Australian Officials Call Datacentre Backlash a US Import as Projects Advance

Pro-datacentre officials and executives say Australia's buildout is smaller, more regulated and therefore less damaging than the US version, and that the negative reaction is being inflamed by a heated American debate reaching Australia through social media. State governments, eager for economic growth, have broadly welcomed datacentre investment and in some cases overridden local council approval processes because of the size of the projects.

In July, Victoria's then-minister for economic growth, Steve Dimopoulos, said his state was second only to New South Wales in datacentres and was outstripping Australia's most populous state in growth for new centres. He expressed concern that growing resentment toward new developments was a result of US social media influence.

'We're seeing some US states move to ban new large datacentres. And those campaigns and mega-developments in the US shape public opinion in Australia,' he said. 'Because when it's on your phone, you think it's right here, or you think it might just come here.'

The minister declared: 'We are not the United States. Our planning, energy and water systems are much more carefully monitored, managed and regulated.'

Leaders in the datacentre sector have also complained about the backlash, calling it misleading and disingenuous. Belinda Dennett, head of the peak lobby group Data Centres Australia, said in a March speech that 'Australia's datacentre debate is being fought on America's facts.' She said reactions from everyday people range from curiosity to confusion and fear, and that news around the sector was 'alarming.'

'The industry is depicted as energy vampires, water hogs and job killers,' Dennett said. 'The problem is that most of those headlines originate in the United States, where the industry is operating at a completely different scale, under completely different market rules. They are being transplanted wholesale into Australian debates as though the contexts were interchangeable.'

Dennett said the US has 5,400 datacentres with 53.7 gigawatts of total capacity, compared with 252 in Australia with 1.4 gigawatts. Measurements of the number of US datacentres vary. She said that when people read about datacentres straining the grid, driving up bills and consuming vast amounts of water, they are reading about America's challenges 'applied uncritically to an Australian market that bears almost no resemblance to it.'

The Guardian reported that Dennett omitted that Australia, with a population of 28 million, has just under one datacentre per 100,000 people, compared with 1.5 per 100,000 people in the US, whose population is 342.7 million.

The pace of datacentre construction is increasing rapidly in Australia, with several large datacentres of 1 gigawatt or more capacity in the planning stage. Trending videos on TikTok and Instagram have highlighted major local community concerns, including a 2.4 gigawatt centre planned for outer Melbourne and a 2 gigawatt gas-powered centre in the Northern Territory.

Rob Nicholls, professor and senior research associate in digital policy at the University of Sydney, said the Northern Territory project is equivalent to the annual electricity consumption of 2 million households. The Northern Territory's population is just over 265,000.

The Australian government, seeing the US gas boom fueled by datacentres' demand for power, has planned to override states and ban gas being used to power centres. New rules would require datacentre operators to bring as much new renewable energy into the system as the centre would otherwise take.

Some experts find the backlash justified in following the US example. 'The social media input from the US is very vocal and rationally based: It's going to increase the cost of electricity and it's going to increase the cost of water and I don't get a benefit from it. And that's a rational position,' Nicholls said.

Nicholls said the hurdle facing the Australian government is explaining to its constituents how the issues faced in the United States differ from local ones. Legislation for the framework is unlikely to arrive until next year.