Wednesday, 12 August 2026

 Sarah MANSFIELD (Western Victoria) (10:42): I move:

That this house:

(1)   notes that:

(a) the Victorian Labor government has publicly committed to aggressive investment in artificial intelligence (AI) data centre development across Victoria;

(b) Victoria’s data centre energy demand has nearly doubled over the last 12 months to 187 megawatts and some estimates predict data centres could consume 8 per cent of the state’s electricity by 2030 and up to 19 per cent by 2050;

(c) there are at least 30 more data centres currently proposed for Victoria, which will consume 9 gigawatts of power, or the equivalent of 5 million to 7 million homes;

(d) the Climate Council forecasts that data centre growth will inflate Victoria’s wholesale power prices as much as 23 per cent by 2035;

(e) the Climate Council also identified that the enormous electricity demands of AI data centres will threaten Victoria’s net zero target by prolonging our reliance on burning coal and gas; and

(2)   requires the Leader of the Government, in accordance with standing order 10.01, to table in the Council, within four weeks of the house agreeing to this resolution, all modelling, including under different scenarios, and briefings that the government has received from departments and commissioned advice regarding data centres and the current and anticipated impact on wholesale and retail energy prices.

Labor is rolling out the red carpet for data centres without any safeguards to protect our energy system, water security, environment, community amenity or jobs. The threat to our energy system is one of the most pressing issues that needs to be addressed. We know that members of the government themselves are worried, and they are right to be worried. Data centres are huge industrial warehouses filled with servers and storage needed to process vast amounts of digital information required by tools like ChatGPT and Claude. Data centres, particularly hyperscale data centres that do things like AI training, house thousands of specialised chips called graphics processing units and are very energy intensive. There are over 40 operating in Victoria now, but this is expected to grow substantially, with over 30 new ones planned.

At the moment data centres in Victoria use about 2 per cent of the state’s grid-supplied energy. Conservative estimates by Oxford Economics Australia predict AI data centre energy demands in Australia will more than quadruple by 2030. As AI data centres put increasing strain on the grid, there is a real risk the Labor government will keep dirty coal-fired power stations open for longer than planned to meet that demand. It is already happening. Our coal use is not declining despite more renewables coming online, in part due to the existing data centres. As things stand, most AI data centre electricity needs will not be met by additional renewable energy, regardless of the wishful greenwashed thinking of some Labor members. Consequently, the AI data centre boom represents a massive threat to Victoria’s transition to clean and cheap renewable energy, unless the government urgently intervenes. Most AI data centres also produce their own climate emissions and use diesel generators and gas turbines to maintain a constant supply of energy in case the grid fails. Gas companies are jumping on board the AI data centre boom and are quietly joining the data centre lobby group Data Centres Australia. Given the Victorian Labor government’s love of gas, the prospect of data centres setting up new gas-fired power plants is very real.

All of this not only puts our emission targets at risk and our energy grid under pressure but is going to drive up electricity prices. Because data centres draw substantial amounts of power continuously and their use is inflexible, this tightens the balance between supply and demand and raises market prices. The increased need for infrastructure – that is, the poles, wires and substations – adds to those prices, and the increased reliance on dirty, expensive fossil fuels driven by data centres further adds to this mix. This is not a theoretical risk. We only need to look overseas to see our potential future. In Ireland, for example, data centres use over 23 per cent of that country’s energy, not dissimilar to predictions for Victoria over the next two decades. Over an eight-year period this data centre expansion has added the equivalent of over A$580 to the average Irish household power bill. People are already struggling through an energy crisis, and this is only adding to household financial stress. It is predicted that data centres will add between a further A$480 and over A$1000 to the average Irish energy bill.

The Climate Council predicts that the next at least 30 new data centres currently proposed for Victoria will consume over 9 gigawatts of power. That is the equivalent of 5 million to 7 million homes. Just one data centre, the project proposed in Plumpton in Melton, would use more electricity than Victoria’s largest coal-fired power station, Loy Yang A, can produce. That is incredible.

Knowing all of this, it would be incredibly negligent if the government did not do some of its own modelling before adopting a huge data centre growth and investment strategy. Surely they would want to have an idea of just how much power these data centres are going to need, what effect it is likely to have on our grid and what effect it is going to have on household bills. And given how volatile our energy markets are right now and the different unknowns, you would think they would want to model a range of different scenarios. Of course given past form, it would be entirely unsurprising if Labor have not actually done any of this, but I am pretty sure they have. That is why we are calling for the release of this modelling – because the public deserves to know what Labor know about how high energy bills are going to go because of their own reckless embrace of hyperscale data centres.

 Sheena WATT (Northern Metropolitan) (10:46): Thank you so much for the opportunity to rise and make a contribution on this short-form docs motion brought to us by Dr Mansfield, and in making a contribution today can I just highlight, as is convention in this place, that the government will not oppose this documents motion. Certainly there has been so much movement and change with respect to artificial intelligence and data centres that it is hard to capture it in the time that I have, but I will just say that it is very clear to all that artificial intelligence is not just an emerging technology of the distant future, it is here, it is right now and it is already shaping how we live and how we work. Victoria is home to Australia’s largest AI cluster, with 188 companies choosing to invest here in our state. The digital economy currently contributes more than $36 billion to the state, supporting over 300,000 specialist jobs, which equates to about 30 per cent of Australia’s tech workforce. Looking ahead, AI has the potential to generate up to $30 billion for the Victorian economy over the next decade, which means thousands of new highly skilled jobs.

It is important to note that data centres are not new to our state. We already have nearly 60 of them operating in Victoria, which is new in the scale of the opportunity that is before us. Our government certainly deeply recognises that this vast opportunity must be managed with incredible responsibility. We welcome the recent statements made by the Prime Minister which noted that there is a need to embrace AI to create good-paying jobs, but we also need to ensure that clear, strong guardrails are established. To this end the Commonwealth government is undertaking critical work. They have established the office of artificial intelligence within the Department of Prime Minister and Cabinet, which will oversee a national framework and legislation to govern large-scale AI data centres. They will continue to work closely with Commonwealth partners to ensure that this investment benefits Victorians, while managing any impact on our land, water and energy.

At a state level the government is proactively creating the artificial intelligence and digital economy portfolio to lead this important work, and can I acknowledge Anthony Carbines, who has taken on that role, which is of course supported by the $5.5 million investment into the sustainable data centre action plan – a plan that will harness our state’s resources to unlock up to $25 billion worth of projects through an evidence-based approach using transport, energy and water usage data to determine where these centres can be built sustainably.

We know that data centres have significant energy and cooling requirements. It has been discussed in this place a few times, which is exactly why renewables are key to this transition. We are backing the energy system that underpins the growth of data centres by restoring the SEC to publicly drive the renewable transition, keeping us on track for 65 per cent renewable generation by 2030 and 95 per cent by 2035. Crucially, it is worth noting – perhaps it was as recently as in the last couple of weeks – that the Commonwealth has issued a direction that data centres will need to provide additional renewable energy supply and cover the cost of doing so.

We are also protecting our natural resources. Before any approval is granted, water corporations must be satisfied that water security and supply can be met without negatively impacting local communities, utilising Victoria’s position as having the largest supply of class A recycled water in the country. Every single project must go through a rigorous assessment process under the Planning and Environment Act 1987, carefully evaluating potential environmental impacts such as noise, air pollution, traffic and fire risk.

We are also ensuring that Victorians are ready for the jobs this industry will create, because we need to make sure that the people who are being affected by this technology and using it every day are also the ones leading it. To make this happen we have invested over $8 million into the digital jobs program, an AI career-conversion initiative that will upskill workers and safeguard jobs in at-risk industries. Can I just take a moment to acknowledge the former Minister for Skills and TAFE Gayle Tierney, who has done such incredible work with free TAFE, including the fact that free TAFE has coverage of some courses that will be fully subsidised, including the certificate III in information technology and the certificate IV in cybersecurity. These are important opportunities to make sure that Victoria can fully embrace the new tech that is coming very, very quickly and in fact in many cases is right here.

There is a comprehensive plan to strike the right balance. We are embracing the opportunities of digital innovation. We have recalibrated the cabinet to include a specific call-out for AI, artificial intelligence. We are also ensuring that we responsibly protect our environment, our energy grid and the communities we serve. That is why I am looking forward to this debate continuing in this place, in the knowledge that this is something that has been brought before us before, and I look forward to speaking on it again when it comes here. But as per convention, I will reaffirm to the chamber that the government will not oppose this documents motion that is before us. Again, I take the opportunity to thank Dr Mansfield for bringing it to our chamber.

 David DAVIS (Southern Metropolitan) (10:53): I am pleased to rise and strongly support Dr Mansfield’s motion today to bring forward documents relating to data centres and artificial intelligence. I will not go through the top part of the motion – I will come to that in a minute – which lays out the situation as it were. But the second part of the motion, under standing order 10.01, requires tabling in the Council within four weeks of:

… all modelling, including under different scenarios, and briefings that the government has received from departments and commissioned advice regarding data centres and the current and anticipated impact on wholesale and retail energy prices.

The government in Victoria has dropped the ball on data centres. On one hand it does appear that there is no thoughtful, broad, overarching plan. On the alternate hand there is the fact that the government has approved data centres – controversial data centres – in record time without what I would regard as proper assessment. Proper assessment does mean proper planning assessment of impacts on local areas. It means environmental assessment. It means an understanding of the energy requirements and what the data centre may bring to that challenge and of issues around some other key inputs as well.

The one in Fishermans Bend, for example, was done in about 70 days. It was very short. I have read the report through – it is not a long read. What it looks like to me is a very shallow and inadequate assessment, and this seems to be the pattern that we are seeing with the government across the state. If they have commissioned modelling, the community should see it. If they have got briefings and inputs, the community should see them. We should know what they are working on. I do not think this government is working on a lot in this area. I think they are going by the seat of their pants. They have decided they like data centres and they want to sign up. We have no intrinsic opposition to data centres; we see them as an important part of the future economy. However, as with other things, they have got to be properly planned and thought through. That means processes which require checks and balances to make sure that communities are not overridden, and they require those input questions – energy principally – to be thoughtfully dealt with.

The Prime Minister has come forward with some big contributions. I might say that it troubles me, the idea that the Department of Prime Minister and Cabinet would be undertaking planning processes and so forth. This does appear to me to be a grab for power from Canberra – from the centre – to insert the Department of Premier and Cabinet into all aspects of data centres, and that chills me, I might say. I understand that some harmonisation of arrangements might be a good idea and might have some relevance, but that is a different thing from an imposition and an overreach by the Prime Minister, which I think is what has occurred here.

I am going to just quote briefly from a brief that has been provided to me by Clayton Utz. It is actually a very useful one. It states:

What are the challenges?

•   Fragmented state-by-state policy landscape

•   New South Wales parliamentary inquiry creating near-term investment uncertainty

And we will certainly be watching that New South Wales inquiry quite closely. And the brief goes on:

•   PM’s “net generators not net users speech” – legal obligation for large-scale DCs to underwrite new renewable generation …

It is important to understand the reliability requirements for data centres – 99.999 per cent. The briefing from Clayton Utz says that is no more than 5.26 minutes of unplanned downtime per year. These are very, very high requirements.

I was talking to Mr Galea before, saying that many of the data centre operators come into my office. I talk to them and try to understand what they are seeking to do. I do ask them the question of whether they have one of those dirty diesels planned.

A member interjected.

David DAVIS: A backup. They have all got the backup dirty diesel, so that is an interesting point. But at the same time, the water issue I think has been overplayed. I think that is something that can be very well managed. The energy issue is a real issue and a challenge.

We see the thoughtful proposals that we have got on urban solar parks as an opportunity to co-locate these sorts of arrangements in commercial and industrial areas near to a source of generation and near to the grid – (Time expired)

 David ETTERSHANK (Western Metropolitan) (10:58): I rise to support this motion from Dr Mansfield, and I endorse her comments and will not repeat them. I have never really believed in vampires, but I have to say, having now been introduced to the data centre industry, I have changed my mind, because we are seeing across the west and north-western suburbs monsters being unleashed, ones that will consume vast amounts of electricity, ones that will consume vast amounts of water. We are seeing a veritable feeding frenzy of developers trying to get their snouts into the data centre trough. They are made up of both the global giants of artificial intelligence and increasingly a sort of rabble of vampire carpetbaggers who sense a potential river of gold. Most distressingly, this is being facilitated by the appropriately named development facilitation unit within the Department of Transport and Planning. This is a black box.

We know now, roughly, that there are around 50 data centres in place, but they are all very small compared to what is coming. I guess what is really disturbing is we know that there are somewhere around 20 to 30 other data centres – hyperscale centres – which will use exponentially more water, more power and more land than the 50 that are already on the ground. The thing that I think is really disturbing communities across the west and the north-west is the absolute lack of transparency. We are left to read the latest article or the latest press release. I know in terms of my backyard – wow – yesterday or earlier this week, we found out that HiQ are not only dipping their foot into waste-to-energy incinerators but have now abandoned their approach of powering Sunbury and are going to whack a data centre in there, even though the amount of electricity would only make up a fraction of what they need.

This is a disturbing time. We are seeing councils like Hobsons Bay saying they were provided with improper or inaccurate information from the government and then given 14 days to process a billion-dollar project. Last night we saw Hume council take a stand and call for a moratorium on these approvals to allow for consideration of what the feds are doing with regard to guidelines, to call for a Victorian parliamentary select committee and to set up a joint state and local government taskforce to consider an appropriate regulatory framework.

In the interim, let us just have some info, shall we? Just let us know what is going on. There is already an outstanding documents motion for the much-vaunted-but-never-seen sustainable data centre action plan. Ms Terpstra, who I am pleased to see has re-entered, has suggested that rather than worrying about that, we should focus on recycled bong water. I would also say that what is being sought by the Greens is a very basic thing: show us the calculations and show us the benefits, because they are entirely unapparent. We want this in the light. We do not want people treated like mushrooms – kept in the dark and fed you-know-what.

Motion agreed to.