Submission to Inquiry into data centres in NSW

In a world of artificial intelligence and big data, data centres are becoming an increasingly important element of protecting Australia’s national security and sovereignty, enabling data to be stored and accessed onshore.

New South Wales’ comparative advantages can be leveraged by businesses looking to build data centres, allowing the state to build new digital economies and support resilience of the numerous industries that rely on data centres. Like all major infrastructure though, if not properly managed, data centres can have significant negative impacts on local communities.

Current data centres are power hungry, thirsty and noisy, meaning coordinated planning is required to manage impacts on utilities and communities. Establishing guidelines at the outset of this new industry will help to ensure data centres maintain a widespread social licence and support a long-term sustainable sector that benefits the state.

The Federal Government recently released its expectations of data centres and AI infrastructure developers. These expectations align with ATSE recommendations to support a growing NSW data centre industry that boosts the NSW economy while maintaining social licence.

ATSE recommendations

Recommendation 1: Develop a statewide Data Centres Strategy to support the state to seize economic opportunities in, and make planning decisions about, data centres.

Recommendation 2: Ensure planning approvals consider the power usage efficiency (PUE) of data centres and encourage deployment of energy efficient technologies, designs and practices.

Recommendation 3: Establish a Data Centres Research and Innovation Partnership program connecting hyperscale operators with Australian universities and research institutions to co-invest in emerging efficiency technologies with a focus on commercialising Australian innovations and attracting further sovereign capability investment.

Recommendation 4: Require new data centres to support the deployment of new renewable energy generation and storage through direct investment or power purchase agreements for future projects to mitigate increased energy demand on the grid.

Recommendation 5: Minimise data centres’ impacts on water supplies by embedding water efficiency and recycling guidelines at the planning stage.

Recommendation 6: Require that data centres are located away from residential areas wherever possible and have appropriate noise and pollution reduction technologies where co-location with residential areas is unavoidable.

Recommendation 7: Include plans to boost the construction and operational workforces of data centres in NSW within a statewide Data Centres Strategy.