While the government’s new regulatory framework is a step in the right direction, critics argue that it may not go far enough to address the immediate environmental and social risks posed by the data centre boom. Environmental groups and some political voices have called for an immediate moratorium on new large-scale data centre approvals until these regulations are fully legislated and operational. The concern is that without a pause, the current 'free-for-all' in development could lead to irreversible damage to the energy transition and local water resources.
Data centres are notoriously resource-intensive, with some facilities requiring millions of litres of water daily for cooling. In a country as dry as Australia, this level of consumption is a significant point of contention. Furthermore, there is skepticism about whether data centre operators can truly deliver 'additional' renewable energy that would not have been built otherwise. If these companies simply purchase existing renewable credits, they may not be contributing to the new generation capacity required to meet the nation's climate targets, effectively slowing down the broader transition.
There is also the risk that developers might bypass grid constraints by relying on fossil-fuel-based backup power, such as gas or diesel generators, to maintain their operations. This would contradict the government's goal of reducing emissions and could lead to localized pollution. For many communities, the uncertainty surrounding these developments remains high, and there is a fear that the government’s 2027 legislative timeline is too slow to prevent the negative impacts of the current development pipeline.