Victoria, Australia, proposes mandatory renewable energy sourcing for data centers and provisions limiting cost-shifting and water consumption

Victoria, Australia's southeastern state, has proposed new rules requiring data centers to secure renewable energy supplies for their operations as part of its 'Sustainable Data Centre Action Plan.' The rules set out several new requirements that data centers must meet to build in the region.

Data centers must bring their own renewable energy supply and storage, match new demand with new generation, and cover connection and network upgrade costs—effectively requiring them to be net generators to the grid rather than net users.

Cooling systems must use recycled or non-drinking water. If operators cannot meet this immediately, they will be required to offset the water they use and pay for necessary infrastructure upgrades.

Data centers cannot be sited in residential areas, including near schools and childcare centers, or in rural areas unable to support them. A 150-meter buffer zone must separate new facilities from residential areas. Operators must also implement responsible traffic management plans during construction and operation.

The rules include community-focused provisions requiring local investment guarantees at each site. These benefits, subject to consultation, could include jobs, TAFE training facilities, parks, and other offerings. Operators must support training for state residents and prioritize local hiring over bringing in outside talent.

"In Victoria, we set the rules – data centers must power themselves, protect homes and pay their way," the Victorian premier said. "If we get that right, we can all share in their economic benefits, especially the local community."

The proposal follows similar efforts across Australia. Last month, New South Wales proposed requiring data centers to source at least 40 percent of their energy from wind. The federal government also floated plans for renewable energy requirements but withdrew the mandate after objections from multiple regions. Queensland premier David Crisafulli said that such decisions should be made by state officials, who manage the power systems serving their populations.