The NSW Upper House Public Accountability and Works Committee has tabled its report on its inquiry into data centres.
The report makes 26 findings and 23 recommendations, after the NSW Labor and Liberal Parties teamed up to gut a number of key recommendations. However, the remaining recommendations, which received the support of the committee members, include a number of nation leading reforms. After finding the NSW Labor government's non-binding Guidelines to be inadequate, particularly in relation to the renewable energy requirements, the committee recommended the Guidelines be reviewed, that all data centre energy demand be legally mandated to supply their own 100 per cent renewable energy on an hourly basis at a minimum, that diesel generator use be reduced, and that significant improvements to reporting and accountability of resource consumption be introduced.
The report also made several important recommendations, including:
That the NSW Government consider amending legislation, and advocating to the Commonwealth where jurisdictionally appropriate, to attach legal and financial liability to AI models at all stages in their development and supply chain, all the way down to data centres hosting and training them.
That the NSW Government consider introducing regulatory requirements that make economic flows transparent, including where profits go, which entities benefit, and how much value remains in Australia versus multinational parent companies.
That the NSW Government look at developing mechanisms to intervene in the development of AI models and applications, by requiring data centre tenants and operators to support only theft free and ethical development of New South Wales' AI and research capability, including facilitating improved access to computing resources for research, innovation and public-benefit purposes.
That the NSW Government advocate on behalf of New South Wales creatives and copyright holders to the Commonwealth Government, urging them to strengthen, not weaken Australia's copyright laws.
As stated by Abigail Boyd MP, Greens NSW MLC and Chair of the Public Accountability and Works Committee which is inquiring into Data Centres in NSW:
"We are in the midst of an AI-fuelled data centre boom. The pipeline of planned projects is astonishing in scale, threatening to consume incomprehensibly large volumes of energy and water to feed their demands. There remains no binding requirements on this class of development to address these concerns.
"It is increasingly apparent that governments of all persuasions have been suckered in by an AI-fuelled get rich quick scheme.
"We need a moratorium on new AI data centre approvals. The evidence to this inquiry made very clear that the current rules are inadequate, that there is no social licence for this development, and that the impacts on energy prices, climate change, water use, and the opportunity cost of this development on misdirected resources and colonisation of strategic lands will be immense and difficult to unwind. Data centre development is exhibiting clear bubble-like characteristics.
"The delay at a Commonwealth level to introduce any rules, the non-binding nature of NSW's guidelines, and the undignified rush to approve as many data centres as possible as quickly as possible, makes clear the coordinated effort by governments and industry to avoid having to comply with even the most moderate of environmental and social obligations.
"Data centres are increasing greenhouse gas emissions right now as we speak. The NSW Guidelines, which are already non-binding, are inadequate for a whole host of reasons, but most importantly in relation to the renewable energy requirements. For every additional gigawatt of data centre demand, Australia will likely need around 3-4 gigawatts of new renewable generation capacity to support 24/7 operations. The guidelines as currently designed fall well short of that, meaning that around 20% of demand will not be met by renewable energy supply, and will instead be drawing from the existing grid and its coal and gas energy sources. We have therefore recommended the strongest renewable energy requirements in the country, requiring all data centre energy demand be legally mandated to supply their own 100 per cent renewable energy on an hourly basis at a minimum.
"This report makes a number of nation-leading recommendations that get to the heart of the flawed and dangerous business model of these companies and their backers. We recommend attaching legal and financial liability to AI models at all stages in their development and supply chain, all the way down to the data centres hosting and training them. We recommend regulatory requirements that make economic flows transparent, including where profits go, which entities benefit, and how much value remains in Australia versus multinational parent companies, and we recommend state led intervention in the development of AI models and applications, by requiring data centre tenants and operators to support only theft free and ethical development of New South Wales' AI and research capability, including facilitating improved access to computing resources for research, innovation and public-benefit purposes. And we recommend that the NSW Government advocate on behalf of New South Wales creatives and copyright holders to the Commonwealth Government, urging them to strengthen, not weaken Australia's copyright laws.
"Climate impacts of these projects must be paramount. But right now, the Labor government is choosing Big Tech and Fossil Fuel industries, not community health, safety and wellbeing, and locking us into a fossil fuel intensive, climate disastrous future.
"While big tech is promising us the moon, it could end up costing us the earth."
