Australian Energy Minister Chris Bowen has refuted claims that Queensland and the Northern Territory secured exemptions from new federal rules requiring data centers to use 100% renewable energy. Despite a meeting of national cabinet where Queensland Premier David Crisafulli claimed a "win" allowing states to decide how data centers are powered, Bowen stated that the Commonwealth will have the final say and there will be "no exceptions and no carve-outs" under its renewables plan.
Bowen clarified that while states can seek approval to use alternatives like coal or gas if a state-owned electricity company asserts it can provide power cheaper than renewables, the threshold for such approval will be "very high." He emphasized that the Australian Energy Regulator (AER), on behalf of the Commonwealth, will consider these applications and make a decision, not the states themselves. This decision will be based on whether the alternative power source can prove to be "cheaper and better for the grid than renewables would be," a condition Bowen considers very difficult to meet.
The federal government plans to release draft national data center standards by the end of 2026 and aims to pass legislation early next year. These standards will mandate 100% renewable energy plus firming through battery storage or gas across all states and territories. Bowen warned that an "open slather approach" could lead to wholesale electricity bills being 13% higher in Queensland, underscoring the federal government's commitment to prevent state government ideologies from negatively impacting consumer costs.
Bowen stressed that the intention is to ensure data centers, which he referred to as "electricity whales," invest in new renewable energy rather than consuming existing grid capacity. He highlighted that the industry itself favors clean energy sources due to their cost-effectiveness and quicker deployment compared to fossil fuel alternatives. Any claims for exemptions will be assessed on a case-by-case basis by the AER, with the onus on states to prove their fossil fuel options are cheaper and would put downward pressure on bills.
