Australian regions implement new data centre planning rules

Australian authorities in New South Wales (NSW) and the Australian Capital Territory (ACT) are implementing new regulatory frameworks to manage the rapid growth of data centres and their impact on resources.

In NSW, a new water framework has been introduced to address the strategic water planning challenges posed by the data centre pipeline. As of July 2026, approximately $50.3 billion worth of projects are in the planning pipeline. The guidelines introduce Water Usage Effectiveness (WUE) targets, which measure water consumption relative to IT energy use, and require developers to engage with utilities during the site selection process. The framework also includes recycled-water requirements and mandates the installation of smart meters to protect existing customers and infrastructure.

Similarly, the ACT government is developing a data centre framework aimed at balancing economic growth with water security and residential protection. Chief Minister Andrew Barr described data centres as the ‘factories of the digital economy,’ noting their role in supporting AI, cybersecurity, and cloud services. The ACT strategy intends to establish clear rules for site locations and assessment standards, while exploring the co-location of centres with renewable energy and battery storage. Industry players, such as CDC Data Centres, have welcomed the move toward providing greater planning and sustainability certainty.