Buffer zones, drinking water bans: Carroll eyes new rules for data centres

Data centres would be banned from residential areas, kept away from homes with buffer zones, and be required to supply their own electricity and use non-drinking water under new rules proposed by the state government.

Premier Ben Carroll will on Tuesday announce new guardrails for the booming data centre market, details of which have been provided to The Age ahead of the announcement, including a new 150-metre buffer zone for residential properties.

Alongside requirements for energy, water and suitable locations, the government will also demand investment in local communities.

“In Victoria, we set the rules – data centres must power themselves, protect homes and pay their way,” Carroll said. “If we get that right, we can all share in their economic benefits, especially the local community.”

The move marks a sharp change of direction from the government. Only six months ago former minister Danny Pearson defended the government’s aggressive pursuit of data centre development, saying the state was in a race and could miss out on billions of dollars in investment.

Since then, some Labor MPs have pushed for a moratorium on data-centre projects amid community campaigns in their electorates during an election year.

Under the government’s new rules, data centres would be required to power themselves by providing their own renewable energy supply and storage to match the new demand to the network they create.

They will need to meet electricity connection costs and network upgrades. This aligns with the principles most state leaders agreed to at a meeting of national cabinet earlier this month .

Victoria would also require that centres use recycled or non-drinking water for cooling, and have to offset any drinking water they do consume if they cannot match this condition immediately.

Currently, data centres use less than 1 per cent of the state’s drinking water, but the state aims to keep this figure close to zero through the policy.

In response to the growing number of local campaigns protesting against centres in neighbourhoods, data centres will not be permitted in residential zones. The government committed to ensuring they won’t be built near schools, childcare or in rural areas that can’t support them.

A 150-metre buffer zone would be required between data centre buildings and any home.Traffic management plans will also be required to minimise traffic disruptions when the facilities are built and operating.

A local investment guarantee will ask that there be community benefits provided by the developers of data centres when they are built.

These are subject to consultation but could include job commitments or local amenities such as TAFEs or parks.