Energy Ministers have welcomed advice that would make data centres buy new renewable generation and firmed capacity. The threshold, the staging and the legislative vehicle are all still open.
Energy Ministers asked the Australian Energy Market Commission (‘AEMC’) in May 2026 for advice on requiring data centres to offset their demand through new renewable generation, firming and demand flexibility.1 The AEMC reported in July. The Energy and Climate Change Ministerial Council (‘ECMC’) welcomed the advice on 28 July, and the recommendations were published on 5 August.2
Four policies sit at the centre of the advice. Data centres would: (i) surrender Renewable Electricity Guarantee of Origin (‘REGO’) certificates from new renewable generators to offset the energy they consume; (ii) demonstrate that their load is covered by firmed capacity, through financial contracts or their own investment in storage and demand flexibility; (iii) register as market participants, where the facility is large enough; and (iv) accept connection terms that encourage demand shifting and co-location with generation.3
A demand-side procurement mandate
The first two recommendations amount to a procurement obligation on the demand side.
The certificate limb is drafted around new generators, with the stated objective that data centres invest in new, additional renewable generation in their state of operation.4 Certificates created from existing plant would leave the obligation undischarged. The firming limb works the same way for dispatchable capacity, since a contracting obligation is met by someone selling firmed volume.
Data centre load is the fastest-moving variable in the demand forecast, and to date it has arrived as connection-queue congestion. The advice would convert part of that growth into contracted revenue.
What remains open
The direction carries ministerial endorsement. The mechanism is still in development.
The AEMC describes its recommendations as preliminary and says further work is required to refine them.5 Each policy would go through consultation that could change it. Obligations would apply above a threshold size and arrive in stages, though the AEMC has fixed neither the threshold nor the staging.6
Implementation sits with Commonwealth, state and territory governments, through legislation, new electricity rules or both. The AEMC will consult separately on the rule changes within its own remit.7
The advice covers the National Electricity Market. Western Australia and the Northern Territory will each consider whether it suits their systems.8
What this means
For generators and developers. A new class of long-term counterparty is being pointed towards new build. Early commercial conversations cost little and inform pricing, though contracts written against an unfixed threshold carry more risk than the endorsement alone justifies.
For data centre operators. Four workstreams are now visible: certificate procurement, firming contracts, market registration and connection terms. Scoping them during consultation costs less than retrofitting them after a rule commences.
For both. The threshold is the variable to track, since it determines which facilities carry the obligation and remains the clearest signal of how far the policy will reach.