daily · energy-economics

Victoria will make new data centres bring their own renewables and batteries

New rules in the Australian state require data centres to match new demand with new generation, pay for grid upgrades and cool with recycled water.

By Greener Numbers Editorial Team · Published September 24, 2026 · Updated 9/24/2026

Victoria will require new data centres to supply their own renewable energy and battery storage instead of drawing on the existing grid. The state government released the rules on Sept. 22 as part of its Sustainable Data Centre Action Plan, Energy-Storage.news reported.

Under the policy, new data centres must match new electricity demand with new generation, pay their own connection costs and network upgrades, and use recycled or non-drinking water for cooling. Where recycled water can't be used right away, operators must offset the water they draw and pay for upgrades that cut reliance on drinking water over time. The government said data centres now use less than 1% of Victoria's drinking water supply for cooling.

New sites must also be at least 150 metres from homes. Data centres are banned in residential zones and kept away from schools, childcare centres and rural areas judged unable to support them.

"Data centres must bring their own supply to protect our energy costs, and they can't be built near homes," Planning Minister Sonya Kilkenny said.

The government said the sector brought AU$5.8 billion (about US$4 billion) in capital spending into Victoria last year. The rules won't apply to applications already under assessment. The state's policy builds on a federal framework announced by Prime Minister Anthony Albanese on July 15, which will require large data centres to become net generators of renewable energy, putting at least as much power into the grid as they draw, and to cut their draw when the grid is under strain.

Official source: Energy-Storage.news ↗