ABC News (AU)
· collected 2026-09-21 · by Richard Willingham and Leanne Wong
In short:
Victoria will require new data centres to source their own renewable energy under a strategy unveiled by Premier Ben Carroll on Tuesday.
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Victoria → require → Tuesday
A 150-metre buffer between any new data centres and homes will also be mandated to quell community concerns over the burgeoning industry.
What's next?
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What → mandate → industry
Victorians go to the polls in a state election scheduled for November 28.
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Victorians → go → November
All new data centres built in Victoria will have to source their own renewable energy and will be banned from using drinking water under the state government's new rules for the booming sector.
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centres → build → sector
In the face of community backlash to data centres being built near residential areas across the state, the Victorian government will also introduce a 150-metre buffer between any new data centres and homes.
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government → build → centres
The policy comes amid rising opposition to data centres, including from some Labor MPs and candidates.
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policy → come → MPs
On Wednesday a Senate inquiry into AI and data centres will hold hearings in Melbourne to air community concerns.
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inquiry → hold → concerns
The government is backing the sector, arguing data centres are creating jobs and investment, resulting in $5.8 billion in capital expenditure last year, but says the growth cannot come at the expense of Victorians.
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growth → back → Victorians
"If we get that right, we can all share in their economic benefits, especially the local community,'' Premier Ben Carroll said.
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Carroll → get → benefits
Water use has also sparked concerns that the sector will drink up supplies for cooling.
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sector → spark → cooling
The government says less than 1 per cent of the state's drinking water is being used for data centre cooling, but concedes it should be zero.
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it → say → cooling
The rules will require data centres to use recycled or non-drinking water.
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rules → require → water
Developers will be forced to find offsets if they cannot meet those requirements.
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they → force → requirements
Some rule changes can be made quickly through regulation but other requirements will take longer to come into effect.
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requirements → make → effect
It is also not clear how the state will enforce the requirements.
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state → enforce → requirements
The state government has fast-tracked multiple planning applications for data centres under its controversial Development Facilitation Program, which allows companies to bypass local councils and apply directly to the planning minister.
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companies → track → minister
ASX-listed tech company NextDC had a $1 billion data centre in Port Melbourne approved by the minister in 75 days earlier this year.
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NextDC → list → days
Under the state's proposed new rules data centres will soon have to provide their own renewable energy and storage to cover the increased demand data centres put on energy supplies.
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centres → propose → supplies
This could be through their own renewable programs, or investing in new generation projects.
uncertain
This → invest → projects
The developers will also have to pay for energy infrastructure upgrades.
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developers → have → upgrades
According to advocacy group Data Centre Australia, the country had 162 data centres with a combined IT capacity of 1.5 gigawatts as of March of this year.
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country → accord → year
Melbourne is the fastest-growing market and there are 50 already operating in Victoria, concentrated around the city's west.
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Melbourne → grow → west
By 2030, data centre energy consumption in Victoria is set to quadruple — a major issue as the state transitions away from coal-fired plants to renewable energy.
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state → set → energy
Mr Carroll has put data centre regulation on his agenda, appointing Anthony Carbines to be the state's first minister for artificial intelligence and the digital economy.
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Carroll → put → intelligence
"Data centres power our lives and support banking, healthcare, transport and emergency services'' Mr Carbines said.
"
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Carbines → power → banking
Companies like Amazon and Microsoft choose to invest in Victoria.
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Companies → choose → Victoria
That will continue within sensible guardrails."
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That → continue → guardrails
Prime Minister Anthony Albanese has tried to establish a national approach to data centres but could not reach consensus with all the states on renewable energy requirements.
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Albanese → try → requirements
The state says its plans fit within the Commonwealth framework.
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plans → say → framework
Under Mr Carroll's plan developers will also have to pay towards a local investment fund to help build TAFEs and parks.
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developers → have → TAFEs
The state will also introduce procurement rules requiring data centres to properly train Victorian workers.
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state → introduce → workers
The state government says it is already working on other planning rules for data centres including "fair community consultation".
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it → say → consultation
Earlier this month, electricity distributor Jemena was forced to pause the installation of high-voltage power poles in Melbourne's inner-west following fierce backlash from residents.
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Jemena → force → residents
The 15-metre-high poles were designed to facilitate increased power loads, particularly from NextDC's West Footscray data centre, and were also opposed by Maribyrnong council, which accused Jemena of failing to consult the community.
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which → design → community
The data centre, located metres from homes, has also come under fire for the air pollution emitted by its back-up diesel generators, constant hum, and plans to expand further.
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centre → locate → generators
The Greens have pinpointed data centres as a key election issue, campaigning heavily in Melbourne's inner west, and have called for a moratorium on all new data centres.
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Greens → pinpoint → centres
The Aporia
