Data CentresLindsay SaundersFri 25 Sep 26
Data Centre Boom Puts Planning, Neighbourhoods Under Pressure
Australia’s data-centre expansion is creating new planning challenges, with a Melbourne facility facing opposition from nearby residents as a proposed NSW campus draws scrutiny over the infrastructure needed to power it.
In West Footscray, NextDC wants to more than double its M3 data centre to 10ha, despite the facility already operating as close as 15m to neighbouring homes.
Residents have reported noise, dust, diesel smells and concerns about air pollution, while local agents say prospective buyers are avoiding properties near the facility.
The expansion would take the M3 site beyond its current 41ha footprint, with NextDC expecting to invest $1.5 billion in the facility.
A separate data centre has also been approved a few blocks away, adding to concerns about the concentration of large-scale technology infrastructure in the inner west.
The Victorian Government this week announced plans to prevent new data centres from being built within 150m of homes and schools, although the proposed rules would not apply retrospectively to existing facilities or projects already in the planning pipeline.
The West Footscray dispute comes as the scale of infrastructure required to support data centres is also creating challenges for planning authorities in NSW.
The NSW Department of Planning has admitted it failed to consult key government agencies before issuing assessment requirements for a proposed 675MW gas-fired power station at Moss Vale, 136km south-west of Sydney, which would supply a data centre campus.
The department acknowledged that public authorities should have been consulted before the requirements were issued.
An email from a senior planning official said the department had issued the requirements quickly and without consultation after the project proponent threatened legal action.
The proposed power station is being pursued by Nakar Property, the parent company of Cloud Carrier, for a data centre campus in the Southern Highlands.
The department said consultation would instead occur during preparation of the project's Environmental Impact Statement and again if a development application is lodged.
The Moss Vale proposal comes as NSW attempts to establish a planning and infrastructure framework for a rapidly expanding data-centre sector.
As of July, data centres were seeking network connections totalling up to 28GW of capacity in NSW, with projects seeking about 13GW in advanced discussions to connect.
The NSW Government has identified 20 data-centre projects worth $51.4 billion in the State Significant Development pipeline.
Its data-centre framework requires operators to address energy, water, environmental and community impacts, while proposed electricity reforms are designed to ensure additional network infrastructure costs are recovered from data-centre operators rather than other electricity customers.
