At a glance
Assistant Minister Andrew Charlton argued on 23 September 2026 that data centres, planned properly, can strengthen Australia's electricity system rather than strain it.
He named three benefits: financing new generation, shifting demand out of peak hours, and spreading the fixed cost of the network across more electricity.
Network charges make up around 40 per cent of a typical electricity bill, Charlton said, and a data centre that connects where the network has spare capacity starts paying towards assets households already fund.
His list of what data centres should do includes one item the triple lock does not: locating where the grid has spare capacity.
National Cabinet intends to legislate mandatory data centre standards for energy, water and land use in early 2027.
Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton argued in an opinion piece published on 23 September 2026 that data centres can lower what households pay for the electricity network, provided the rules are designed to capture the upside and prevent the downside. The piece builds on the triple lock he set out at the Sydney Institute in June: bring your own supply, be demand flexible, and cover your grid connection costs.
Charlton's list of what data centres should do carries all three locks and adds a fourth expectation, that operators seek to locate where the grid has spare capacity. His network cost example assumes the network has that spare capacity.
Network charges are around 40 per cent of a typical bill
Households pay for poles, wires, substations and transformers whether they carry a little electricity or a lot, and network charges account for around 40 per cent of a typical bill, Charlton wrote. In some situations, he wrote, when a large data centre connects to part of the network with spare capacity, more electricity flows through the same assets and the fixed cost is spread across a larger volume. He compared it to a shared ride, where each added passenger lowers everyone's share of the fare.
Where a data centre creates or brings forward the need for new network build, Charlton said, the government is making sure the operator covers the full cost. Australian network modelling company Neara has estimated that 10GW of spare grid capacity is already available for Australian data centres.
Amazon and Firmus are Charlton's Australian examples
On generation, Charlton wrote that Amazon has contracted almost 1GW of renewable capacity in Australia, and in April 2026 announced nine agreements for 430MW of wind, solar and batteries in New South Wales and Victoria. Long-term customers of that size can sign the contracts that help get new renewable projects financed, he said.
On flexibility, Charlton cited Firmus and NVIDIA in South Australia, where Firmus and NVIDIA have agreed to reduce electricity demand for up to 220 hours a year at Firmus's planned AI factories when wholesale prices exceed agreed thresholds. An AI training job that finishes at 8pm rather than 6pm may make little difference to anyone, he wrote, and moving it out of the peak can reduce the expensive generation and network capacity needed for a few critical hours. NVIDIA chief executive Jensen Huang has made the case for trading guaranteed power for a faster, cheaper connection.
The US record shows lower prices and the PJM spike
Charlton cited a June 2026 study by Asa Watten, John Bistline and Geoffrey Blanford that found data centres caused average US retail electricity rates to fall modestly between 2015 and 2024, as fixed generation, transmission and distribution costs were spread across more demand. The authors note that future supply constraints could reverse the effect.
PJM, the grid operator covering all or part of 13 US states and Washington DC, is the case where supply did not keep up. Charlton said PJM's independent market monitor attributed 63 per cent of the increase in its 2025-26 capacity auction prices to data centres, around US$9.3 billion ultimately recovered from customers. Data centres, he wrote, will not automatically raise electricity prices, and will not automatically reduce them.
Mandatory standards are due in early 2027
Charlton said the Prime Minister's National AI Standards will set the terms for capturing those benefits. The nearest fixed date comes from National Cabinet, which agreed on 26 August 2026 to develop consistent mandatory standards for data centre energy, water and land use and intends to legislate them in early 2027.
Tim Buckley, director of think tank Climate Energy Finance, backed the position on LinkedIn on 23 September 2026, writing that the rules will decide which way prices move. The early 2027 drafting will show whether location joins the triple lock as a requirement for data centres in Australia.