Labor Reportedly Plans to Ban AI Data Centres Near Homes and Tie Them to Renewable Power

The Albanese government is preparing to ban new AI data centres near homes and recreational facilities, The Australian Financial Review reported on October 29, citing people familiar with the plans. The proposal, also reported by Capital Brief, would be part of a broader package of AI laws that the government intends to release as drafts for public consultation before the end of the year. The government has not published the details.

According to the reports, data centres would also be required to run on renewable energy, and facilities that do not comply could face having their power cut. AI companies would have to disclose the content used to train their models. On copyright, the package would reportedly set aside an opt-out approach in favour of a model where rights holders negotiate directly with AI developers, while making sure smaller creators also benefit.

The planning measure follows local fights over where these facilities go. Goodman Group abandoned a proposed data centre at Lane Cove in Sydney, and NEXTDC’s M3 project in Melbourne was delayed by a dispute over power lines. In July, Prime Minister Anthony Albanese said large new data centres should pay for their own power and grid connections and limit their water use.

What it means in practice

For operators, a suburban ban would push new capacity toward industrial zones and regional areas with room for transmission and renewable supply. It also raises the question of how new rules would treat projects already in the pipeline, after reports that approved data centres are set to escape the new power and water rules. The AFR reported on October 30 that some operators warn the uncertainty could put investment at risk.

The copyright element would close one of the most heated debates of the year. Creators reacted angrily when leaked options pointed to an opt-out regime, and Anthropic said it would not train Claude in Australia until copyright is settled. Academics have also floated a Copyright Plus model with a creator payment pool.

What to watch next is the wording of the draft laws, including how close to homes counts as too close, whether the renewable rule applies to existing sites, and how disclosure of training content would work for overseas model developers.