As more data centres are built and proposed across NSW, it is crucial to ensure development is subject to strong standards, clear planning rules and does not impact energy and water costs for the community. Data centres are major system loads with potentially system-wide impacts. We need to ensure their development serves the public interest without imposing unreasonable impacts on the community.
That’s why our response to the NSW Parliamentary Inquiry into data centres supports strong efficiency and flexibility standards, robust planning controls and clear regulatory expectations for data centres, with recommendations including:
- That data centres are allowed where they fit within the limits of the energy and water system;
- That data centre proposals are evaluated on their net system‑level value and include impacts on reliability, affordability, flexibility, sustainability/resilience and environmental outcomes in energy and water;
- That a framework for data centres ensures NSW energy and water consumers don’t carry the costs or risks associated with data centre development, and;
- That data centres are required to demonstrate credible decarbonisation pathways which are at least consistent with NSW emissions targets, and are supported by measures to encourage onsite renewables, storage and flexible demand operations.
What’s next?
The Inquiry Committee will review all submissions, hold hearings and prepare a final report, which the NSW Government will respond to. The report is due by September 30, 2026. The JEC will continue to engage with the Committee and stakeholders and engage with an Infrastructure NSW process considering the development of a framework for data centre development.
