17/06/26

April Glover

Australia has become fertile land for the construction of hundreds of data centre campuses, with more than 160 facilities already dotted around every state and territory.

Nearly 100 more hubs are either planned or in development to keep pace with the global artificial intelligence (AI) infrastructure boom – the vast majority concentrated in Sydney and Melbourne.

Most of the mega-hubs are clustered in the west, on the outskirts of metropolitan areas, while inner-city residents have mostly avoided being swamped by the buzzing, resource-guzzling AI nerve centres.

Data centres are the backbone of digital systems, including AI and other internet companies and networks, and typically run all hours of the day to store a company’s data.

Companies such as Amazon, Microsoft, Google, Meta and Apple are behind many of them.

According to data centre tracker RenewMap, there are a total of 30 data centres in the pipeline in Victoria.

Among the largest proposed centres is a 350-hectare sized project in Plumpton, located about 30 kilometres north-west of Melbourne’s CBD.

The proposed hub developed by Syncline Energy is expected to have a 2.4-gigawatt capacity, which is enough to power 1.5 million to 2.5 million homes.

Laverton North, in Melbourne’s south-west, will soon be home to a 150-megawatt data campus too, operated by data centre giant CDC.

Australian builder Stockland has also flagged plans to redevelop a logistics warehouse into a 250-megawatt data centre in the same suburb, while a development plan has been approved by NEXTDC to build a $2 billion data centre campus at a former newspaper press site in Port Melbourne.

The data centre boom has its sights on Footscray in Melbourne’s inner-west, with plans to expand the current NEXTDC M3 Data Centre in West Footscray to four times its size.

Amazon Web Services, meanwhile, has acquired a 13.4-hectare site in Cobblebank with plans to build a $50 million data centre.

Melbourne is on track to beat Sydney in the data centre gold rush, however the NSW capital is forging ahead with 15 of its own confirmed data centre projects.

Most of these campuses will be concentrated in or near western Sydney.

A 504-megawatt CDC data centre is on track to open in Marsden Park, set to be the biggest data centre campus in the Southern Hemisphere.

The NSW government gave this $3.1 billion campus the green light in November. 

An 82,020-square-metre facility in Erskine Park is awaiting approval.

Other major projects are earmarked for Fairfield, Penrith, Bella Vista, Kemps Creek, Blacktown, Ryde and Lane Cove.

An existing DigiCo campus in Ultimo in the Sydney CBD has been approved for expansion, too.

Queensland is also attracting growing interest.

Five data centre projects are either in development or under construction in Brisbane.

The rapid data centre growth in Australia is unprecedented but industry titans have warned it could be short-lived.

Only one country can become the next Silicon Valley-style hub for intelligence storage, and it could be Australia – if the government plays its cards right.

Australia’s infrastructure pales in comparison to the US, which has over 4300 hubs around the country.

But the potential for growth is geographically unparalleled.

Data Centres Australia’s chief executive Belinda Dennett said Australia’s golden opportunity is knocking now and the state and federal governments appear to be answering that call through fast-tracked approvals.

“A lot of countries are really competing hard to attract that investment, and we think in the next two to three years that decision will be made,” Dennett told nine.com.au.

“We say it’s a small window for Australia to capture this.

“If it misses that opportunity and we don’t become that market, then I think you’ll see that drop off.”

Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton predicted the AI boom could have a “more profound impact” on Australia’s economy than the resources boom.

“The real question – which I will return to many times – is simpler: do we shape the boom before it arrives – or do we react after it’s here?” Charlton said during a speech to the Sydney Institute.

“Amid this global competition, Australia has quietly become one of the most attractive destinations in the world, ranked second globally in 2024, behind only the US.”

Dennett said the proposed data centre density in Sydney’s west and Melbourne’s outer suburbs simply comes down to land availability and grid power.

Under current projections, data centre energy use could triple by 2030.

It is estimated data centres will gulp up to 17 gigalitres of water over the next five years, with some individual data centres applying to use up to 40 million litres daily.

It could also cause power prices surge by up to 26 per cent in NSW and 23 per cent in Victoria by 2035, according to a new Climate Council report.

That’s equivalent to about 16 Olympic swimming pools.

Australians around the country have opposed data centre development in suburban areas in response to the staggering energy use.

While unwelcome to some residents, Dennett expects more expansion and fresh construction will continue outside inner-city areas.

She said Australia has some of the strongest planning and approval processes that help protect communities from harm.

“Data centres always cluster around where there is energy infrastructure; transmission lines, substations, and availability of land, and so things tend to be in the western suburbs,” Dennett added.

“We understand that people may not want to live next to a data centre where residential area butts up close to industrial areas, and we need to do a better job of working with those hyper-local communities, making sure there are benefits to the community.

“The industry is very conscious of that, and I think you’ll start to see us be more responsive on some of those things.”