At a glance
- The Commonwealth will work with the states on data centre standards for energy, water and land use after national cabinet on 26 August 2026, with its law designed to complement, not duplicate, state planning approvals.
- The same day, Data Centres Australia published research by Mandala valuing AI computing exports at up to A$4.1 billion a year.
- That research names two brakes on Australian projects, how long planning approvals take and how long a project waits for a grid connection, and puts no number on either.
- Market operator AEMO counts 9GW of data centre projects queued for a grid connection, and puts that wait at about two years.
- Australia holds as much built capacity as any of the seven markets charted, and models as the region's lowest-carbon host for the export work.
Mandala prices the export opportunity for Data Centres Australia
Data Centres Australia, the industry body for the country's data centre operators, published research on 26 August 2026 valuing what Australia could earn by selling AI computing to the rest of the region at up to A$4.1 billion a year and 17,120 extra jobs. The 40-page report was prepared by Mandala, an economics research and advisory firm.
National cabinet met in Sydney the same day. First Ministers agreed that large data centres "bring material energy, water and land-use impacts that need to be managed", and the Commonwealth will work with state and territory governments "to develop consistent mandatory standards for data centre energy, water and land-use" under a framework it calls AI laws in Australia's Interests. Energy Minister Chris Bowen had said that morning the government is requiring new data centres to bring their own renewable energy, backed by gas firming.
Mandala puts Australia behind on the two things it says decide where operators build: how long a project takes, and whether the power is there. It points at state planning approvals, environmental assessment and grid connection queues, and attaches no figure to any of them.
The standards to be developed cover the power a data centre buys, the water it uses and where it can be built. The two constraints in the report are how fast it can get built and how fast it can get connected.
Data Centres Australia's media release says government policy will take data centres from a voluntary 70% renewable offset "to a mandated 100%". The statement commits the Commonwealth to work with the states and territories to develop mandatory standards on energy, water and land use, and nothing is law until legislation reaches parliament.
Queensland and the Northern Territory had objected to the renewables requirement at the Energy and Climate Change Ministerial Council on 28 July 2026, and both signed the 26 August statement. Anthony Albanese told reporters afterwards that "we don't have eight different systems operating around the country". Queensland Premier David Crisafulli said his state "can control our data sovereignty, protect the rights of local communities, and enable that energy mix to bring those data centres on", because Queensland owns "distribution, transmission, generation".
The export figures come from two scenarios
Mandala scored Australia against eight regional rivals on power, land, water, build time, political stability, workforce and connectivity, then modelled two futures. In Broad competition Australia faces all eight. In Narrow competition the weakest-scoring rivals drop out and Australia takes a larger share. Each is reported twice, once for Asia Pacific demand alone and once with the rest of the world added.
| Measure, by 2030 | Broad competition | Narrow competition |
|---|---|---|
| Extra compute demand, Asia Pacific | 1.9GW | 2.4GW |
| Extra compute demand, total | 2.3GW | 2.9GW |
| Annual economic activity, total | A$3.3 billion | A$4.1 billion |
| Extra ongoing jobs, total | 13,580 | 17,120 |
Source: Mandala, The Economic Contribution of the Data Centre Industry in Australia, August 2026, Exhibit 14.
The 1.9GW that carries the carbon comparison sits in the Broad future. The A$4.1 billion and the 17,120 jobs sit in the Narrow one, and both are the top of their range. Separately, and on the current path, Mandala has the domestic industry contributing A$5.6 billion a year and 23,040 ongoing jobs by 2030. Winning the export work would take up to A$52 billion of construction investment on top of that.
Australia's grid runs AI exports on 3.7 times lower emissions
Mandala's argument is that Australia can sell renewable power to Kuala Lumpur or Jakarta without a cable, by selling the computing that power runs: "Australia would export its renewable energy via the compute it powers, rather than directly over high-voltage transmission lines."
Australia comes out the lowest-carbon host in the region on Mandala's numbers. Serving 1.9GW of export demand from the Australian grid gives 3.2 million tonnes of carbon dioxide in 2030, against 11.9 million on Indonesia's grid, with India, South Korea, Japan, Malaysia and Singapore ranged between them.
The advantage is modelled on government targets rather than current output. It credits Australia with the 82% renewable share the government targets for 2030, and extrapolates five of the six comparator markets from targets dated after 2030. Renewables supplied 42.1% of the National Electricity Market in the three months to June 2026, AEMO's highest second quarter on record. BloombergNEF forecasts just under 10GW of new wind by 2030 against the 18GW AEMO says the target needs, and does not expect Australia to reach 82%.
BloombergNEF attributes that wind shortfall to three things: rising costs, community opposition, and lengthy permitting and grid connection processes. Two of the three, permitting and grid connection, are what Mandala names for the data centres. A wind farm and a data centre lodge different applications under different regimes, and they wait at the same two counters.
AEMO counts 9GW waiting for a grid connection
AEMO counted 17 data centre projects and 9GW of maximum connection capacity in the National Electricity Market's transmission connection process at 30 June 2026, against 11 projects and 5.4GW three months earlier, and puts the wait from application to switch-on at about two years. Twelve of the 17, representing 7.6GW, had yet to move past the application stage, on AEMO's June quarter report.
Mandala gives no number for either delay anywhere in the 40 pages. Its own sentence, from chapter 3.2: "Australia is losing ground on two dimensions that increasingly determine where operators choose to build: time to build and power availability... connection queue times have become a binding constraint on how quickly new load can become operational." The two-page summary published alongside the report reduces that to two icons, approval times and grid connection speed.
The statement is explicit about where the approvals clock stays: "Commonwealth legislation will be designed to complement, not duplicate, state and territory planning and approval processes." State governments run planning approvals, and each runs them differently. Every state and territory has now published something of its own on data centres, and the standards sit inside the national AI plan announced on 15 July 2026.
Seven Asia Pacific markets, ranked by capacity and growth
Mandala puts Australia's operating capacity at 1.6GW, level with India and ahead of the other five markets it charts, and Australian growth at 5.6% a year between 2022 and 2025, the slowest of the seven.
| Market | Operating capacity | Growth a year, 2022–2025 |
|---|---|---|
| Australia | 1.6GW | 5.6% |
| India | 1.6GW | 26.4% |
| Japan | 1.5GW | 7.5% |
| Malaysia | 1.1GW | 221.5% |
| Singapore | 1.0GW | 6.0% |
| South Korea | 0.8GW | 43.6% |
| Indonesia | 0.4GW | 32.6% |
Source: Mandala, The Economic Contribution of the Data Centre Industry in Australia, August 2026, Exhibit 13, on Cushman & Wakefield data. Australia's capacity is measured at June 2026 and every other market at 2025.
Malaysia's 221.5% is growth off a base of about 33MW, roughly one mid-size building. Australia's 5.6% is growth off about 1.36GW, and implies an addition near 240MW, which is more than Singapore added and less than Japan, South Korea, India or Malaysia. The published figures are rounded to 0.1GW, so treat the smaller gaps as indicative.
CBRE put Melbourne's live-capacity growth at more than 30% year on year, second across Asia Pacific only to Johor in Malaysia, and kept Australia in the region's leading tier of data centre markets. Mandala's figure is a national growth rate averaged over three years. CBRE's is one city over one year.
What to watch
The Commonwealth intends to legislate the AI standards in early 2027. Three things are still undefined: what counts as a "large" data centre, how existing sites and expansions are treated, and how a site's net effect on the grid would be measured. A mandatory community payment was under consideration in July 2026. The statement's three limbs are energy, water and land use. Energy ministers are expected to turn the Australian Energy Market Commission's advice into formal rule changes from September 2026.
The capacity forecast underneath all of this has moved as well. Data Centres Australia published a forecast with DC Byte on 28 April 2026 putting Australia at approximately 1.4GW in 2025 and around 3.2GW by 2030. The August report cites DC Byte again, at 1.6GW now and 3.9GW by 2030. The 2030 figure is 22% higher than it was four months earlier.
AEMO's 2026 Electricity Statement of Opportunities, published on 25 August 2026, has data centre electricity use tripling to around 15TWh by 2029–30, and records network businesses reporting 225 data centre projects in the connection process.