What happens when an unstoppable force meets an immovable object? It’s a paradox whereby if one can never be stopped and the other can never be moved, both cannot exist at the same time in the same universe—and that’s the problem federal energy minister Chris Bowen is faced with in creating a set of national standards for data centres.
In his speech at the National Press Club yesterday, Bowen said the federal government would override state governments that opposed new national rules on data centres that require them to be powered by renewables—namely the Northern Territory and Queensland, both of which have backed gas-fired power for data centres.
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Queensland’s LNP government voiced concerns about a renewables mandate at the Energy and Climate Change Ministerial Council Meeting in May, while the Northern Territory’s CLP government this week chimed in alongside Queensland in rejecting further proposals and agreements about data centres.
Bowen acknowledged the dissent, saying, “I appreciate states and territories working with us and the AEMC to implement these reforms. Let me blunt though, it was not unanimous at the energy ministers’ council.
“While I always prefer to work with my state and territory colleagues, the Commonwealth will not be standing by and letting a race to the bottom of states falling over themselves to attract data centres, at the cost to household bills, reliability or emissions.
“We will use all the powers available to the Commonwealth, including Commonwealth legislation, to ensure that Australian households and Australian energy reliability is put first: even if some states have different ideas.
“At the same time, these new rules will be a national standard. States and territories will be free to add more rigorous requirements if they feel that is appropriate for their circumstances, but not to water them down.”
And while few would disagree that an unfettered rollout of data centres and AI factories represents a real risk to both the grid, energy consumers, and Australia’s net zero ambitions, not everyone supports a Commonwealth-controlled approach.
Professor Bruce Mountain is the director of the Victoria Energy Policy Centre at Victoria University, and a well-known Australian energy economist.
“The increase in demand that hyperscalers present, even the most pessimistic forecasts, is enormous,” he says.
“A great deal is to be learned about how to best meet this demand in ways that respect the interests of other customers and that doesn’t come at the expense of the environment and local communities.
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“It would be extremely valuable if institutional arrangements sought to maximise the opportunity for local discovery and negotiated settlement, so that the best possible solutions can quickly be learned and shared.
“Top-down, central control, as Minister Bowen is insisting upon, is inimical to such discovery. Canberra does not know what is best. No-one does—it is yet to be discovered.”
Will Minister Bowen succeed in his quest to force the immovable? Time will tell.
