Australia is looking to promote data center investment as part of its National AI Plan.

The plan states that data centers, as well as associated energy projects, could benefit from a faster approval process and government support if they adhere to a set of “data center principles.”

Although the principles have not been finalized, they will relate to sustainability, renewable energy, and efficient cooling.

Australia will also aim to use data center development to promote investment in renewable energy.

Although several data center projects announced this year have committed to using renewable energy, Australia’s energy supply depends mainly on fossil fuels like coal, oil, and natural gas. According to the International Energy Agency, renewable sources only accounted for around 10 percent of the country’s total energy supply in 2024.

Australia is one of many countries which has enacted policies aimed at attracting data center developments, which are capital-intensive and ripe for investment.

In October, the state of New South Wales established an agency to support major investment projects in the state, including data center projects with an estimated development cost of AU$1 billion (US$655m).

A month before that, the government announced a pilot of its Investor Front Door policy, which provides regulatory and investment guidance for “major, transformational projects.”

The industry’s interest in the country has caused data center supply to expand by 40 times in 20 years, with two-thirds of this growth occurring from 2020 onwards, according to research from advisory firm M3 Property.

The Australian government is itself one of the industry’s largest customers. In July, the country’s Department of Defence signed a five-year AU$495 million (US$324.71m) deal with Microsoft to use its cloud computing services, and in September, the Department of Foreign Affairs and Trade began looking for a provider to help with a AU$106.2m ($69.4m) migration effort.

But demand for data centers has also sparked concerns about the readiness of the country’s electrical infrastructure.

Australia’s energy market operator, AEMO, estimates that data centers will account for around 2.2 percent of total electricity demand in 2025, and it is expected that their share of consumption could jump to at least eight percent by 2030.