Data centre expectations avoid ‘mistakes we made in the resources boom’: Andrew Charlton
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The news: Assistant Minister for the Digital Economy Andrew Charlton has argued that without the government’s data centre expectations, Australia risks making “the same mistakes we made in the resources boom” in a speech to the Sydney Institute.
The context: As economists and commentators increasingly draw comparisons with the data centre investment opportunity and the resources boom in the 2000s and 2010s, Charlton said the government needs to keep domestic interests as its principal priority.
“We became one of the largest gas exporters on earth and then watched households and factories pay more for gas dug up beneath their feet,” Charlton said.
“Successive governments allowed global markets to effectively set the domestic price. We let the boom set the terms, instead of setting the terms of the boom.”
While he claimed that the Albanese government has “moved to repair the gas market through a domestic reservation policy”, he said it is a “fix arriving a decade after the damage was done”.
“That is the real lesson from gas for data centres: it’s far better to get the rules right at the outset than to try to put them right a decade later.”
With that in mind, he described the government’s data centre expectations — that tells data centre developers to “bring your own supply, cover your grid connection costs, and be demand flexible” — as “Australia’s triple lock” against upwards pressure on energy costs.
While Charlton acknowledged concerns regarding water consumption for the cooling of data centres, he noted that there are existing market rules requiring the use of modern closed loop designs “which use up to 10 times less water than their open loop predecessors, and are between 5% to 15% more energy efficient”.
What they said: “We have the leverage and natural advantages now, at the start of the data centre boom, to shape how this unfolds,” Charlton said.
“We can learn the lessons of our past booms, like LNG, and lessons from countries overseas. If we set the conditions early this boom could leave us with more capacity than we started with, not less.”
The source: Andrew Charlton speech
