The New South Wales Government has announced a new policy it says will incentivise data centre developers to comply with specific guidelines in order to fast-track their projects.
These NSW Data Centre Policy Framework guidelines include strict environmental and efficiency standards, additional supplies of water and energy, and investment in the communities in which their projects are located.
In return, the NSW Government says it will fast-track their development applications for assessment within 75 days.
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The NSW Data Centre Guidelines require specific performance measures to achieve six principles:
- Apply world-class environmental and efficiency standards
- Impose no net cost to consumers and communities
- Fund additional supply of water and energy
- Enhance local community infrastructure and amenity
- Invest in future industries across the supply chain
- Demonstrate a commitment to training and skills to support jobs.
The Guidelines will be reviewed annually to ensure they remain fit for purpose and reflect advances in technology and changes in the industry.
Under the second pillar of the framework, the NSW Government will make regulatory changes to ensure that data centres pay for the electricity network upgrades they require, so that extra costs aren’t shifted to households and small businesses, support more coordinated and efficient planning of the electricity network, and support implementation of the measures in the guidelines.
The NSW Government is also commissioning the Independent Pricing and Regulatory Tribunal (IPART) to undertake a review of the water pricing framework for data centres.
The review will consider how water pricing can reflect the full costs associated with servicing data centres, ensuring other water users on the network are protected and the impacts of drought and water scarcity are appropriately managed.
There are 19 data centre projects valued at $50.3 billion in the State Significant Development pipeline. This is in addition to more than 60 data centres that are already operating or under construction.
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NSW Minister for Climate Change, Energy and the Environment Penny Sharpe said, “As demand for data centres increases, NSW will ensure the infrastructure needed to support them grows with it.
“These reforms will make sure data centre growth drives investment in renewable energy, while holding operators to the highest air quality standards.”
