Queensland and the Northern Territory have rejected the federal government's proposal to mandate that AI datacentres use renewable energy, criticizing the plans as underdeveloped and an overreach of federal power.
The move deepens a federal-state dispute over how to manage Australia's growing artificial intelligence infrastructure amid concerns about electricity demand and costs.
The Albanese government had pushed for regulations to ensure power-hungry AI datacentres prioritize renewable energy sources. Both states rejected the approach, with officials dismissing the proposals as lacking substance and attempting to centralize control in Canberra.
The dispute comes as a rating agency warned that electricity bills could skyrocket without proper management of AI infrastructure demands. Australia's surge in AI investment has intensified pressure on the nation's energy grid, with datacentres consuming significant power resources.
The rejection highlights tensions between federal and state governments over responsibility for energy policy and technology regulation. Queensland and the Northern Territory are pushing back against what they view as federal overreach, preferring to manage their own energy and infrastructure policies.
The disagreement leaves Australia's approach to regulating AI datacentres uncertain as the technology sector continues rapid expansion.
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