At a glance
Microsoft wants renewable energy deals it signed for future data centres to count under the new national rules, rather than the clock resetting when they start.
Google asks for consistent national settings and for frameworks that let data centre investors fund new renewable generation.
Energy consultancy Nexa Advisory wants certificates from existing generators excluded and new supply running before a data centre draws load.
The Business Council of Australia and the Northern Territory Government both argue for a role for gas.
Senators hold hearings in Canberra on 1 October and Darwin on 3 November, and report on 16 November.
The Senate inquiry into artificial intelligence and data centres had published 195 submissions by 29 September, up from 54 at the start of the month. The later set carries three of the hyperscalers in Australia, Microsoft, Google and Amazon Web Services, along with AirTrunk, CDC, the industry's peak body Data Centres Australia, the Business Council of Australia, iron ore miner Fortescue and the Northern Territory Government. The committee holds its next public hearing in Canberra on 1 October.
Energy ministers agreed on 28 July that data centres must offset their demand with additional renewable generation in the state or territory hosting them. Which purchases count, and when the new generation has to be running, is still to be settled in the rule changes that follow.
Microsoft, which has 868MW of renewable generation contracted in Australia, asks that investments made to offset future data centres count, wherever they sit in the National Electricity Market, and that new generation be allowed to come online after a data centre opens. The Clean Energy Council, the clean energy industry's peak body, would accept contracts with existing generators as a stopgap. Nexa Advisory would exclude certificates from existing projects.
868MW of renewables already under contract
Microsoft has 29 Australian data centre sites, owned and leased, and has committed A$25 billion in Australia to the end of 2029. Its submission puts its contracted Australian renewable capacity at 868MW, of which 478MW is already supplying the grid.
Microsoft's first Australian power purchase agreement backs the 300MW Walla Walla Solar Farm in the New South Wales Riverina, in full operation since October 2025. A 10-year agreement with energy company ENGIE covers the 250MW Goorambat East Solar Farm in Victoria, and a 15-year renewable energy certificate agreement covers AGL's Rye Park Wind Farm in New South Wales.
Microsoft supports the principle that new large loads should add renewable generation. It asks that the rules "recognise prior investments in renewable generation that were made to offset future data centre developments, rather than resetting the clock to the day any new rules commence".
On timing, it asks for flexibility "rather than requiring renewable projects to be operational before data centre facilities commence operation", because generation and transmission take longer to build than a data centre. It names the NSW data centre guidelines as "a reasonable model for this". Those guidelines require contracted supply to match a data centre's annual average demand from its fourth year of operation.
Ministers want the power built in the same state
The 28 July ministers' communique places the new generation "in the jurisdiction where the data centre is located, unless the jurisdiction opts out". Microsoft asks that renewable, storage and firming investments "be recognised regardless of the specific state or territory in which a data centre is located", rather than matched state by state.
The Australian Energy Market Commission, which writes the electricity rules, said in its detailed policy assessment for ministers that it preferred data centres to source generation and firming from "the most efficient locations", and that a same-state requirement could raise their compliance costs.
Microsoft also asks that firming obligations be technology-neutral, and that demand flexibility, where a data centre cuts its draw when the grid is stretched, come through market-based mechanisms "rather than fixed mandatory requirements", because data centres carry essential services. New obligations should apply to new projects and material expansions, with transition arrangements for projects already committed or progressing through approval and connection.
Google and AWS point to contracts already signed
Google's submission asks the committee to endorse "clear, consistent and durable national settings" and to support "frameworks that enable data centre investors to fund net new renewable generation as part of their development". It says Google pays for all the electricity its data centres use, and cites the 25MW Mulwala solar farm, a joint project with AirTrunk and renewable developer European Energy Australia. Hyperscale investment decisions, it says, are "20- to 30-year commitments".
Amazon Web Services puts Amazon's Australian renewables at an estimated A$2.8 billion across 20 projects since 2020, about 990MW once all are running. That portfolio grew by 430MW in April. AWS describes buying carbon-free energy to match consumption as "now becoming a standard requirement for data centre developers" under the federal reforms.
Submitters divide on whether existing generation counts
Microsoft, the Clean Energy Council, Nexa Advisory and the Business Council all accept that data centres should bring new supply. They divide on what counts in the meantime and on timing.
Submitter | Existing generation or earlier contracts | When new supply must be running |
|---|---|---|
Microsoft | Count investments made ahead of future data centres | Can follow the data centre opening |
Clean Energy Council | Contracts with existing generators as a bridge; if certificates are used, new projects only | Bridge covers the gap while new projects build |
Nexa Advisory | Certificates from existing projects should not qualify | Before the data centre's load arrives |
Business Council of Australia | Credible commitments to new supply, not guarantees of projects operators do not control | Data centre and generation proceed together |
Source: Senate submissions 64, 158, 181 and 194, Senate Environment and Communications References Committee, published September 2026.
The Clean Energy Council says operators "could bridge the gap by contracting PPAs with existing renewable generation and storage assets" while new projects build. If certificates become the compliance tool, only output from new projects should count.
Nexa Advisory goes further: "REGOs from existing operating projects should not qualify", referring to the government's renewable electricity certificates. It wants the requirement applied early enough to "allow new supply to be delivered before the associated data centre load materialises".
Fortescue backs a requirement that new large data centres "secure new and additional clean energy generation and/or storage sufficient to offset their demand", and asks that the rule recognise "equivalent additionality outcomes for off-grid or private-network projects". It points to the Pilbara, where data centres running on dedicated renewables off the main grids "would not compete with households or any other electricity users for existing grid capacity", and where the same generation could supply decarbonised mining and green iron production.
The commission's advice to ministers, as summarised by law firm King & Wood Mallesons, would accept certificates from existing generators at first, with a long-term intent that they come from new ones.
The Business Council and the Northern Territory argue for gas
The Business Council of Australia asks the committee to "recognise gas firming as a legitimate part of the mix". It calls the New South Wales guideline that data centres source 40% of their energy from wind "the wrong kind of intervention", because it prescribes a technology. On additionality, it says operators should "make credible commitments to new supply, not guarantee projects they do not control".
The Northern Territory Government plans to support large data centres "underpinned by dedicated standalone power generation", outside its regulated electricity systems, drawing on its gas and renewable resources. It names the Beetaloo gas basin as able to support that investment, and "does not support a mandatory requirement for data centre developments to fully offset their electricity demand through investment in additional renewable generation". Queensland and the Northern Territory were the two jurisdictions outside the ministers' 28 July offset agreement.
The Clean Energy Council's own model keeps a place for gas: solar and wind backed by batteries, "with gas peaking capacity available for additional reliability when needed". Data Centres Australia notes that matching supply hour by hour, rather than across a year, "precludes the use of natural gas (and similar) firming technologies".
Operators back the rules and ask for cost transparency
Data Centres Australia says of the new federal and state requirements: "The sector supports them." It adds that their total cost has to be weighed against other markets, because "Capital is mobile."
AirTrunk, which argued in August for the rules to be phased in, agrees in its submission that data centres should pay the costs they cause. "Proponents can face significant information asymmetry when negotiating major transmission augmentation," it says, and asks that network costs "reflect causation and be capable of independent verification".
CDC calls the NSW guidelines demanding and values their clarity: "We would rather work to a demanding standard that is clearly understood" than operate under uncertainty. It asks policymakers to separate speculative proposals from projects with contracted customers, financing and a delivery record.
What to watch
Canberra, 1 October. The committee has not yet published its witness list, so it is not known whether Microsoft, Google or AWS will give evidence.
Darwin, 3 November. The committee sits in the territory whose government plans standalone gas-backed data centres.
The rule changes. Whether certificates from existing generators count, and for how long, decides how much of Microsoft's and Amazon's contracted portfolios carries across, and what the rules ask of the companies building data centres in Australia.
The report and the bill. The committee reports on 16 November. National Cabinet intends to legislate mandatory data centre standards in early 2027, and the committee's recommendations come before that bill is drafted.