How the expectations work
The Australian Government will prioritise proposals most closely aligned with the expectations. Energy-intensive data centre proposals not closely aligned with the expectations will not be prioritised by Commonwealth regulatory assessments. Resilience and national security will continue to be considered as part of the prioritisation.
The government will also work with states and territories and market participants to implement the expectations in their processes, particularly through the Energy and Climate Change Ministerial Council.
The expectations work alongside existing national, state and territory laws. They do not alter any obligations to comply with Australian law or to engage in good faith with regulators, including in areas relevant to data centres, such as data, cyber and national security, privacy and waste management.
The expectations apply to new or expanded developments within Australia. Operators of co‑location sites, hyperscale operations, and large-scale AI compute centres – referred to as ‘AI factories’ – should consider how these expectations apply in their contexts. The expectations do not apply to small-scale edge or on-site enterprise data centres.
Expectation 1 – Prioritising Australia’s national interest
Australia’s data centres and AI infrastructure are expected to consider and contribute to Australia’s interest, which includes Australia’s national security and data sovereignty.
Data centre operators should conduct their businesses in ways which work for the benefit of the Australian economy, people and their local communities. They should operate in good faith, delivering positive outcomes while minimising adverse effects on local communities wherever possible. They should seek opportunities to build and maintain social licence through open and constructive engagement with the communities they operate within. They should protect sensitive and personal data, prepare for threats and disruptions, and limit physical and digital access to their data centres to those with a right to it.
Expectation 2 – Supporting Australia’s energy transition
New data centres and AI infrastructure should not place upward pressure on energy prices and should make a positive contribution to Australia’s energy transition.
This includes working in coordination with energy regulators and suppliers to:
- secure new and additional clean energy generation and/or storage to offset demand
- cover their share of transmission and distribution infrastructure costs
- minimise their energy demand and emissions by adopting industry-leading efficiency measures and technologies
- improve the overall security and stability of the energy grid, including by enhancing demand flexibility and opportunities for peak-load management and appropriate sharing of consumption data.
Non-genuine data centre proposals that congest approval pathways are not welcome. To ensure a focus on well-developed proposals, we are working with industry and networks on improving connection approvals.
Expectation 3 – Sustainable and efficient water usage
Data centres should use innovative, efficient and sustainable solutions to minimise water use. They should engage early and work proactively with water utilities, communities and First Nations peoples to determine appropriate locations and use secure water sources based on local conditions. They should use efficient cooling technologies, and where possible use non-potable water and apply circular water opportunities. To minimise adverse effects, data centres should:
- cover their share of infrastructure and delivery costs
- build resilience into operations to mitigate the impacts of water disruptions, drought and climate change
- provide ongoing transparent reporting about their water usage and efficiency.
Expectation 4 – Investment in Australian skills and workforce
Data centre operators should support Australia’s economy by creating fair, safe, secure and well-paid jobs for Australian workers. They should invest in developing a skilled domestic workforce, including through apprenticeships and other structured training pathways. Operators are expected to work collaboratively with governments, unions, education and training providers, and other employers to address skills gaps, support workforce development and help build a pipeline of skilled workers to support the construction and operation of data centres.
Expectation 5 – Research, innovation and local capability
Providers of large-scale compute, including hyperscalers and neoclouds, are expected to contribute to research and innovation, including by enabling access to compute for Australian start-ups, innovative small businesses, researchers and not-for-profits on favourable terms.
As part of any major investments, providers of large‑scale compute, including hyperscalers and neoclouds, should deploy engineers and researchers in Australia. They should contribute to building local technical and innovation capability and invest in Australian supply chains.