Data centre industry butts up against community challenges

The data centre industry in Australia is facing challenges due to community hesitancy and policy uncertainty. This situation has been exacerbated by calls from minor parties for South Australia (SA) to halt approvals for new data centres. The state government is currently preparing legislation to regulate the industry. However, the peak body representing data centres in Australia, Data Centres Australia, has noted that they are still struggling to engage with communities effectively following several AI companies pulling out or pausing their plans to build data centres across the country.

Quantum DC, an AI data centre developer in South Australia, announced it would pause plans to build a 1200-megawatt facility in Tungkillo, following deep frustration and protests from the surrounding community. Similarly, another AI data centre proposed for Sydney's south on the Cooks River was scrapped over the weekend due to community opposition.

Data Centres Australia CEO Belinda Dennett explained that the challenge lies in choosing the right time for community engagement, as there is a trade-off between providing early engagement and having detailed answers. She emphasized the potential and interest in building data centres in South Australia, but operators and investors are seeking policy certainty. Dennett noted that the lack of federal rules adds to the challenge, stressing that having certainty would make Australia's data centre industry more viable.

Political parties have welcomed the pause on the Tungkillo development, with the Greens calling for a data centre moratorium and the South Australian Minister for Artificial Intelligence, Chris Picton, advocating for proper regulatory control through legislation. Opposition leader Ashton Hurn criticized the location of the Tungkillo data centre on prime agricultural land but highlighted the need to educate the community about the purpose of data centres.

Picton contested the inclusion of data centres in the state's Royal Commission into Artificial Intelligence, stating that they are separate infrastructure issues, primarily concerning energy use, water use, and land use. Despite this, a parliamentary inquiry into data centres has been established, with opposition parties supporting the move, although not Labor.