Beetaloo gas-powered data centre becomes first test of Albanese's vision for an AI boom powered by renewables

A proposed $40 billion gas-powered AI data centre in the Northern Territory has become an early test of Anthony Albanese’s plan to ensure Australia’s artificial intelligence boom is powered by new renewable energy rather than fossil fuels.

Environmental groups say the project, which would be fuelled by Beetaloo Basin gas, risks locking in decades of emissions after the Prime Minister announced future large-scale data centres would be required to underwrite new renewable generation and minimise their environmental footprint.

The NT Government has granted Beetaloo Digital exclusive rights to 185 hectares of land at Weddell, about 30km from Darwin, to investigate two hyperscale AI data centre campuses powered by Beetaloo Basin gas.

The proposed data centre would require up to two gigawatts of power – more than six times the peak electricity demand of Darwin and Katherine, according to the ABC.

It would also require 4 gigalitres (4 billion litres) of water per year, sourced from the Montejinni Limestone Aquifer in the Georgina Wiso Basin.

Greenpeace Australia Pacific said the proposal was a “shocking example of the unchecked expansion of hyperscale data centres in Australia”.

“This proposal mirrors the frenzied, unchecked expansion currently wreaking havoc on communities in the US,” said Joe Rafalowicz, the organisation’s head of climate and energy.

“We are seeing cowboy data centre operators treat Australia like a playground, steamrolling ahead with projects that would lock down precious water resources and spike emissions, despite the overwhelming community opposition.”

Critics argue the rapid expansion of data centres risks driving a new wave of fossil fuel development.

“The Beetaloo Energy proposal is exactly what happens when AI data centre expansion collides with an expanding gas industry and a broken offset system,” said Australia Institute advocate Louise Morris.

The Australia Institute is concerned the proposal would “lock in decades of new fossil fuel infrastructure”, arguing the project’s emissions could, in theory, be offset by purchasing Australian Carbon Credit Units generated under the proposed Great Koala National Park ACCU method.

“The Safeguard Mechanism was supposed to stop this kind of growth in industrial emissions,” said Ms Morris.

“Instead, its reliance on offsets rather than real abatement means a company can keep polluting if it buys credits, many of which do not represent real or additional carbon removal.”

Earlier this month, the Prime Minister detailed how the government plans to regulate the AI sector, saying there will be “clear rules” for where large data centres are built and the power and water they use.

“We will create a legal obligation for the next generation of large-scale data centres to underwrite new power supply,” he said in a speech at the University of Sydney.

“To pay their full share of grid connection, so no costs are passed on to homes or businesses and to put at least as much energy into our grid as they take out of it.

“To be net-generators, not net-users.”

He said data centres would also be required to minimise their water use, maximise their energy efficiency, and pay for any additional water infrastructure required.

“Australia is the sunniest continent on earth, but we’re also the driest,” he said.

The NT’s Minister for Trade and Business Robyn Cahill sparked confusion earlier in the month when she suggested water use by the data centres could help correct the earth’s axis.

“The water supply that Darwin has is extraordinary. There’s scientific evidence to suggest that we have so much water underground in the Northern Territory that it actually impacts the axis of the earth when we have a really bad wet season,” she said.

The NT’s Finocchiaro government is eager for the Territory to become the “data centre capital of the globe”, with 12 data centre ventures reportedly in talks about projects.

“Data centre proponents are looking to the Territory because of the promise of reliable and affordable Beetaloo gas-to-power supported by renewables, and because of how close and connected we are to major Asian markets and digital superpowers,” Chief Minister Lia Finocchiaro said.

“The Territory has the answer to everything this country needs to be successful, including energy, digital capacity, defence, minerals, and agriculture.”

Beetaloo Energy managing director Alex Underwood said the company planned to “deliberately oversize” the proposed Weddell power plant so it could supply electricity to Darwin’s grid rather than draw from it.

He said the company’s vision for the project was “bold but simple” and aimed “to create a fully integrated energy and digital infrastructure precinct”.

“The demand for power into data centres, both here in Australia and globally, is truly insatiable,” he said.

“This, in my opinion, is the next wave of the Industrial Revolution.”