Are data centres ready for the new rules? Q&A with Digital Twin and AI leader Jeff Sharp

From early 2027, data centres will be forced to underwrite new power supply and to "put at least as much energy into our grid as they take out of it", under new rules announced by Prime Minister Anthony Albanese in July.

We spoke to Jeff Sharp, APAC Principal Industry Consultant at critical infrastructure intelligence firm Octave, to find out more about what this will look like for owners and operators.

What would the proposed requirement for large data centres to operate as “net generators” mean in practice for owners and operators?

If requirements around energy sourcing become more stringent and data centre projects are mandated to operate as net generators, this will accelerate a broader shift already underway across the sector: energy is becoming a core operational consideration, rather than simply a utility input or a sustainability metric.

For owners and operators, the implication is that decisions about capacity, infrastructure investment, energy sourcing, and reporting become increasingly interconnected. Energy can no longer be treated as a separate compliance function. It has to be considered alongside operational performance, long-term planning, and risk management.

The most significant change is not simply that operators need to report more information, it’s that energy availability, sourcing, and performance are likely to play a much larger role in how facilities are planned, governed, and operated. An annual power purchase agreement that balances on a yearly view may not satisfy a time-sensitive assessment across peak and off-peak periods. Energy stops being just a procurement line item and becomes a continuous operational position.

The changes will also shift who holds the risk. Network costs [connection costs, augmentation costs, system strength, transmission upgrades] that have historically been recovered broadly across the customer base would fall to the connecting party, and reliability risk also moves in the same direction.

The organisations that adapt most successfully will be those that can understand the full relationship between energy, infrastructure and operational performance. We can already see data centre operators across Australia are shifting their perspectives on energy to align with the proposed rules and enable future expansion.

How prepared are data centres currently in Australia’s development pipeline to measure and report their energy use, generation, water consumption and emissions in real time?

Readiness varies across the sector. Most operators understand that expectations around transparency and reporting are increasing. But the challenge is often not the absence of data, it’s ensuring that data is trusted, consistent, and sufficiently connected to support the more stringent reporting requirements.

Many organisations have historically managed energy performance, asset information, and operational data through different teams and processes. That works when reporting is periodic and largely voluntary. But as obligations become more comprehensive and frequent, those shortfalls become visible, and operators will become liable.

An example of those shortfalls can be seen in Uptime Institute's 2026 Global Data Center Survey, which found that 53% of operators now track water usage, up from 47% in 2025, but only 21% of operators track Scope 3 emissions. The industry has made headway on some metrics, but still lags in others.

This is why the conversation is increasingly shifting from collecting data to creating confidence in the data that already exists. For projects still in development, that capability is far easier to ‘design in’ now than to retrofit later. We’re already seeing data centre operators in the market react as they look to update their systems so they can trust the metrics they’re reporting.

What changes would operators need to make to their systems and project designs to comply with the proposed framework from 2027?

The most important shift is likely to be incorporating energy and sustainability considerations much earlier in the lifecycle.

Historically, reporting has been something organisations incorporate after assets are already operating. Increasing transparency expectations mean operators need to think much earlier about how this information will be captured, governed, and reported across the life of a facility.

That creates greater emphasis on consistency, accountability, and traceability. Organisations need confidence that the information they report accurately reflects what is actually happening across their infrastructure and operations — which is difficult when the underlying data is assembled from systems that were never designed to talk to each other.

More broadly, the operators who handle this well are likely to view reporting as part of a wider effort to improve visibility, planning, and decision-making across increasingly complex environments, rather than as a discrete compliance task bolted on at the end.

The opportunity is to move beyond viewing reporting as a compliance obligation and treat it as part of a broader effort to improve operational visibility. The organisations that build transparency into how facilities are planned and governed will be better positioned to adapt as expectations continue to evolve.

AEMO has raised concerns about "phantom demand" from projects that may not proceed. How can better project data help networks distinguish credible developments from speculative connection applications?

Greater transparency benefits the entire ecosystem. As competition for energy resources intensifies, the networks, regulators, and communities are all looking for greater confidence that proposed developments reflect genuine demand and realistic delivery.

AEMO's 2026 Electricity Statement of Opportunities shows why this matters. Network service providers reported 225 data centre projects in the connection process in 2026, with proposed connection capacity rising from 38 GW to 67 GW in a single year. But, over 40% of projects since 2025 have either dropped out or regressed in connection status — and of those cancelled, over 30% had previously been classified as committed, meaning a connection agreement was already in place. AEMO now applies probability weightings to the project pipeline to account for this. When a formal commitment milestone isn't a reliable indicator of delivery, networks are planning against a pipeline they can't fully trust.

Better visibility into project progress, milestones, and planning assumptions can help create a more informed picture of project maturity and readiness. A developer able to demonstrate a committed construction programme and a defined delivery pathway is presenting evidence of a real project in a way that a speculative application generally cannot.

That supports better decision-making and reduces the likelihood of infrastructure planning being influenced by incomplete information. The broader principle is that improved transparency enables more confident decisions across the energy and infrastructure system.

Can more transparent energy and water data help data centres build community trust — and demonstrate that their growth will not leave households paying more for electricity or grid infrastructure?

Yes, transparency is increasingly central to the relationship between digital infrastructure providers and the communities in which they operate.

Data centres are becoming essential infrastructure, but they are also becoming significantly larger consumers of energy and other resources. Communities want confidence that growth is being managed responsibly and sustainably, and the questions they are asking are specific: will this raise my power bill, will it draw from the local water sources, and who pays for the network upgrades it requires.

Providing greater visibility into energy sourcing, efficiency, and resource consumption helps create a more evidence-based conversation between operators, regulators, and the public. It moves the discussion from assurance to evidence.

Ultimately, trust is built when organisations can demonstrate outcomes rather than simply make claims. An operator that can show what it drew from the grid, what it contributed, and what it consumed in water is in a fundamentally different position to one asking a community to accept its claims on goodwill that it hasn’t built yet.