‘New energy for new demand’: SA plans Data Centre and AI infrastructure Act
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The news: The South Australian government has announced plans to introduce specific legislation aimed at streamlining the development of data centres and AI infrastructure while ensuring energy needs do not put pressure on bills and sustainable water use.
The proposal is outlined in a new data centre strategy released by the state government on Tuesday.
The context: Plans for data centre specific legislation follow the release of federal level expectations at the end of December, which is now being implemented by state and territory governments.
The act will include requirements that data centre developers “match demand growth with new, firmed supply” to ensure that there is “new energy for new demand” and no adverse impact on consumer power bills.
It also signalled that data centres will need to facilitate operational adjustments to maintain grid stability, provide transparency on energy use, comply with “clear technical standards” and “ensure network costs are allocated fairly”.
Water needs will also need to be sourced sustainably through supply planning, monitoring of material changes and requiring efficient cooling technology. The act also aims to support staged approvals and connections, coordination of assessment pathways and reduction of duplication.
This follows from the hydrogen and renewable energy act that came into effect in July 2024, which similarly sought to establish a “development-ready renewable energy pipeline” with a streamlined regulatory scheme. The Malinauskas government said this has helped facilitate a pipeline of 74 projects worth upwards of $32 billion and more than 25 gigawatts.
The proposed legislation is part of a wider six-point data centre action plan, which includes a number of initiatives that are already underway or being developed.
This includes development of a dedicated planning pathway that includes designating data centres as essential infrastructures to enable a crown sponsorship scheme. The scheme is already established and enables close state government support and the bypassing of standard local council assessment.
The SA coordinator general has also been given the power to designate to accelerate data centre developments.
The government also plans to engage with data centre proponents and AI companies to establish partnerships and increase support to scale AI research and development.
What they said: “South Australia’s leadership in renewable energy, our record investment in higher education, our unashamed pro-jobs and pro-business outlook and appointing the nation’s first dedicated Minister for Artificial Intelligence means we are uniquely placed to seize the opportunities of AI,” SA Premier Peter Malinauskas said in a statement.
“Data centre development is happening in Australia and could substantially expand in South Australia.
“But if this is going to happen in our state, it needs to be done on our terms, which means it can’t have negative impacts on our electricity market or result in unsustainable water use.”
Industry group Data Centres Australia CEO Belinda Dennett, whose statement is included in the state government’s media release, said: “Data Centres Australia welcomes the Premier’s commitment to attracting data centre investment to South Australia and his recognition of the economic opportunities building the infrastructure of the artificial intelligence era, will bring”.
“We welcome the Data Centre Strategy and the proposed dedicated planning pathway to accelerate data centre development which provides certainty to investors and customers.”
The sources: SA government media release, SA Data Centre Strategy
