Federal government releases data centre expectations

The document sets out five expectations of data centres and AI infrastructure developers in Australia.

According to the Department of Industry, Science and Resources, the expectations “aim to incentivise investment consistent with our national interests”. The department says this will form the basis of the social licence for AI infrastructure developers to operate in Australia.

While the expectations operate within existing state and territory regulations, they don’t alter any obligations for companies to comply with the law. However, there is a distinct incentive for developers to take them into consideration; the government will prioritise approval for projects that align most closely with the expectations.

What’s expected?

The five national expectations of data centres and AI infrastructure developers outlined in the document are to:

1. Prioritise Australia’s national interest
2. Support Australia’s energy transition
3. Use water sustainably and responsibly
4. Invest in Australian skills and jobs
5. Strengthen research, innovation and local capability.

The expectations target new and expanded large-scale and hyperscale data centre developments in Australia. Small-scale edge or on-site enterprise data centres are not expected to comply.

Call for regulations, not guidelines

In response to the announcement, the Australian Conservation Foundation (ACF) has commended the principles behind the expectations, but called for enforceable regulations rather than guidelines.

“We welcome the government’s direction and the inclusion of expectations relating to additional renewable energy supply and sustainable and efficient water use,” says ACF CEO and former Greens leader Adam Bandt. “However, giving these big tech corporations guidelines is not enough.

“Expectations are a vague policy intervention – we expect the government to build on these policy principles and set genuine, specific conditions to make sure data centres comply with these obligations.”

The ACF adds that, while generalised expectations around energy and water use could guide infrastructure developers down the right path, the document fails to outline more specific requirements for making data centres more sustainable.

“If you want to build a data centre in Australia, you should be compelled to build the renewables and water recycling infrastructure to service it,” Bandt says.

“We are disappointed the government has not listed any expectations relating to the siting of these data centres, to minimise impacts on nature, or relating to community benefits sharing and proper consultation with local communities and First Nations.”

Implications for HVAC&R

Cooling accounts for a large percentage of energy usage in data centres – up to 40% in some cases. According to a recent report, the total amount of energy consumed annually by Australian data centres could increase tenfold over the coming decade, with the sector potentially responsible for 11% of Australia’s total energy use by 2035.

This significant expansion appears certain to create both opportunities and challenges for those working in the local HVAC&R industry. For a more detailed look at what to expect, read the HVAC&R News feature article on data centre energy use from February 2026.

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