At a glance
- First ministers met on 26 August 2026 and agreed the Commonwealth will develop mandatory standards covering data centre energy, water and land use, to be legislated in early 2027.
- The published statement leaves the choice of power source to the drafting. Developers build under existing state rules until parliament passes the standards.
- The Energy published a longer passage and says it comes from a communique from the meeting. That passage would let a jurisdiction use government-owned power stations and wires, where it can show the arrangement keeps the grid steady and customer prices lower.
- Queensland, the Northern Territory, Tasmania and Western Australia own their power stations. New South Wales, Victoria and South Australia sold theirs.
Albanese put data centre energy to the premiers on 26 August 2026
Prime Minister Anthony Albanese chaired a meeting of National Cabinet, the forum of federal, state and territory leaders, on 26 August 2026. Queensland and the Northern Territory had both said since early August that they would refuse a rule requiring renewable power.
The statement published on pm.gov.au runs to eight sentences on artificial intelligence. First ministers agreed that large data centres "bring material energy, water and land-use impacts that need to be managed". The Commonwealth "will work with state and territory governments to develop consistent mandatory standards for data centre energy, water and land-use". It intends to legislate them in early 2027.
The statement commits the Commonwealth to writing the standards with the states and legislating them in early 2027. Until parliament passes them, developers build under the rules each state already has.
Albanese told reporters the meeting produced "buy-in on Australia's national AI laws". Opposition energy spokesman Dan Tehan said the Prime Minister had been rolled, and that "the renewables-only energy plan for data centres has barely lasted a month".
The Energy published the wording of the energy test
The Energy published a longer passage on 26 August 2026 and attributes it to a communique from the meeting. It sets out how the energy test would work:
"Bring forward new renewable generation to fully offset their energy demand (with appropriate firming through gas, batteries or hydro), with jurisdictions able to use state-owned generation, transmission and distribution where it has clear benefits to grid stability and lower customer prices."
Firming is the backup supply used when the wind drops or the sun goes down.
Energy ministers had used the first half of that formula in July 2026, agreeing that data centres should invest in additional renewable generation and firming to "fully offset their electricity demand". The second half, covering government-owned power stations, is new. The Commonwealth and the states still have to settle whether a jurisdiction using its own fleet also funds new wind and solar.
Which states own their generators, and which sold them
| Jurisdiction | Main generation business | Ownership |
|---|---|---|
| Queensland | Stanwell, CS Energy, CleanCo | State |
| Northern Territory | Territory Generation | Territory |
| Tasmania | Hydro Tasmania | State |
| Western Australia | Synergy, and Horizon Power outside the main grid | State |
| New South Wales | Sold to private owners, though Snowy Hydro is Commonwealth-owned | Private and Commonwealth |
| Victoria | Sold to private owners, with the State Electricity Commission investing since 2024 | Private, with a state investor |
| South Australia | Sold to private owners | Private |
Ownership of the main generation businesses in each jurisdiction. Western Australia runs its own market outside the National Electricity Market.
Premier David Crisafulli put Queensland's case on ownership. "We own distribution, transmission, generation and that enables us to control that energy mix," he told AAP, and he told the ABC the outcome was a "good win" for Queensland. Chief Minister Lia Finocchiaro rested the Northern Territory's case on Beetaloo Basin gas rather than on ownership.
On our reading the ownership line would reach Tasmania and Western Australia as well, which is why we would watch it. Albanese's own explanation was narrower, that Queensland and the Northern Territory were in a "different position" to the other states, and ownership appears as the test only in the passage The Energy published. We track how each state and territory regulates data centres, and Queensland and the Northern Territory are the two that asked for the room.
The legislation will also carry conditions on AI training
The last sentence of the statement's artificial intelligence section commits the Commonwealth to legislating the standards in early 2027 "including conditions associated with delivering AI training". We read that as training people rather than training machines, because it is the sense the Commonwealth's own documents use.
Its expectations of data centre developers, published on 23 March 2026, ask operators to "invest in developing a skilled domestic workforce, including through apprenticeships and other structured training pathways", and to work with "governments, unions, education and training providers, and other employers to address skills gaps". A separate expectation asks the large compute providers to enable "access to compute for Australian start-ups, innovative small businesses, researchers and not-for-profits on favourable terms", meaning time on their computing power.
The statement puts training conditions into the bill the Commonwealth intends to introduce in early 2027.
Bowen and the states have to agree what counts as a benefit
Chris Bowen had said on 23 August 2026 that the Commonwealth would legislate the energy rules over Queensland's objection. He and the premiers have left three things to the drafting: what a clear benefit to grid stability and lower customer prices means, who applies that test, and how often.
Zerra DC has a campus at Kogan in southern Queensland before Western Downs Regional Council. Its plans propose four buildings of 360MW, and its technical appendices set out an electrical design for six. The site stands about 600 metres from the Braemar transmission substation, with the Braemar, Braemar 2, Darling Downs and Daandine gas-fired power stations in the surrounding area. An Origin Energy spokesperson confirmed to The Energy on 26 August 2026 that Zerra had approached the company about the proposal, given that its own facility is nearby. Origin owns the Darling Downs gas and solar plants.