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Data Centres: Boom and Backlash
24SEP

Victoria makes data centres bring power

1 min read
13:52UTC

Victoria's new plan requires future data centres to supply renewable generation and storage matching their demand, pay their own grid costs and cool without drinking water.

IndustryAssessed
Key takeaway

Victoria will require new data centres to bring their own renewable power and storage.

Victorian Premier Ben Carroll released a Sustainable Data Centre Action Plan on 22 September that requires new data centres to supply new renewable generation and storage to match their demand⁠1. They must also pay their own connection and network costs. The plan, released with the state's Minister for AI and Digital Economy, Anthony Carbines, says data centres should become "net generators not net users".

New sites may not use drinking water for cooling; where other water is not yet available, operators must offset their use and fund upgrades. They must sit 150 metres from homes and away from schools. Each also owes a "Local Investment Guarantee" of jobs, vocational training courses and parks.

None of it is retrospective, which means approved projects and eight applications already before the minister are exempt⁠2. New South Wales took power in August to bar large loads from its grid; Victoria has now written the terms that decide who gets on.

Deep Analysis

In plain English

Victoria's government released a plan requiring new data centres built in the state to generate and store their own renewable electricity, cover the cost of connecting to the grid themselves, and stop using drinking water to cool their equipment. The rules apply only to future data centres, not ones already operating, so no existing facility has to retrofit to comply.

Deep Analysis
Root Causes

Victoria's plan pushes costs data centres previously shared with the wider grid, connection upgrades and firming power, back onto individual projects.

It is the same 'pay your own way' principle Texas applied this fortnight, arrived at independently through Australia's separate state energy-planning process rather than any coordination between the two governments.

First Reported In

Update #15 · Texas freezes data-centre permits

Premier of Victoria· 24 Sept 2026
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Causes and effects
This Event
Victoria makes data centres bring power
None of Victoria's rules applies to approved projects or the eight applications already before the minister, ABC News reported, so they govern the next wave of builds.
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.