New South Wales Mandates Data Centres Fund Energy and Water

The Government of New South Wales announced a new regulatory framework requiring data centre builders to fund public water and energy reserves. The policy applies to projects seeking State Significant Development assessment, mandating that operators offset their own power and water demand within four years of operation to prevent utility costs from falling on households.

To protect water supplies during droughts, the plan requires the use of recycled water. Energy Minister Penny Sharpe noted that data centres could consume 11 per cent of the state's energy by 2030, necessitating high renewable energy standards. Treasurer Daniel Mookhey described the policy as nation-leading, stating that builders must deliver a community benefit.

The framework arrives as the state manages a pipeline of 19 projects valued at approximately $50 billion. Liberal MP James Griffin argued the regulations were far too long overdue, noting that more than 60 data centres are already operating or under construction.

The Climate Council supported the move, with senior advisor Ben McLeod urging other Australian states and territories to adopt similar rules. McLeod argued that data centres must be powered by new wind, solar, and storage to mitigate climate pollution and rising power bills.