Goodman Group withdraws $1.2bn Sydney datacentre over 'emerging' regulations

The “Project Mars” plans were withdrawn from the NSW planning portal on Monday. Goodman posted on its site that the policy and regulatory environment for large-scale datacentres had “evolved significantly”. “Having considered emerging federal and state policy, Goodman has concluded that it will not progress with the development application,” the company said.

In August, the NSW government announced a new “fast-track” framework for datacentre applications that promised to assess applications within 75 days if plans meet set principles. Those principles include applying “world-class” standards for noise and air pollution, imposing no net cost to consumers and communities and funding additional water and energy supply. The move followed federal government rules in July aimed at addressing growing community concerns with datacentre location choices and energy and water use requirements. Legislation is expected to reach the federal parliament early next year.

The Lane Cove proposal had become one of the main sources of criticism of datacentre growth in Australia. It was criticised by local residents because of its proximity to local schools, event spaces and green space, as well as concerns about clustering with a number of datacentres planned or in operation in Lane Cove. Guardian Australia first reported the community concerns in May.

Sasha Titchkosky, a spokesperson for Lane Cove Responsible planning, said she was “absolutely ecstatic” at the withdrawal. “I think we could have all saved everyone a lot of hassle and heartache if we actually had an appropriate regulatory regime and the government at state and federal had jumped on this when we started calling for better regulation,” she said. “There was a real regulatory gap and that’s causing issues all around the country with inappropriate datacentres being put forward that really don’t give communities any benefits.” Titchkosky thanked Goodman Group for listening to community concern and withdrawing the proposal.

A spokesperson for Goodman Group declined to comment further but pointed to the opening statement made by the company’s general manager for development, Ben McGilp, at last week’s hearing of the Senate inquiry into datacentres. McGilp said the company supports “clear, consistent and evidence-based regulation that provides confidence for communities, governments and industry”.

In its submission to the inquiry, the peak body Data Centres Australia warned the committee that the risk for Australia was not over-building datacentres but “under-building”. “Turning the investment away does not reduce global data centre energy or water use, it simply redirects it to jurisdictions with weaker protections than Australia’s, while Australia forgoes the economic value and the sovereign capability,” it said.