The Senate’s Environment and Communications Reference Committee is conducting an inquiry into artificial intelligence and data centres to assess the effectiveness of existing regulatory frameworks and the potential impacts of these technologies on Australia.
Australia is at the threshold of a significant expansion in AI and the data centre infrastructure that supports it.
This could lead to productivity gains, new industries and changes in the labour market, along with economic opportunities.
It will also place new pressures on the resources that underpin the country’s transition to net zero, including electricity, land and water.
Together, the recommendations in this submission outline an approach that would allow AI and data centres to expand in the Australian market while supporting the broader decarbonisation effort, protecting resources, centring the interests of communities and ensuring ongoing benefit for the nation.
Summary of recommendations:
Climateworks Centre suggests the Environment and Communications Reference Committee’s report calls on the Australian Government to:
- Expect or require data centre operators, AI companies and their investors to use the tools in the Sustainable Finance Roadmap, including credible transition plans.
- Develop a plan to invest in and use AI and advanced modelling to accelerate decarbonisation across the economy, including the energy and electricity, buildings, transport, industry and land use sectors.
- Ensure data centres do not slow the energy transition by assessing how much additional demand the electricity system can accommodate alongside the increasing demand from transport, buildings and industry and how data centres can contribute through demand flexibility and additional renewable energy supply.
- Assess data centres’ capacity to provide demand flexibility services, and the market settings that would best incentivise their participation, taking into account the differences between the National Electricity Market (NEM) and Wholesale Electricity Market (WEM).
- Set mandatory energy and water efficiency standards for data centres, with a 6-star National Australian Built Environment Rating System (NABERS) rating as the benchmark, to minimise demand growth.
- Explore how clearer incentives and information about where to build data centres could guide investment towards regions that have spare capacity and grid connection infrastructure.
- Coordinate the siting of data centres and their supporting energy infrastructure with government land-use planning, so that the best available information on biodiversity, agricultural, water, cultural, industrial and community values shapes decisions, with a view to a comprehensive national land-use framework over time.
- Integrate data centre growth into both strategic precinct-level planning and operational frameworks, ensuring that new and existing developments safeguard climate and environmental integrity, undertake genuine community consultation, and deliver tangible benefits for households, local industries and impacted communities.
More detail can be found in our submission [PDF 0.5mb].