The Australian federal government is preparing to intervene in state-level energy policy, threatening to write new laws that would veto any plans by states to power large data centres with non-renewable energy.
Energy Minister Chris Bowen made the threat explicit, setting the stage for a confrontation at the upcoming national cabinet meeting with Queensland and the Northern Territory.
The move represents a significant escalation in Canberra’s efforts to enforce its renewable energy targets on the rapidly expanding artificial intelligence infrastructure sector.
By asserting federal veto power over state energy choices for data centres, the Albanese government is attempting to close a regulatory loophole that could allow states to approve fossil-fuel-backed power for high-demand digital facilities.
This policy clash comes as Prime Minister Anthony Albanese faces technical headwinds in regulating AI infrastructure, with previous initiatives threatening to derail data centre construction in major hubs like Sydney and Melbourne.
The federal government’s hardline stance aims to ensure that the boom in digital infrastructure aligns with national climate commitments, even if it means overriding state autonomy.