Queensland and the Northern Territory have rejected federal Labor's proposal to force AI datacentres to use renewable energy, deepening a dispute over how Australia manages the rapid growth of the power-hungry technology. Prime Minister Anthony Albanese wants binding national standards requiring datacentres to generate renewable energy, minimise water use and offset their power consumption, but the two Liberal-National state governments dismissed the plans as "underdeveloped ideas" that centralise power in Canberra at the expense of their residents.

The disagreement emerged at a meeting of state and federal energy ministers, with Queensland having first raised objections in May and the NT joining the opposition this week. Every other state backed the commonwealth's push for nationally consistent rules, including requirements that datacentres underwrite new renewable supply and face no price impacts for consumers. The stand-off comes as ratings agency S&P Global warned that datacentre electricity use could grow five-fold by 2035, reaching 10% of Australia's total consumption, and that mismatched timelines between datacentre construction and renewable energy projects could send power bills sharply higher. Despite the states' objections, the federal government says it will proceed with its regulatory plans regardless.