Data Centres Australia (DCA) has responded to a new joint statement calling for “public interest principles” to govern the rapid expansion of data centres, urging closer engagement with industry and warning against what it describes as proposals developed “in isolation” – a characterisation the coalition behind the statement, which includes peak bodies and renewable energy industry representatives, would dispute.
The statement, convened by the Carbon Zero Initiative and signed by a coalition of climate, environment, union, peak body and renewable energy groups – including the Australian Conservation Foundation, Clean Energy Council, Carbon Zero Initiative, Climate Energy Finance, Electrical Trades Union, Environment Victoria, Nature Conservation Council NSW, RE-Alliance, Smart Energy Council, Queensland Conservation Council, The Sunrise Project and WWF-Australia – sets out eight principles for new developments.
These include a requirement that facilities be powered by 100 percent additional renewable energy, strengthen grid stability, minimise embodied emissions and water use, operate transparently, and commit to social licence and workforce training.
The signatories argue that without effective planning, data centre demand – projected by the Australian Energy Market Operator (AEMO) to grow from around 3 terawatt-hours today to as much as 30 TWh by 2035 – risks pushing up power prices, straining the grid and slowing the energy transition. They propose that each new facility be matched with new renewable generation from the day it opens and that costs associated with grid augmentation not be socialised onto households and small businesses.
The coalition says its principles are grounded in existing policy levers, research and on-the-ground experience, and that a whole-of-government approach is needed to manage what it describes as a once-in-a-generation opportunity to shape the sector in the public interest.
Renewable push
Tim Buckley, Director of Climate Energy Finance and a signatory to the statement, said on LinkedIn that data centre demand “could rise tenfold to reach 12% of the grid’s capacity by 2040,” citing AEMO projections. He said the Carbon Zero Initiative alliance was calling for new facilities to be powered by “100% new build renewables” in order to “unlock cheaper power, new regional jobs and grid stability”.
“Our organisations stand ready to work with governments, policy makers, and industry to ensure that all new data centre developments in Australia serve the public interest,” the joint statement concludes.
Industry wants engagement
In response, DCA chief executive Belinda Dennett (above) said the industry body was “open to engagement on how data centre development can support sustainable outcomes for energy, water, communities and the environment,” but cautioned against developing policy frameworks without direct industry input.
“Principles developed independently of the industry are inherently limited,” Dennett wrote in a LinkedIn post and accompanying commentary. “Without grounding in operational reality, commercial feasibility and the existing regulatory landscape, well-intentioned proposals risk producing outcomes that are counterproductive – slowing the energy transition they aim to support, undermining the critical services Australians depend on, and redirecting investment to jurisdictions with fewer protections, not more.”
Dennett said data centres are not a homogeneous asset class, pointing to differences between edge, colocation, retail, hyperscale cloud, AI training and inferencing facilities. Principles that treat them as one category, she argued, cannot deliver workable policy.
Heavy investor
On the proposal that new facilities be powered by 100 percent additional renewables from day one, DCA said the sector is already a major investor in renewable energy through power purchase agreements and Large-scale Generation Certificates. However, it argued that matching load from the outset does not reflect renewable development timelines, particularly transmission and Renewable Energy Zone lead times.
“The bottleneck is not off-take – it is grid connection and approvals,” Dennett wrote, suggesting that a phased approach aligned with renewable delivery timelines, and applied consistently across large energy users, would be more effective.
The joint statement also calls for data centres to strengthen grid stability through demand response, storage and firming. DCA said operators already contribute as predictable baseload demand and can participate in AEMO’s demand response mechanisms. However, it noted that certain workloads, particularly cloud and AI inferencing, require continuous availability and cannot be curtailed during peak events. In co-location environments, operators may not control customer workloads, limiting their ability to shift load.
On embodied emissions, efficiency and water use, the Carbon Zero Initiative points to benchmarks including NABERS and Green Star, and proposes public reporting of facility-level energy and water metrics. DCA said existing frameworks already address many of these measures and warned that prescriptive targets may not account for site-specific trade-offs, including the relationship between energy and water efficiency. It also raised concerns about facility-level public reporting, citing commercial sensitivity and obligations under the Security of Critical Infrastructure Act.
Working with states
The debate comes as Energy Minister Chris Bowen signals that data centre developers should invest in new renewable energy alongside their facilities, with the Australian Financial Review reporting that Industry Minister Tim Ayres and Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton are working with states on draft national data centre principles aimed at managing energy and water impacts without discouraging investment.
Both the Carbon Zero Initiative alliance and DCA have argued their positions are constructive. The former says its principles are grounded in existing policy levers and are intended to guide governments in managing rapid growth. DCA, for its part, said it welcomes the opportunity to work “directly with the authors of these proposed principles, governments and regulators to develop evidence-based policy that achieves shared sustainability goals”.
As the federal government develops its own approach, the exchange highlights a broader policy question: how to align accelerating digital infrastructure investment with Australia’s climate, energy and water objectives, without conflating distinct regulatory settings or imposing requirements that stakeholders argue are either insufficient or impractical.