Sydney's datacentre boom: housing, water, and power at risk?
Sydney’s relentless pursuit of digital infrastructure is creating a stark trade-off: burgeoning datacentre developments are squeezing out opportunities for much-needed housing and job-rich industries, a recent inquiry in New South Wales revealed. The situation is reaching a critical point, with local councils reporting escalating concerns about everything from blackouts to dwindling water supplies.
The ripple effect on local communities
The Lane Cove Council, for instance, has documented a worrying increase in power fluctuations – both brownouts and blackouts – directly correlated with the expansion of datacentres in Lane Cove West. But the disruption isn’t limited to the power grid. Residents are complaining of “offensive and disruptive” noise pollution, impacting both human well-being and local wildlife. Coupled with the use of diesel generators for backup power, legitimate health concerns are beginning to surface.
The City of Ryde paints a similar picture. A cluster of twelve datacentres in Macquarie Park is actively competing with residential development on prime real estate—specifically, a site near the Macquarie Park metro station that could have provided homes in a well-serviced, strategically located area. It’s a frustrating scenario: valuable land earmarked for dense, transit-oriented housing is instead dedicated to server farms.
Lo que nadie cuenta es la sheer scale of the problem. Jess Miller, the City of Sydney’s deputy lord mayor, estimates that if every proposed datacentre in the NSW planning portal were built, they would collectively demand 4.4 gigawatts of power – enough to fuel ten million households. And the water consumption? A staggering 25% of the city’s drinking water by 2035, equating to 250 million litres per day – a volume equal to the entire production capacity of the Sydney Desalination Plant.
But there’s a deeper issue lurking beneath the surface. Penrith City Council has urged the state government to halt further approvals until the long-term utility servicing impacts—both for water and power—are fully understood. The Western Sydney Regional Organisation of Councils points out that the cumulative impact of noise, heat, and emissions from these datacentre clusters is rarely factored into individual project approvals. At scale, these effects are particularly damaging to heat-vulnerable communities in western Sydney.
Data Centres Australia acknowledges the need for improvement. While they emphasize that compute power generates heat and requires cooling, they are investing in renewable energy and exploring alternatives to drinking water. “Not all water is the same,” they argue, advocating for affordable access to recycled water. However, cost and supply limitations remain significant hurdles.
The industry insists a ‘panic’ is unwarranted, citing a “window of opportunity” to address system weaknesses, such as building more transmission infrastructure and battery storage. However, the Committee for Sydney highlights a critical deficiency: the lack of an overarching spatial strategy for datacentre deployment. The prevailing sentiment from communities and local councils is clear: datacentres are perceived as extractive, taking more than they give in terms of energy, water, and land.
The federal government's recent “national datacentre expectations” signal a shift towards greater accountability. Whether this will translate into meaningful change remains to be seen. As Sydney races towards a digitally-driven future, it faces a crucial choice: prioritize the relentless expansion of datacentres, or invest in a sustainable, balanced approach that ensures housing, infrastructure, and the well-being of its residents aren't sacrificed at the altar of the cloud.