Data centres throughout Australia will need to underwrite their own energy supply and minimise water use under a new national framework that is set to be developed in respect of the regulation of artificial intelligence throughout the nation, the Prime Minister has announced.

And protections will be in place for owners of copyright.

During an address at the University of Sydney on Wednesday, Prime Minister Anthony Albanese unveiled the Federal Government’s strategy in respect of the regulation of artificial intelligence.

In his speech, Albanes announced that the Government will introduce a set of mandatory standards that will apply in respect of AI.

These will focus on data centres, protection of intellectual property and consumer safety.

They will build upon a series of Expectations of data Centres and AI infrastructure developers that was released earlier this year.

The new standards will bring the expectations into a single regulatory framework.

Under the new standards, data centres will need to:

• Underwrite their own power supply, including by putting at least as much energy back into the grid as they take from out of it.
• Pay their full share of energy connections costs to ensure that energy costs which are associated with data centre use are not passed on to consumers or other businesses.
• Reduce power when needed to strengthen the grid
• Maximise their energy efficiency and minimise their water use as much as possible; and
• Pay for any additional water infrastructure that is required to support data centre operations.

The Federal Government will also work with states and territories to ensure that large data centres are built in suitable locations with adequate input from local communities.

In addition to energy and water requirements, the standards will deliver strong protection of intellectual property for writers, artists and journalists.

The protections will ensure that people retain control over their work and that companies are not able to use Australian creative works to train AI without the consent of the relevant content creators.

To coordinate the design of the new standards, the Government will establish a new office within the Department of Prime Minister and Cabinet.

The Government’s approach will be considered by National Cabinet in August, with standards expected to be legislated early next year.

In a statement, Prime Minister Anthony Albanese says that the new framework will help to ensure that Australia is able to capitalise on opportunities which are available through AI whilst also sharing the benefits and keeping Australians safe.

He says that the new standards will help to ensure that Australia can shape the environment to guarantee that data centres operate in a way which does not undercut conditions, damage the environment or divide communities.

He says that the standard will also deliver greater clarity, speed up approvals and streamline the process for verifying compliance with energy, water, safety and other requirements.

“The implementation of these standards will deliver a simple, consistent regulatory framework for large data centres and AI training and be the first to be legislated by a government worldwide,” Albanese said.

“The Government’s approach will help further grow Australia’s economy, strengthen our sovereignty, secure benefits consistent with our national interests, and lift our standard of living.”

(Data centres are creating many construction and engineering jobs but having significant impact on power grids, water resources and local communities. Image: Ai generated via magnific)

Massive investment, growing concern

The announcement comes amid growing concern about the impact which the current boom in data centre development is having upon communities and society throughout Australia.

In a report issued in April, data centre industry advocacy group Data Centres Australia indicated that the nation currently has 162 data centres in operation with a further 90 being under consideration, in planning or in construction.

What’s more, new data centres are getting larger in size.

Whereas only three of the nation’s 162 data centres which are currently in operation exceed 100MW in capacity, more than half (47) of the 90 centres which are in the pipeline will exceed this capacity.

For Australia, the boom in data centre investment presents both enormous potential benefits as well as significant concerns.

Likely benefits will include:

• Massive economic benefits and business and employment opportunities in areas such as construction, engineering, cyber security and advanced manufacturing.
• Sovereign data control as large computing clusters will enable sensitive government and other data to be maintained onshore and within Australia’s legal and regulatory control rather than relying exclusively on offshore server capacity.
• Local innovation as Federal guidelines require hyperscale data centre providers to make computing capacity available to Australian startups – thus ensuring that local researchers will have the tools to develop native AI technologies.

All this is in addition to the broader benefits which AI is expected to deliver to business, consumers and society.

On the negative side, however, data centres have become a source of concern in terms of their effect upon energy grids, water networks and local communities.

This is being driven by their massive energy and water requirements.

Within data centres, servers and equipment run non-stop for 24 hours per day. Even performing relatively straightforward tasks such as search queries requires substantial power. Such tasks also generate heat which creates a need for water to cool the equipment in order to prevent damage.

Over recent times, the effect of this has been supercharged on account of the growth of artificial intelligence. This is the case as AI tasks are many times more complex compared with basic searches.

This has led to IT equipment within the centres becoming heavier and more densely packed. In turn, this is leading to more power consumption and a greater need for water to cool equipment which is now getting even hotter.

Effects are significant.

By 2040, the Australian Energy Market Operator believes that data centres will consume around 12 percent of all power generated nationally.

In terms of water, meanwhile, Sydney Water is preparing for data centres to use up to 25 percent of the Sydney Metropolitan area’s drinking water supply by 2035.

Additional concerns relate to noise, fire hazards and the potential for data centres to consume land that could otherwise be used for housing or other purposes.

In addition to the macro level concerns, there ae fears among community groups about localised impacts in areas where data centres are concentrated.

These concern ongoing noise, fire risks, diesel generator infrastructure, local electricity and water demand, construction impacts and light spill along with potential impacts upon local vegetation, wildlife, water quality and character.

One example is Sydney’s Lane Cove, which is located on the Lower North Shore of Sydney.

Currently, the Lane Cove Business Park operates a major data centre operated by AirTrunk.

A further four data centers are either proposed, seeking planning approval or under construction.

This includes Project Mars – a proposal by Goodman for a 90 MW hyperscale data centre that would operate at the residential edge of the park.

Operating 24/7 around the clock, the 28-meter-high facility would cover a gross floor area of 21,832 sqm. The site would require storage of 198,000 kg of lithium batteries, more than 1 megaliter of diesel and 49 diesel backup generators.

The proposed facility is located just 20 meters from the nearest home. It will sit adjacent to Blackman Park and the Lane Cove Community Nursery and will be nearby to Lane Cove West Primary School.

In response, local residents have formed the Lane Cove Responsible Planning Group.

The group aims to ensure that community concerns are adequately considered when decisions relating to data centre approval are made.

The group is particularly concerned about the cumulative impacts of having multiple facilities which are concentrated in one area.

At a broader level, calls for action are growing.

In particular, environment and community groups have called for a moratorium on new data centre approvals until adequate community and environmental safeguards are in place.

Community groups also want stronger planning safeguards including consideration of the cumulative impacts of hyperscale data centre development along with clear and transparent assessment of the impacts of data centres upon the local community and environment.

However, business lobby groups such as the Business Council of Australia have opposed calls for a moratorium on data centre approvals over concerns that this would jeopardise the pipeline of data centre development.

Business groups have also expressed caution in regard to any restrictive energy mandates.

Announcement welcomed

The latest announcement has been welcomed by both data centre operators and community groups.

Data centre industry advocacy group said that the announcement recognised the role and importance of data centres for Australia.

“Data Centres Australia welcomes the Prime Minister’s announcement that Australia should attract data centre investment and become a leading AI infrastructure market, Data Centres Australia Chief Executive Officer Belinda Dennett said in a statement provided to Sourceable.

“We agree with his view that this investment needs to support Australian interests and to be built sustainably.

“The ambition for one set of standards that both the State and the Federal Governments expect of data centre operators should contribute to policy clarity and regulatory certainty to underpin investor and customer confidence.

“Working through the detail with industry will be important because different types of data centres have different requirements and limitations, particularly with regard to location. We look forward to engaging constructively with government in the months ahead.

“Data centres operators and their customers are committed to underwriting new renewable energy generation and firming and already pay their way on energy and water infrastructure.

“Australia has the opportunity to be a leading AI market by building the infrastructure that underpins it here, at the same time ensuring we attract the jobs, the investment, capture more of the supply chain, build our own AI capability and support the energy transition.”

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