New South Wales launches data centre policy framework

The New South Wales Government has introduced the NSW Data Centre Policy Framework, a new set of guidelines designed to fast-track data centre development applications within 75 days. To qualify for this expedited assessment, developers must adhere to strict environmental and efficiency standards, fund additional water and energy supplies, and invest in local community infrastructure and workforce training.

The framework includes regulatory changes to ensure data centre operators pay for necessary electricity network upgrades, preventing costs from being passed to households and small businesses. Additionally, the Independent Pricing and Regulatory Tribunal (IPART) has been commissioned to review water pricing frameworks to ensure costs reflect the full impact of servicing these facilities and to protect other water users during periods of scarcity.

In a related development, the Water Services Association of Australia (WSAA) is calling for a mandatory national water framework. The WSAA argues that consistent regulation is necessary to manage the rising water demand driven by AI growth and the expansion of data centres, which use millions of litres of water daily for cooling. Australia is expected to approve approximately 90 new data centre developments this year.