger AI Data Centres to Escape Looming Water and Power Restrictions

A new generation of bigger and more power-hungry AI data centres is set to escape looming federal government restrictions on energy and water use, as the proposed rules are not expected to be retrospective.

Analysis of planning records and company documents has revealed that dozens of approved but yet-to-be-built data centre projects will not be subject to the new rules, which aim to address community concerns about the environmental impact of these developments.

Data Centres to Escape Restrictions

The federal government is planning to introduce national standards to regulate the energy, water, and land-use impacts of large data centres, but the exact details have not yet been released. The proposed standards are intended to require data centres to underwrite new renewable energy to cover their consumption, cover the connection costs, be as water-efficient as possible, and be built in appropriate locations.

Prime Minister Anthony Albanese has said that the government will pass a law in early 2027 setting rules to force data centres to minimise water use and maximise energy efficiency. However, he has also stated that the rules will not apply to projects already approved or under construction.