Shift comes after Chris Bowen said Labor would use constitutional powers to override states resisting rules on sustainable energy
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Anthony Albanese has backed down on demands that states must power new AI datacentres entirely using renewable energy, with Wednesday’s meeting of national cabinet flagging carveouts for jurisdictions including Queensland and the Northern Territory.
The prime minister welcomed the “positive and constructive” discussions in Sydney, but opened the door to a flexible approach under new nationally consistent standards to deal with AI development, including for governments with state-owned power systems.
Queensland and the NT had resisted signing on to rules requiring them not to use coal and gas to fuel new developments, set to be included in new federal legislation in early 2027.
Albanese’s shift comes weeks after the energy minister, Chris Bowen, said the federal government would override states resisting the renewables rules, using tough powers in the Australian constitution.
The NT’s chief minister, Lia Finocchiaro, said she had won approval to use gas from the massive Beetaloo basin project in the meeting.
“Today’s deal recognises the Beetaloo basin will be online within days, we are not part of the national electricity market and we have a Territory-owned generation, transmission and distribution system,” she said.
“Our focus remains on affordability and reliability of electricity for Territorians above all else.”
The Queensland premier, David Crisafulli, said it was appropriate his state be allowed to use energy from publicly owned networks.
“In the state of Queensland, we’ve got a really big point of difference, and that is that we own distribution, transmission, generation, and that enables us to control that energy mix, and we’ve done that well,” he said.
Wednesday’s meeting did not fully resolve the dispute but Albanese said all the country’s leaders agreed that eight different systems operating around the country would not be workable for investors.
“I certainly understand that different states have different issues, but we know that the priority is keeping our energy costs low,” Albanese said.
He flagged carveouts for jurisdictions with public ownership, where there is a “surplus” of power supply from fossil fuels.
“The commonwealth will legislate, and we have the power under the corporation’s power to do so,” Albanese said. “I’m very confident that we’ll move forward with every single jurisdiction making a difference.”
