The withdrawl on Monday of Goodman’s big data centre in Sydney’s Lane Cove could be the start of a backlash that mimics the antipathy towards these developments that has have emerged in the US.
The $1.2 billion project was controversially slated to be sited just 16 metres away from low-density residences.
Both local residents and policy makers strongly objected.
The developers were last week questioned about their proposal at the federal Senate inquiry into data centres and artificial intelligence with Liberal senator Sarah Henderson saying the proposal was “wholly unreasonable, and frankly a grossly irresponsible proposal which shows contempt for local residents.”
She asked Goodman’s general manager of developments Ben McGilp to withdraw the proposal.
The company’s head of planning, Guy Smith, wrote to the NSW government, that “emerging federal and state policy” were among the reasons for abandoning the development.
“During this time, the policy and regulatory environment for large-scale data centre development has evolved significantly,” Smith said.
Sydney Water and Ausgrid also cited concern about the strain on existing infrastructure and risks of electrocution or fire.
At capacity, the developers anticipated the project would have used 35 litres of water per second during peak times, and about 1.4 million litres a day. Sydney Water said it would be “unable to support the progression” of the data centre without more detailed planning assessments of water demand and wastewater impacts – but estimated the project would have placed the drinking water system under immense pressure.
The facility would have also stored 1 million litres of diesel on site and 198,000 kilograms of lithium batteries.
All in on data centres
The Goodman Group has been among the first to jump into the data centre sector with close to 80 per cent of its near $20 billion of work in progress devoted to the infrastructure, The AFR wrote on Tuesday.
Several other data centre proposals have been withdrawn around the nation. Among them a $600 million project at Hazelmere in Perth, a $4.8 million project at Katoomba west of Sydney and others such as AirTrunk’s Kemps Creek, Sydney project have been scaled back, the report said.
Even Goodman’s own shareholders are not happy and have called for the board to disclose “how Goodman assesses risks to the environment and social licence from its booming data centre business.”
The problem for residents close to data centres is constant noise but others in Melbourne also report worsening air quality as the facilities are obliged to test their back up systems on a regular basis by switching on diesel or gas fired generators.
In NSW Goodman’s decision came after the state government introduced a fast track program for the sector
A ministerial statement signed by seven NSW ministers claimed that investment into data centres has been increasing at around 75 per cent per year on average, over three years to December 2025. The ministers claim this growth combined with the energy system “is a key reason we have avoided recession”.
Meanwhile in Victoria, Premier Ben Carroll last week watered down former premier Jacinta Allan’s “ruthless” plan to attract data centre investment with stronger guardrails after intense community backlash. This includes requiring developers to supply their own renewable energy, use non-drinking or recycled water, and require a 150-metre buffer between data centre buildings and homes.
The federal government has will accept consultation on the new national data centre and AI standards until 9 October.
On Tuesday, the Climate Council launched a campaign to demand the government require data centres to meet their own energy needs by supplying their own renewable energy – which must be online within three years of operations. It also demanded that the government require data centres to avoid drawing from water supplies and apply the new rules to all 225 data centres already in the pipeline.
In the US about 45 data centre projects worth $68 billion were blocked or delayed by local pushback between April and June this year.
And NPR said that that the data center backlash is “reshaping American politics…cutting across political parties, splitting constituencies and forging unexpected alliances.”
