Interview with Ellen Fanning, ABC Radio Brisbane Drive

ELLEN FANNING: The Queensland Government is spending $1.8 billion to keep the lights on for you - that's the cost of the Electricity Maintenance Guarantee. It's a program to target the reliability of facilities like the Callide Power Station so we don't have a repeat of the past failures that meant widespread blackouts across the state. So, why then does the state government want to allow energy-hungry data centres to be built here at the risk of making the reliability and cost of power higher for you?

There's a big demand for data centres, driven largely by the surge in artificial intelligence, but each one uses as much power as 3,000 homes. Now, every other state energy minister in the country agrees data centre operators should build their own renewable power supplies to put back into the grid as much energy as they take out of it, but not Queensland. Chris Bowen is the Federal Energy Minister Minister, can we just start at the very, very beginning?

What is a data centre and why are you so worried about where they draw their power from? MINISTER FOR CLIMATE CHANGE AND ENERGY, CHRIS BOWEN: Yeah, gidday, Ellen. So, data centres come in many different shapes and sizes and we've already got some here in Australia that are holding data.

But really AI and the development of these chat boxes, which many of our listeners would have on their phones, which is, you know, ChatGPT and Claude and all the other ones, they're basically AI factories. So, when you put it on your phone, you ask AI a question and these days even if you don't have one of those, your search engine will probably take you one whether you want it to or any or not - so everyone's using AI.

And that's where the work gets which gets done in those data centres. And also, there's different types of data centres - there's large training, there's others that are just responding to people's needs. Now the main thing - to get to the nub of your question, Ellen - is that these are whales when it comes to energy use - they just eat electricity, it is very electricity intensive.

One ChatGPT search uses 10 times more electricity than a google search because it's doing it- they can be very useful and very good but they're doing it at your request so it's a whole different process to just how the internet currently works. It's happening around the world it's here, and our view as the Federal Government is that a lot of data centres will open in Australia - that's fine, providing it's in Australia's national interest.

We don't want to have open slather, just come here and do whatever you want, because there's all sorts of implications for energy for water and many other things. I quoted a statistic in the introduction from the Climate Council that said, one data centre could use as much power as 3,000 homes. How many data centres want to set up in Australia as more and more of us use AI - which I was just using before I ran in here to do the interview, right?

MINISTER BOWEN: Yeah. And look, there's many ways you could you could explain this. Another way of putting it is that some of the larger data centres - so one not in Queensland, but proposed actually in my electorate in Western Sydney - would have more electricity use than the Tomago Aluminium Smelter, which is currently New South Wales' biggest energy user.

So you think about, even from a Queensland context, Boyne Island, very big energy electricity users, and that's fine. But just one data centre can use more electricity than those big, massive aluminium smelters. Now we've got a pipeline of investment in Australia which some analysts, Westpac for example says, there's more than 150 billion.

And AEMO our Energy Market Operator says that currently data centres use about two per cent of our electricity. They're working on the basis that by 2030 they could use six per cent, and by 2050 it could be 10 per cent. Now, six per cent doesn't sound like much, but six per cent is the equivalent of every house in Victoria - that's the equivalent of how much energy they could use by 2030.

So, these are very big electricity users. And again, our point is that, okay, sure, but if you want to come and work in Australia you're going to have to comply with some rules so that you don't put energy bills up for everyone else. How would that happen?

MINISTER BOWEN: So, what we're looking at in the Albanese Government, what we've said is that, basically, we would require the data centres to provide their own new renewable energy so that they're not drawing on the same energy that everyone else is using. And- It's kind of a BYO policy - it's a BYO policy. MINISTER BOWEN: Right.

Yeah, absolutely. Yeah. Otherwise they'll just plug into the grid and be competing for the same power that you and I and all the Queensland listeners are using and, in effect, putting prices up.

And there's been some analysis done that has said that if it was open slather, do whatever you want, it could increase wholesale energy prices in Queensland by 14 per cent 2035. That doesn't sound like a good idea to us, so we don't want to let that happen. Just step me through slowly why letting a big data centre come to do the work that we all need done - because every time you Google it uses the little AI bot, and every time you use ChatGPT these processing centres heat up and go for it to get you the answer - why would that drive my electricity bill up?

Why is that a risk? MINISTER BOWEN: Well because, basically, it's supply and demand. If you've got so much more demand in the system for electricity and the same amount of supply or similar amount of supply, then everyone's competing for the same bit of electricity - that push prices up.

That's just a- it’s pretty simple, really. At the end of the day, unless you require them to bring their own new energy, and we say it should be the cheapest form of energy which is renewables we say to the data centres - and most data centres are happy to work with this by the way. I mean, this is not a big fight between our Government and data centres.

We say we welcome new investment, but here are the rules. You can't just put data centres up here willy-nilly. Data centres should be welcome in Australia, providing they comply with the rules and don't push energy prices up for everyone else.

There's a similar conversation around water, which is not my neck of the woods - that's Murray Watt's portfolio but he's got a similar process to me and it’s part of a coordinated program across government. Chris Bowen is the Federal Energy Minister. Okay, so why is it important, Minister, that it be renewable energy?

MINISTER BOWEN: Well, a couple of points, Ellen. Firstly, if you just say you've got to have an energy contract. Well, no one's building new coal-fired power stations.

Renewables are the cheapest and quickest form of energy to build. A gas-fired power station, the waiting list for a gas turbine around the world is about five years at the moment so that's just not realistic. Why do you actually have to specify?

Because this is where the friction's coming with Queensland. MINISTER BOWEN: Yeah. Well, Queensland from everything I've seen, the Queensland Government is saying, no, let the data centres do whatever they want.

And there's no way that you can let a data centre open up in Australia which wouldn't call on the existing energy system unless you require them to build their own renewables. That's just the fact of it. Plus, renewables are the cheapest form of energy.

Plus we are facing some issues around windfarms, for example. Solar’s going gang-busters, wind is having some issues. But if you say to the data centres, look, if you offer, guarantee to buy your energy off this wind farm, that can fulfil their obligations.

That can mean that we can do all of the above. We can build the new energy we need. We can get the data centre investment and consumers won't be penalised through increased bills.

And if you need extra power, have arrangements that are put in place, that's fine. You can have gas as a backup? MINISTER BOWEN: That's right.

That’s right. It's a very pragmatic approach to say if you have a firming contract that would be gas, that's okay, but your main source of electricity that you rely on on a day-to-day basis should be renewables. Let's turn to the Queensland Premier's argument.

He says, quote, only one state believes that the energy source for data centres should come from wherever it is best placed, not exclusively from one source of energy. What's the risk, do you say, with taking that position? Because you've described that as a race to the bottom.

MINISTER BOWEN: Well, the Premier is right in this regard. He is the one out. He's the only Premier saying that.

Every other state agrees with us. Northern Territory and Queensland don't. The Queensland approach would see energy bills go up.

Now I think with the greatest respect, that's up to the Premier and the Minister in Queensland to justify and explain why their policy which would see Queensland energy prices pushed up, why they think that's a good idea or- and or explain where this new energy, this would come from under their method, under their plan. Because as I said, data centres are coming in thick and fast.

This is not a discussion about what should happen in 2040 or 2050. These applications are coming in today. Now, if Mr Crisafulli and Mr Janetzki think they can get some sort coal-fired power station built in 2026, I'd like to see it.

It's not going to happen. So their plan would put more pressure on the existing grid, see prices go up. It's a fundamental difference of approach.

It's a disagreement between us and them. I mean, I'm not going to beat about the bush and pretend we all agree. We don't.

We have a different policy, and what we've said is we need a national policy. Otherwise, you'd have states in this race to the bottom to attract these data centres at all costs. We're not going to let that happen.

And when you say race to the bottom, so therefore it would be more attractive for one of the big AI engines. They'd say, well, we'll just go to Queensland because we don't have to build, we don't have to BYO energy. We don’t have to build- pay somebody to build renewable energy to fund our data centres.

We'll just crowd them all into Queensland. MINISTER BOWEN: [Talks over] I there’s a risk. The risk is that some other developers might come in and say, well, we're just going to go into Queensland, we're going to plug into the existing grid and there are no rules in Queensland so bugger it, we'll just go there.

So we don't want that to happen. That's not in the best interest of Queenslanders or Australians. And not interested in the best interests of Queenslanders because in that scenario, which as you say is hypothetical, that could potentially have a huge impact on electricity prices in Queensland if they're dragging out all the energy and competing with households and industries already here.

MINISTER BOWEN: [Talks over] Yes. Yes. Exactly.

Exactly the point, Ellen. You've put it very well. That's exactly the point that if you're competing with the existing industries and existing households for energy, you're just going to push the price of energy up.

And there's a risk if we let Queensland go one out and some other data centre operators who didn't like our rules said, well, we're just going to operate in Queensland. Well, I've got to tell you, I'm going to be very straight with you, it would be Queenslanders who pay the price for that through increased bills. You say a coal-fired power station can't be built next year.

But you're confident that a big AI company could get renewable energy sorted out pretty quickly in order to build a data centre? MINISTER BOWEN: Yes, the fastest form of energy to build, it makes sense, right? So now we'll have sensible transition arrangements so they can put their plans in place.

Guarantees have to be made and contracts have to be entered into. That's pretty sensible. But we've been around this road 100 times.

The previous federal government said they might build a coal-fired power station in Collinsville. They spent millions on it. Of course, it never happened.

It was a complete waste of money and time. It was never going to be realistic and feasible. We don't want to sort of have that conversation again.

Renewable energy can be built quickly for obvious reasons. You can build a solar farm, a wind farm much quicker than you can build a gas-fired power station or a coal terminal or indeed a nuclear power station, which takes 20 years to build. You're obviously not going to speculate about why the Queenslanders have taken this position, the Queensland Government, but answer this.

Are there jobs in data centres? Are there state taxes, lucrative state taxes, in hosting these things? MINISTER BOWEN: There's some jobs that I want to- there's some jobs that are created, particularly around construction.

There would be stamp duty. I think it's more an ideological difference, frankly. I think the Queensland Government's taken an approach that it's let data centres in at all costs, let her rip.

We have a different ideological view. Ours is let's have data centres if they're in our national interest and only if they’re in our national interest and in the interest of Queenslanders. I ask that because Anthropic, they're the folks behind the AI engine Claude, met with the Queensland Premier, and it was after that meeting with the AI company representatives from Anthropic that the Premier came out and said that he was going to break from the rest of the Commonwealth and not require data centres to provide their own renewable energy.

So I'm just wondering potentially what might have been said in that meeting that made him so enthusiastic to have data centres here, as you say, at all- at any cost? MINISTER BOWEN: Well, I was in that meeting, obviously. I'd be surprised if Anthropic said anything other than- to them that they didn't say to others, which is that they're happy to use renewables.

So, again, I don't want to single out particular data centre operators because most who are coming into Australia, most are saying, yep, why wouldn't we want to use renewables? It's fine with us. We'll comply with the rules.

The data- that’s what the data centre peak groups says. There's some complexities I want to work through with us, of course. Of course, that's very sensible and fine, but in terms of the principle of what we're trying to do, most data centres investors are fine with it.

How do you pull Queensland into line? Will you legislate to make the rules uniform Australia-wide BYO renewable energy if you want to set up a data centre anywhere on the continent? MINISTER BOWEN: Yeah, in effect, that's right.

I mean, I always prefer to work with states, including conservative states. I've worked very well with different conservative governments. But we're not going to let one state dictate to the rest of the country.

With all due respect to Queensland, if they want to do it their way, that's not what every other state in the Commonwealth wants to do. That's not what the Commonwealth Government wants to do. They're one out here.

They're quite isolated. And, okay, that's their right, but they don't get to determine the policy for the country. And is there a sense in Canberra that you think you're saving Queensland and Queenslanders from themselves?

MINISTER BOWEN: Yeah, yeah. Well, if we don't do this, Queenslanders will be paying more in energy bills and we don't think that's a good idea. Crisafulli Government has a different approach.

Chris Bowen, thanks for taking the time. MINISTER BOWEN: Great, Ellen. Good on you.

Nice chat. Chris Bowen is the Federal Energy Minister. We acknowledge the Traditional Owners of country throughout Australia and recognise their continuing connection to land, waters and culture.

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