NSW government reveals ‘nation-leading’ data centre pathway

Data centres in NSW will be fast tracked if developers agree to fund additional water and energy supply under “nation-leading” reforms announced by the state government.

Revealed on Monday, the NSW Data Centre Policy Framework will provide a streamlined assessment pathway for data centre projects that meet six principles, including “world-class environmental and efficiency standards”.

It will also be required that the data centres do not impose a “net cost” to consumers or communities, fund additional water and energy supply, “enhance local community infrastructure and amenity”, invest in the supply chain, and commit to training and jobs.

About 65 per cent of Australia’s data centre infrastructure and development pipeline is in NSW, with the state government crediting investment in the sector with helping to stave off recession amid fallout from the war in the Middle East.

However, projects in NSW have faced pushback over noise and environmental complaints, including in Katoomba in the Blue Mountains, North Sydney, and Moss Vale.

NSW Environment Minister Penny Sharpe said the new measures “got the balance right” and ensured a “pretty clear, very high environmental standard”.

“In NSW, this is consistent with where the federal government is at,” she told News24.

“This is about renewable energy. We’re currently moving our energy system away from coal-fired power stations that are going to be retiring in the next 15 years.”

Ms Sharpe acknowledged data centres were “very energy intensive, but we believe our system can work”.

She said the government would look at how data centres could use recycled water, and those centres would be required to have drought plans.

NSW Treasurer Daniel Mookhey said data centres would use “more and more recycled water” and would help the government “pipe more renewable energy”.

“They need to bring additional power and additional water to offset the demand but also to pick up some of the slack that’s otherwise would fall to households.”

The NSW parliament probed the impact of data centres in NSW earlier this year, with hearings until July.

There are 19 data centres in the state valued at $50.3bn in addition to the more than 60 already under construction.