Anthony Albanese left the door open at a meeting of the nation's leaders on Wednesday to a more "flexible" approach as Queensland and the Northern Territory refused to agree to standards requiring them to use renewables for new data centre developments.
He announced the agreement on the AI laws alongside domestic violence measures and firearm reforms following a meeting of national cabinet in Sydney.
"We want to make sure that in attracting investment, we don't have eight different systems operating around the country," he said on Wednesday.
"That's why we came to a common position, which recognises that all states aren't exactly the same, and that was accommodated in the way that we normally do in a flexible way."
South Australia Premier Peter Malinauskas said the nation's leaders agreed renewables would "principally be the form of energy that will pay our data centres in the future in Australia".
"Acknowledging that there are different circumstances through the fact that in Queensland, for instance, they have state-owned generation," he told ABC's 7.30 on Wednesday.
"So there's no need for the federal government to use its powers that it has to override what states want."
Gregor Verbic, an energy expert at Sydney University, said the national grid was facing the imminent closure of multiple coal-fired power stations.
"(It) will leave a huge gap in the generation capacity, and we are not building new capacity fast enough," he told AAP.
The federal government has proposed legislation to force data centre developers to provide their own renewable energy source.
Both Queensland and NT governments provided considerable pushback, with the final national agreement failing to mention renewable energy directly.
Professor Verbic said ensuring the energy brought online is renewable is essential to meet Australia's emissions reduction targets.
"Gas is quite expensive, so I would argue that renewables firmed by utility-scale storage, possibly some gas, is a cheaper solution," he said.
"Gas can be kept as an option for firming ... but as a base load or continuous source of supply, gas is not the right option."
Mr Albanese flagged draft legislation will be introduced by the end of 2026, with the aim for it to be passed in early 2027.
