The Australian Government has released its first nationally consistent Expectations for Data Centres and AI Infrastructure Developers (Expectations). A significant policy signal for one of the fastest‑growing asset classes in the country. States and Territories will also implement the Expectations in their processes.
While not legally binding, these Expectations will shape how governments assess, prioritise, and engage with future projects. For developers, operators, investors, and landowners, this marks a pivotal shift in how digital infrastructure will be planned, powered, and integrated into communities.
WHAT DO THE EXPECTATIONS MEAN FOR PROPONENTS?
Proponents whose projects align closely with the Expectations are more likely to receive priority consideration through Commonwealth regulatory processes, with implementation expected to occur in coordination with States and Territories via the Energy and Climate Change Ministerial Council.
The Expectations apply to new or expanded hyperscale data centres and large‑scale AI compute infrastructure. Small‑scale edge and on‑site enterprise data centres are excluded. The Expectations do not create, vary, or extinguish any legal obligations arising under applicable legislation or regulation.
WHY THIS MATTERS NOW
Data centres are now being treated as nationally significant infrastructure, intersecting energy markets, water security, planning regimes and technology regulation. These Expectations are intended to provide clearer national signals and avoid fragmented state‑by‑state approaches.
EXPECTATIONS
These are the key steps data centre and AI infrastructure developers should take to meet the Expectations and position themselves favourably for Government priority:
Expectation 1 – Prioritising Australia’s national interest
- National interest: conduct business in ways which work for the benefit of the Australian economy, people and local communities.
- Good faith: operate in good faith, delivering positive outcomes while minimising adverse effects on local communities wherever possible.
- Community engagement: seek opportunities to build and maintain social licence through open and constructive engagement with the communities they operate within.
- Cyber security: protect sensitive and personal data, prepare for threats and disruptions, and limit physical and digital access to data centres.
Expectation 2 – Supporting Australia’s energy transition
- Clean energy: secure new and additional clean energy generation or storage to offset demand.
- Cover costs: cover your share of transmission and distribution infrastructure costs.
- Energy efficiency: minimise energy demand and emissions by adopting industry-leading efficiency measures and technologies.
- Security and stability of energy grid: improve overall security and stability of the energy grid, including by:
- enhancing demand flexibility and opportunities for peak-load management; and
- appropriately sharing consumption data.
Expectation 3 – Sustainable and efficient water usage
- Minimise water use: use innovative, efficient and sustainable solutions to minimise water use.
- Community engagement: engage early and work proactively with water utilities, communities and First Nations peoples to determine appropriate locations and use secure water sources based on local conditions.
- Efficient cooling: use efficient cooling technologies, and where possible use non-potable water and apply circular water opportunities.
- Cover costs: cover your share of water infrastructure and delivery costs.
- Resilience: build resilience into operations to mitigate the impacts of water disruptions, drought and climate change.
- Transparent reporting: provide ongoing transparent reporting about water usage and efficiency.
Expectation 4 – Investment in Australian skills and workforce
- Create jobs: create fair, safe, secure and well-paid jobs for Australian workers.
- Upskill workforce: invest in developing a skilled domestic workforce, including through apprenticeships and other structured training pathways.
- Collaborate with stakeholders: collaborate with governments, unions, education and training providers, and other employers to address skills gaps, support workforce development and help build a pipeline of skilled workers to support the construction and operation of data centres.
Expectation 5 – Research, innovation and local capability
Providers of large-scale compute, including hyperscalers and neoclouds are expected to contribute to research and innovation and should:
- Support small players: enable access to compute for Australian start-ups, innovative small businesses, researchers and not-for-profits on favourable terms.
- Local talent: deploy engineers and researchers in Australia to help build local technical and innovation capability and invest in Australian supply chains.
NEXT STEPS
For real estate stakeholders, data centres continue to blur the lines between traditional property, energy infrastructure, and advanced technology assets. This framework provides clearer signals on how future developments will be assessed and supported. As demand for compute accelerates, the intersection of technology regulation, infrastructure planning, and real estate development will only become more complex.
Developers, operators, investors and landowners should assess upcoming proposals against the Expectations at an early stage and consider how energy, water, workforce and community strategies are positioned.
Please get in touch to discuss how these expectations may impact your upcoming projects.
“Australia is open for business – but the kind of business that puts Australia’s national interest first.” – Minister for Industry and Innovation and Minister for Science, Tim Ayres
For further information, please contact:
Vince Baudille, Partner, Bird & Bird
vince.baudille@twobirds.com
