Anthony Albanese will use Wednesday's national cabinet meeting to address growing state-level opposition to proposed federal controls on datacentre developments, arguing that a planned new AI approval law will complement rather than override state rules. The push comes as conservative-led governments in Queensland and the Northern Territory resist federal requirements that datacentres be powered by renewable energy rather than coal or gas, while the Australian Energy Market Operator warns that electricity demand from the sector is set to surge as AI and cloud computing usage grows.

AEMO's latest annual outlook found 165 datacentres are already operating nationally, with a further 225 in development, and forecasts electricity consumption from the sector could rise seven-fold over the next decade, from 5 to 34 terawatt hours by 2035-36 (potentially up to 52 TWh in a high-growth scenario), lifting its share of total demand from 3% to 13%. Albanese is expected to pursue major legislation next year covering copyright protections for creatives, security and safety standards, and minimum obligations requiring datacentres to avoid pushing up energy prices, cover their own infrastructure costs, minimise water use, and be sited away from homes, schools and farmland; projects already approved would remain subject only to existing state and territory laws. Climate Council chief executive Amanda McKenzie warned that with datacentres set to consume a huge share of Australia's power, "we've got one shot to get the rules right".